Microsoft Enterprise Smart Contracts and Some Thoughts About the State of Blockchain in the Enterprise
The enterprise blockchain market has long been awaiting a strong entrance of the cloud incumbents. With the sole exception of IBM’s Service Fabric, most of the blockchain solutions provided by enterprise software incumbents have seen relatively limited adoption. Now Microsoft is taking another step towards an enterprise blockchain offering.
Enterprise Smart Contracts is Microsoft’s latest addition to its blockchain enterprise offering. This release follows joins the open source Project Bletchley which was Microsoft’s official entrance in the enterprise blockchain market. Enterprise Smart contracts try to bridge the gap between blockchain applications and off-chain communications with Azure services. Specifically, Enterprise Smart Contracts enable blockchain applications to seamlessly integrate with Azure services such as Active Directory for access control capabilities or Key Vault for encryption key management. Microsoft’s new release can be considered a generalization of Ethereum’s Oracle concept applied to the Azure platform.
Microsoft Enterprise Smart Contracts is a welcomed addition to the enterprise blockckchain ecosytstem. Even though the enterprise blockchain market continues to drive a lot of attention from venture capitalists, it is safe to say that this initial iteration has brought plenty of surprises that have defied most of the expert predictions about the space. Let’s review a few ideas that might provide a picture of the current state of the enterprise blockchain market:
1 — Infrastructure Beats Platforms: So far, the vast majority of the investment in enterprise blockchain solutions has been based on “lower-level” infrastructure technologies such as Etehreum while “high-level” blockchain stacks have seen limited (although promising) traction.
2 — Verticals Beat Horizontals: Industry-specific solutions have been the main vehicle to get enterprises to embrace blockchain. Vertical blockchain solutions currently outperform horizontal stacks in terms of market traction and customer adoption.
3 — A Better/Bigger Professional Services Ecosystem is Needed: Enterprise blockchain applications are notorious for requiring consulting and implementation services. However, the ecosystem and talent availability of blockchain application development firms remains incredibly small compared to the number of technologies in the market and its customer demand. We need more companies like Consensys that are pushing the boundaries of innovation delivering blockchain solutions for enterprise customers.
4 — IBM Continues to Dominate: IBM’s offerings around its Hyperledger stack as well as its professional services organizations have allowed big blue to capture a leading position in the first wave of enterprise blockchain solutions.
5 — Big Financial Services Companies are Building their Own Blockchain Stacks: Nasdaq’s Linq and J.P Morgan Quorum are notorious examples of proprietary blockchain platforms released by major financial services firms. Both Quorum and Linq include serious contribution to blockchain enterprise architectures that should be adopted by more mainstream platforms such as Ethereum.
6 — BaaS Hasn’t Taken Off: The blockchain as a service(BaaS) model promoted by PaaS incumbents such as Microsoft, IBM or Amazon hasn’t gain major traction within the enterprise community. This is likely to change as more solutions such as Microsoft’s Enterprise Smart Contracts enter the market.
7 — ICOs Haven’t Reached the Enterprise Blockchain Yet: The Initial Coin Offering(ICO) phenomenon that has been driving a lot of momentum(upwards and downwards ;) ) in the digital currency market has had very limited impact in the enterprise blockchain ecosystem. Most of the relevant ICOs have been focused on consumer blockchain technologies.
8 — Governance is Important: Speaking of ICOs, Tezos recent monster ICO clearly signals that the enterprise blockchain market cares about regulation and governance. Will see how the technology performs.