Blockchain Trends 2020

hi my name is Chris Segura and welcome to another episode of Block Talk today I’m joined by my colleague Mike Walker Mike
I want to introduce yourself thank you for having me so my name is Mike Walker
I’m in the Applied Innovation group and what we do is we do some interesting
things with our customers where we help our more on the business side help them
understand how to use all these great emerging technologies and as you can
imagine blockchain is the most hyped technology on the planet so that comes
up in discussion quite a bit yeah right so really I help organizations soul
search really where they want to go with these technologies and move past the
hype and focus on real business outcomes with these technologies awesome so in
your discussions I imagine there’s kind of sort of common patterns that come up
over and over right can you sort of help us sort of what are the patterns you see
for maybe in the past maybe in the future what’s common for you guys
absolutely and so since this technology is so hyped there’s a lot of
misconceptions and so some of the major trends and I keep it simple for our
discussion today but there’s really three core trends that that I see in the
marketplace first and foremost is there is a general fatigue around these
technologies and cxos whether it be a CIO fatigue in terms of too many
acronyms too much hype not enough delivery delivery it’s more the latter
right so it’s yeah there’s with our world there’s always going to be you
know acronym suit however really it’s about we see all this POC activity chart
and now we have a lot of delivery of real solutions and so you know really
you know how I like to look at this is practical blockchain implementations and
that’s really kind of the core first trend is companies are quickly shifting
– okay yeah I gotta get that in MVP out but with that MVP is that MVP leading to
something that’s going to of a legitimate business problem and not
just solve the problem yes this technology is legitimate yes we’re past
that point now and you know if we believe our analyst friends you know
Weatherby Forrester or Gardner you know we’re moving in you know past
hype cycles and all that great stuff so now it’s about producing real results
and so that’s the first key trend that I see is you know moving past the POC and
getting practical awesome mmm second it’s realizing that when we start to
talk about these technologies practically now we start to talk in
terms of solutions and realizing that with blockchain solutions blockchain is
actually a small percentage of the overall solution it’s a critical
component of the solution however it may only be 10 or 20% of the overall
solution I think in this show we’ve always said blockchain is really a
technology it’s not a solution right it’s a component of a solution but it by
itself a ledger doesn’t do anything you have to connect it to other things to
gain value to gain insights and so what we see is kind of a second major trend
is really convergence so it’s convergence of three emerging
technologies to build compelling solutions and those three are blockchain
providing a foundational data service capability that allows us to move past
traditional databases that were built for companies they weren’t built for
ecosystems they were built for peer-to-peer data sharing right
they weren’t also built for mastering data at least very well without having a
whole separate stack and solution and so blockchain is a really great way of
doing that but also in today’s world we see a lot in the news our governments
and regulations around things like data sovereignty and data privacy and those
are key capabilities baked into blockchain that we should talk more
about when we’re talking with our business partners so it’s blockchain
providing those capabilities but also what our company is trying to do today
they’re trying to digitize they’re trying to move from the analog to the
digital and so IOT starts to come into picture as the bridge into those worlds
linking into blotching to master that data provide audit ability and
traceability etc and then third leg of that stool is
putting intelligence around all of that and understanding that we live in a
world where you know this year Gartner says there’s going to be twenty billion
IOT sensors out in a while well all these sensors are talking to each other
it doesn’t matter who it’s made from when it’s talking to it everything’s
talking to everything else and there needs to be intelligence wrapped around
that so we see is a second key trend is really the convergence convergence of
those three technologies because there is a lot of serendipity between all
those technologies and working well against so how do you see like for
example so I have IOT data jet or I am IOT devices generating data about their
environment around them you have AI and ML sort of gaining intelligence
delivering knowledge from that data where does blockchain sort of wrap these
two together or is it on top is it around how do these two work together so
the cool thing here is one of the key challenges with AI will talk about AI
for a second will move in to IOT with AI it’s one of these things garbage in
garbage out yep right and so if I don’t have good trustworthy data I’m not gonna
have really good intelligence right or I’ll have misleading and biased Intel
science yeah and so where blockchain comes in is it can master that IOT data
it can master other sources data that’s hand entered scanned whatever it may be
and so that’s one of the key benefits that blockchain is going to bring back
to AI for I of T it’s about the tracking and Trust right so if I’m in a scenario
where I’m in a highly regulated world let’s say I’m I want to prevent an e
coli outbreak right yes I’ve got IT sensors on the lettuce
