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Two years after the beta was announced, software company VMware has announced the general availability of its enterprise tier blockchain platform, VMware Blockchain, Wednesday.
The company’s platform allows businesses to deploy decentralized applications in a multi-party environment, according to a company announcement. The tool description fits the target use case of blockchain in the enterprise software market, which often implies the need for immutable transactions between multiple stakeholders.
While desktop virtualization has historically been the centerpiece of VMware’s offering, it is “no longer an accurate point of view” to think of the company purely as a niche vendor, said Homan Farahmand, senior research director at Gartner.
Think of the blockchain rollout as another step towards creating an end-to-end digital foundation, Farahmand said.
The challenge facing the vendor is to match the technology, the problems it can help solve, and the CIOs looking for solutions. Amid falling budgets for emerging technologies, potential customers will need to see examples of successful implementations that can help support the cause of blockchain in the business.
“What VMware has to do is show that they can deliver results,” said Bennett.
The seller can name two companies that are working to implement its blockchain platform, with the support of technology partner Digital Asset: Broadridge Financial Solutions and the Australian Securities Exchange (ASX).
“VMware began looking into blockchain a few years ago, in the same way as nearly all vendors, as no one wanted to miss that wave, “said Martha Bennett.” Many vendors gave up again when they realized that this technology is not an instant money maker but a long-term strategic game. VMware no. “
Last year the company introduced Kubernetes to its vSphere platform, a sign of flexibility within its strategy for compete in the cloud market.
“Many organizations are looking for vendors that can offer advanced production-grade blockchain capabilities such as high performance, scalability, privacy, interoperability, and a rich ecosystem of developers and tools to future-proof their investment,” said Farahmand. .
The blockchain opportunity
How big is the market opportunity in the blockchain? Global IT budgets took a hit this year in light of COVID-19, and so did global blockchain spending: reaching $ 4.3 billion, or a 7.7% contraction from IDC’s previous forecast.
But by 2023, global blockchain budgets are projected to reach $ 14.4 billion, signaling further opportunities along the way.
As VMware enters the competition alongside existing enterprise blockchain vendors, including IBM and Oracle, it will need to demonstrate to the market that there is added value in selecting its technology.
One way it can get there is to provide concrete examples of what problems its blockchain platform can solve and the business and operational benefits it presents.
The continuous presence of established players and the entry of new competitors signals a certain stage of progress. IBM, for example, saw how the distribution of blockchain services it can catalyze the use of other cloud services within its existing offering.
Given the maturity of blockchain, business leaders no longer need to resort to proof of concept to confirm whether the technology works, said Martha Bennett, VP, principal analyst at Forrester.
“We know it will,” Bennet said. The question then becomes whether or not blockchain is an appropriate solution for any specific use case or industry.
Failure to align the business problem at hand, the capabilities of a specific technology such as blockchain, and the resources a platform would require can lead to sunk costs and lack of expectations in business adoption.
The capabilities of the blockchain are designed to enable a “frictionless programmable economy,” according to Farahmand. There are points of friction in many resources found in multi-party processes, such as:
- Financial transactions
- Insurance claims
- Securities trading
- Capital market
- Financial market
- Supply chain management, logistics and transport
- Health care
- Public services and registers.
“If the organization is struggling with friction in the current value chain, blockchain could play a role as a stepping stone towards disintermediation and decentralization,” Farahmand said.
In the case of ASX, it turned to the new VMware platform to support growing transaction volumes. The technology “can help financial services companies transform data, preserve privacy and confidentiality, and remove manual processes,” said Dan Chesterman, CIO of ASX, in the announcement.
Solving this problem can also unlock new types of tokenized customers and assets that can create new markets, economies and streams of value.
“One of the big attractions of a blockchain network is the transparency it provides and the data sharing capabilities,” said Bennett. “This has its drawback as not everyone should see everything for all sorts of reasons.
Similar to their appetite for technology platforms in artificial intelligence, when implementing blockchain platforms, CIOs will look for platforms that can deliver clear business results, which is in part the result of a post-COVID resource prioritization.
According to Bennett, projects in enterprise blockchain that have not yet taken off are impacted by the lack of certainty as to whether or not the technology can adapt to what the business needs.
“This is where, from a business perspective, the value lies in VMware: whether that software truly lives up to its promises,” said Bennett. “What we need to see now is the deployment.”
