The El Niño of the digital ecosystems

After digitizing current processes we started optimizing them. All purely focused on efficiency. Saving costs. Improving margins. Happier customers. Now is the time to start the real digital transformation. A revolution is needed.

Many organizations are working on process optimization. They are looking at eliminating human interaction by means of digitization, integration and robotization. Organizations working LEAN will go a bit further and will continuously try to improve the efficiency of processes. Mostly, this is all based on current revenue streams and business models. Also, it is assumed that the organization has a relevant function and will keep that function in the ecosystem.

What’s happening around us?

Every organization is part of an ecosystem. Ecosystems that become more and more digital. By exchanging information digitally between parties in such an ecosystem, these ecosystems will become more and more efficient. First we used EDI and today, in modern application landscapes we use APIs more and more. APIs that are becoming smarter and smarter and can find eachother more or less automagically. APIs that are a direct interface to an existing application. An application that most of the times is a system of record. Not a very “interesting” application most of the times, only capable of handling basic administrative needs such as handling orders and ship notices.

The middleman in crisis

There are only a few systems of record that really deliver true value add for an organization. The real value add of an organization usually is in the uniqe position in an ecosystem and the processes it delivers by means of a combination of all kinds of software systems, on-premises and in the cloud. But what happens when your combination of services suddenly is not relevant anymore? Because ecosystems have found a way to solve the isssues in another, much better way? Your organization actually doesn’t have a function anymore? Because you are actually the middleman? Crisis!

We are seeing everyday that new ways of working together in ecosystems evolve rapidly. The most important unique selling point of blockchain is to cut out the middleman. This is possible because the system enables collaboration without having trust in place. You don’t have to trust eachother. The trust has been digitized. By means of smart contracts. Look around you. Blockchains that enable peer-to-peer lending, that make wholesale and banks obsolete, that replace marketplaces and trading systems, etc. etc.

Blockchain is a revolution

Blockchain is the El Niño of the digital ecosystems; it changes traditional collaborations between companies and disturbs the balance. We will probably see an Al Gore like person in the near future who will warn us of the dangers. But, just like in nature, it will take a while but a new balance will evolve. After which the landscape will be thoroughly changed. There will be many victims, but sometimes that is needed to make the next step, as a whole.

If your organization will become a victim depends on how much value add you deliver. Oftentimes this depends on the need for physical assets or infrastructure. For example: A supplier of green energy who does not have assets but only handles the trade and contracts can be replaced by a blockchain. The supplier that also owns the wind- and solar farms and the infrastructure for homes and factories will be much more difficult to replace. Until the time that you’ll be able to generate 100% of your own energy need. But if energy surplus needs to go back into the net, you’ll be needing infra again. Uber can easily be replaced by a blockchain. Uber doesn’t have assets. And really no value add. Blockchain is a revolution. In every boardroom this should be on the agenda permanently. Make sure you understand the technology and its impact. Don’t be an American member of congres who doesn’t understand Mark Zuckerberg’s business model and technology. Work out a solution and really start innovating!

Cheers, Gijs

 

The rise of the Ethereum blockchain frameworks

Lately I’ve done quite some research on blockchain. I’ve been involved in a number of inspiration sessions for our customers, trying to come up with good use cases for blockchain in their respective industries. We’re in the process of defining and executing some exciting PoCs (proof of concepts) right now, mainly in the logistics vertical.

The Ethereum blockchain seems to be(come) the dominant platform for all kinds of initiatives. Ethereum is also doing quite well from a token market value point of view at the moment and that’s not hard to understand. It’s the goto platform for anything that has to do with smart contracts. A lot of current ICOs (initial coin offerings) run their technologies on the Ethereum blockchain. Some of them are good and probably have a bright future, some of them are hyped but basically hot air, and some of them are right out shady and probably scams. But hey, a new crypto sucker is born every day as Microsoft’s blockchain principal architect Marley Gray said during a keynote on a blockchain conference.

On the Microsoft Azure platform, it’s quite easy to setup an Ethereum blockchain. With the CoCo framework, Microsoft has built exciting preview stuff that can run on multiple blockchain platforms. Check out the paper here.

For me it’s clear that the blockchain technology itself is not the interesting part. Of course having immutable records and a consensus model to cut out the middle man is *very* important, but the blockchain itself will become mainstream like any other database technology, like SQL or NoSQL. What makes it worthwhile is the concept of smart contracts. And that’s what the Ethereum blockchain is quite good at. It is however quite hard to develop and test smart contracts. I foresee that in the short term, lots of startups will come up with smart things around smart contracts.

I’ve bumped into two of them that are worthwhile mentioning. Also because they are both legitimate and did their ICO’s in North America:

  1. Blockmason. The have developed the Credit Protocol on top of Ethereum, which takes care of a very badly needed smart contract for handling credit (on which this world turns), including the automatic settling of it between parties. They have developed this technology before they did their ICO. And they are SEC compliant, which is a first in crypto land. They have interesting partnerships, like the one with Coral Health who are doing a pilot with their technology on settling payments between doctors, patients and insurance companies. Without the need for a third party. Very interesting technology, for which they have applied for patents. I think lots of initiatives will use their technology to implement similar scenarios. Their token is named BCPT. Checkout Blockmason.io for full details.
  2. Etherparty. They have created the technology to make the development of smart contracts easier. Basically they do for smart contracts what WIX did for websites. Without any programming knowledge you can develop smart contracts that run on any compatible blockchain, but the most used one is obviously Ethereum. I foresee that they will come up with lots of out-of-the-box templates for smart contacts making the implementation of blockchain initiatives a lot quicker. Their token is named FUEL. Checkout Etherparty.com for full details.

So, just like we had frameworks on top of SQL databases and integration software, we’re now seeing the rise of smart frameworks and templates on top of blockchain. We’re definitely coming out of the blockchain stoneage. Exciting times!

Cheers, Gijs