It was around a decade ago that, with the emergence of Bitcoin, the term “blockchain” first entered the public conversation. Since then, Cryptocurrencies have generally acted as the foundation for various novel use cases of blockchain tech. Concepts such as Web3 and Decentralized Finance (DeFi) have become the talk of the town, each with a similar premise—moving control away from Big Tech and the big banks. Despite this, enterprises too are starting to leverage the blockchain across their own processes as the technology starts opening up new use cases for business.
Enterprise blockchains are unlocking new ways for companies to collaborate. They help to eliminate silos from disconnected supply chains and securely handle sensitive data. Blockchain and smart contracts also support companies in managing and monetizing their tangible and intangible assets. With 77 of the top 100 public companies globally using blockchain technology in some form in 2022, many enterprises are seeing the value in this and coming together via consortiums to fast-track adoption. However, this technology is not without its risks, which include the lack of regulation and interoperability standards. Also, to most people, blockchain and crypto are interchangeable terms, even though crypto is just one such application of blockchain technology. Furthermore, a series of recent market dips and high-profile scandals have not exactly helped enterprise confidence in the tech.
Enterprise blockchain solutions appear to play a role across many industries. According to a 2021 International Data Corporation (IDC) report, financial services lead the pack in terms of investment in blockchain, accounting for nearly 30% of the worldwide total. The industry is also forecast to remain the largest contributor until 2024.
The next most significant contributor to blockchain spending was manufacturing, which accounted for over 20% during the same period.
While these industries are at the forefront of blockchain adoption, several notable use cases in other sectors have also helped enterprises realize significant benefits. We have identified such use cases below:
In an enterprise context, blockchains are most useful when there is a need to share data and transactions between multiple parties that may not fully trust each other and also, when there is a benefit from having a single source of truth that is immutable and transparent.
The enterprise blockchain space is segmented according to its most notable applications, including supply chain management, IP management, hosting content, and database management. To facilitate the adoption of blockchain technology, providers in the blockchain-as-a-service segment offer turnkey solutions to enterprises, enabling them to initiate their blockchain-based applications without the need to develop their own blockchain infrastructure.
Incumbent activity primarily focuses on the blockchain-as-a-service segments. Nevertheless, notable technology giants like Amazon, IBM, and Oracle have developed comprehensive blockchain offerings that cater to diverse use cases, with a particularly strong presence in areas such as supply chain management and security and identity management.
Cloud services giants like Amazon and Oracle, along with other well-established IT and consulting firms, are playing a significant role as active incumbents in the enterprise blockchain space. Their engagement primarily focuses on the blockchain-as-a-service segment, where a majority of these incumbents have in-house initiatives and are entering partnerships with various companies to collaboratively develop solutions based on their own blockchain offerings. IBM is a notable player in the supply chain management space, with its internally developed blockchain-based solutions being used by companies such as The Home Depot and Renault.
M&A activity is relatively quiet in this industry, with Mastercard’s acquisition of Cypherlance (a blockchain intelligence firm for banks and regulators) in September 2021 and Avast’s twin acquisition of decentralized identity startups within four months being the standouts.