is it the right IOT sensor did someone do something fraudulent was a remand in
the middle attack you know can I have a digital signature that essentially can
attest that yes authoritative lis this was the device you know that had sent
this particular data to that blocking and it’s immutable etc yeah and we bring
all that together and we see real real world solutions where we’ve got a a
factory floor and we’ve got issues where people are
retiring and so you’ve got new folks coming in that don’t have the
institutional knowledge of the past 30 40 years but also we’re shifting from
paper to digital well we’ve got that convergence of all these different
factors and where these three technologies are going to be able to
help me in a very tangible way is I’ve got IOT that’s able to say of these
devices and how I should interact I’ve got maybe a augmented reality or virtual
reality or mixed reality that’s intersecting with those IOT sensors now
that’s able to provide that mixed reality scenario with blockchain to say
yes this is true authoritative data all right and then
I’ve got AI ml that’s automating the repetitive tasks for me where I am a
Sarah to do this so you can kind of see in these scenarios where it’s very very
complimentary yeah yeah absolutely we do talk about that quite often and our
presentations when we meet with customers where a trade shows in fact we
do the supply chain scenario quite often because it is a good sort of convergence
of all three technologies the IOT data taking information about ice cream
taking information about lettuce ai gaining intelligence from that in the
blockchain data sort of providing that trust but verify layer right you gave me
this data great we can always come back regardless of how long it’s been and
come back and say this was the data we had we satisfied conditions of our smart
contract we satisfied other data we move on this is how we do business together
and in my mind it’s really the codification of our business process
that blockchain is really sort of helping sort of put these two
technologies together I think it’s great and here’s another thing that oftentimes
we don’t think about is data quality how much time do we spend with integration
and cleaning of our data in a reactive night watching gets in front of all that
essentially what we’re doing is we have that smart contract as soon as you put
data into that blockchain is validate it’s it’s purified so are those back-end
reconciliation processes that we have whether it be and our finance
organizations or in other areas in our organization those start to go on the
endangered species list right just naturally by using these technologies
together all right cool now third key trend and we’ve alluded to it
with the other two is all around digital ecosystems sometimes it’s referred to as
blockchain consortiums that’s a tricky word you know when when I talk with you
know cxos and we mentioned the word blockchain consortiums there’s some
things that come up in their mind that consortium has prior art in the legal
industry it means certain things and we don’t necessarily mean that war no no we
don’t at all so we have to be very careful but also I think it does this a
disservice to blockchain and what we’re trying to accomplish so that’s why I’ve
been using the word Moore ecosystem and you’ll see you know Gartner calls them
business ecosystems I call them digital ecosystems because
that’s really what we’re doing is we haven’t we already have ecosystems today
but largely they’re analog and they’re prone with all sorts of manual processes
and really what we’re trying to do is we’re trying times internally when we
refer to ecosystem we mean actually something different often we use that to
repair as partners when you’re using ecosystem you kind of mean a little bit
of everything right partners customers people that are doing some sort of
business together yeah in various ways we’re transacting together you’re an
outcome that’s a good yep and it could be a partner it could be a device mmhmm
right it could be lots of different things and knowing that we are in a
world which is you know I’ll go to kind of the Business School definition we see
multi-sided businesses where the days of a buyer-seller relationship those days
are gone is much more complicated there it’s buyer-seller data aggregator that
gets sold to an end user that end user then is able to monetize that you can
kind of see how the spider webs out and so the traditional binary relationships
start to go away and that’s why it’s so important to kind of call what it is
which is we live in these ecosystems and we build a business model around these
ecosystems and so with this third trend around digital ecosystems the the actual
trend is understanding that one there our digital ecosystems – not all digital
ecosystems are the same and we should create these ecosystems that are fit for
purpose and so you’ve got three major types you’ve got a founder led model
which is really all about saying I’ve got one company that’s going to create a
permission blockchain and they’re gonna control it and it and it may be from a
competitive perspective they want to do that or it might be a regulatory
perspective give you a great example I was in Tel Aviv about nine months ago
and I’m sitting down with the CTO for the city and we’re talking about their
blotching implementation for the lights and you know street lights it’s really
you know the electricity and all that great stuff and I said so you know so
it’s permissioned it’s private etc etc you know so tell me you know will it
always be that way of course why would we we’re saving a bunch of money this
just makes sense we don’t need these other requirements so we’re not going to
do that yeah okay let’s find for some scenarios and maybe it’s a part of your
journey as well maybe it’s the first evolutionary step to improve an idea but
also we see other models like a partnership driven model where you’ve
got two major organizations that join a essentially a joint venture and do it
together the governance and the architecture looks different there and
then you’ve got kind of true quote-unquote consortiums that are more
industry driven in the industry driven ones we actually see the smallest
percentage believe it or not in this blockchain world in that category in the
reason why is it so hard I was just gonna ask that yep and it’s hard enough
to get your business executives your lawyers your risk management people your
information security people all to agree now imagine timesing that by ten or if
this is a point in time limitation meaning the industry is just young its
growing this will solve over time is it a technology problem would I think it’s
all the above and I think it’s one a lot of its hey we’re just not ready and with
lots of big organizations they want to mitigate as much risk possible and so
they’re like if someone’s willing to try this
and incubate this for a little while we’re gonna let them do that and then
we’ll kind of get involved number one so that could be a scenario to technology
wise it’s tricky watching is still evolving as a technology and we still
have issues around across cloud across ledger
oh yeah compatibility we talked earlier about tokens and the compatibility there
so we’ve got lots of technical challenges they’re overcome a bowl but
they’re hard and it requires a lot of deliberate architectural work to address
those but I think third and most importantly is the commercial model
around these yeah and so oftentimes what these blockchain ecosystems require is a
level of co-op cooperation from their competitors and as you know until
capitalism dies it’s really hard to tell your shareholders never a legitimate way
right it’s very hard to say hey we’re going to erode our margins because we
want to play well with our competitors that doesn’t fly often times so we got
to be very realistic and very practical here that we are you know try to
monetize these services there will be things we’re working together outweighs
some of these factors but you know we are very much living in a world where
companies are competing and so we have to be aware of that and so with these
digital ecosystems what you’ll find is it’s not as clear-cut as kind of one
blotching to rule them all we actually see layers or a chain of chain type of
architecture where you might have for a business process let’s say an insurance
you’ve got the risk stream Alliance which takes a small subset of claims
data from all the insurance company and puts it on a blockchain well the special
sauce so that’s only like five to ten data fields as an example the hundred
data fields of all the transactional history and all that is actually kept by
the insurance companies and they’ve got their own blockchain implementations and
they’re linked together for making sure that we’re all using the right data
however they’re doing interesting things behind the scenes in their organization
so it’s not as simple as hey we’ve got one style but there will be multiple
styles that will be linked together across these ecosystem and I
think a great sort of highlight to the point you’re making there is when you’re
talking about sort of the digitization of your business the digitization of
your business process you look at something like the supply chain which
might start out very simple I sell parts to you you build them into something
bigger better more interesting that process though in reality we do business
together maybe we cooperate maybe we compete together who knows but then
eventually that same thing that gets you built to get shipped to somebody else
and there may be insurance on that because it may be a high-value asset so
now you have another business process that comes in another partner another
sort of contortion member if you alright so yeah I think these are sort of really
super interesting discussions around how does business how does technology how
does the industry grow and it’s great insight to see where we’re at now in
2020 it’s still pretty young right we’re still at the beginning of this journey
and I would say this isn’t exclusive to blockchain this is the whole notion of
digitizing my enterprise we’re still very young on that transformation
journey shala and so we’ve got the business models and
how to think about this evolving we got the technology evolving we’ve got a
workforce where we’ve got an influx of new talent coming into the workforce
we’ve got an aging population that’s working longer so there’s all these
factors that are making a really really interesting time to be working through
these these particular issues and into your supply chain comment you know I’m
working right now with there’s a case study about this on Microsoft comm with
GE aviation yeah and I’ve been working very closely with their executives and I
was actually very very surprised to find out for just their kind of core Aviation
supply chain there’s 21,000 independent data points yeah this is complex yes
that’s a fascinating application too if you haven’t highly recommend you look up
that case study because it is fascinating application great example of
both the benefits of this technology and some of the reasons people are looking
at it to solve problems that they haven’t been able to solve prior Mike
thank you for joining us it’s been a fantastic
discussion yeah absolutely anytime yeah great thanks for joining us today
again for more discussions around business side more discussions on the
technology side continue to watch us on channel 9 at the blog talk show or
follow us on Twitter at MSFT blockchain thanks a lot you

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