IBM Blockchain Platform: Spanning development, operations, governance

RESEARCH REPORT // FREE
 
IBM Blockchain Platform is a cloud-based permissioned blockchain platform. It’s based on the Hyperledger Fabric framework and includes the Hyperledger Composer Online Playground for application development; and is integrated with IBM’s own operational management tools, utilities, and support.

Top takeaways

A playground for developers, a production environment for business

Although the IBM Blockchain Platform sports integrations with IBM Business Process Manager, IBM Operational Decision Manager, and IBM Watson IoT Platform, the company doesn’t yet provide any ready-made connectors to other common components. However, it does have plans to integrate with solution accelerators, and developers are well-supported with APIs and the inclusion of the Hyperledger Composer Online Playground sandbox in the IBM Blockchain Platform developer environment for smart-contract powered application development. It’s this focus on the application tooling, supported with its network of IBM Cloud Garages for Blockchain and their methodology of design thinking and extreme programming, that underscore the company’s commitment to providing the centre of gravity for Hyperledger blockchain application development.

A blockchain solution to a business process problem

IBM sees blockchain technology as a solution to business process problems associated with decentralised business-to-business work co-ordination. It’s provided integrations with IBM Business Process Manager and IBM Operational Decision Manager, but acknowledges that blockchain implementations potentially bring with them a lot of business change and skills headaches. To that end, as well as technology considerations, the company is focusing on governance and process change at the touchpoints of BPM and blockchain, and committing a range of resources (including software, training and professional partnership) to more than 1,000 universities in the IBM Academic initiative to further the blockchain developer skills agenda.

Client interest is maturing and diversifying

IBM still classifies most of its blockchain customer engagements as being ‘founder-led’ (i.e. where an organisation seeks to enhance its own business through the development of a blockchain solution for an existing business network, of which it’s a dominant party). However, as the market matures, IBM reports that interest is slowly moving towards scenarios where less asymmetric consortia are proposing joint projects; and instances where customers are ending up developing solution platforms in niche areas, where they’d initially planned to launch products. This suggests a shifting focus away from attempts to ‘impose’ a blockchain solution on an ecosystem, to one driven more by shared vision and shared value. Here, IBM Blockchain Platform’s ability to help customers quickly and easily form a network of diverse organisations into a decentralised consortium to tackle their B2B process problems comes to the fore.

Introducing IBM’s blockchain offering

IBM’s blockchain focus is on permissioned blockchain networks, leveraging the trust and relationships inherent in existing business networks (see the MWD Advisors report Blockchain for business: What is it and why should I care? for more information on the different types of blockchain).

The company is a founding premier member of the Linux Foundation’s Hyperledger Project (see Hyperledger: Permissioned blockchains for every industry for background), and has invested heavily in contributing to the open source Hyperledger Fabric blockchain framework and Hyperledger Composer – both of which provide the main components for its own commercial cloud-based offering.

Originally launched in October 2016 as IBM Blockchain on Bluemix High Security Business Network, IBM relaunched its Hyperledger-based blockchain offering in August 2017as the IBM Blockchain Platform. It’s fully integrated with the company’s cloud-based development and production environments, marrying open source frameworks and tools with IBM’s own management tools, utilities, and support (and leveraging a modular cloud-based architecture for security, performance, and resilience). The package has been designed to make it easier for the members of a consortium to create, govern, manage and operate a permissioned blockchain network.

Prior to the launch of its production blockchain platform IBM had engaged with over 400 companies worldwide, across a range of industries, to develop blockchain proofs-of-concept and applications in areas as diverse as secure global payments, trading and settlement, insurance, food safety, supply chain logistics, procurement, digital rights management, utility grid balancing, and student learning.

IBM classifies its blockchain customer engagements as commonly supporting three types of business networks:

  • Founder-led – where an organisation seeks to enhance its own business through the development of a blockchain solution for an existing business network, and it provides encouragement for other parties to join.
  • Consortium – where the main parties a business network come together to recognise the collective value of a blockchain solution.
  • Solutions – where an organisation develops a blockchain platform and then seeks to build a business around it (essentially founder-led, but without a business network already in place).

Although the company sees most engagements as being founder-led, as the market matures IBM is reporting interest slowly moving to scenarios where less asymmetric consortium groups are proposing a project where there’s a minimum viable blockchain ecosystem; it’s also citing instances where customers are moving towards developing solution platforms in niche areas, where they’d initially planned to launch a product – both trajectories suggesting a move away from blockchain networks imposed by a dominant player in a marketplace, to initiatives that focus more on shared value.

In terms of use case maturity, IBM currently talks mainly about blockchain “coexistence” with existing systems – i.e. taking an existing system and wrapping blockchain around it; sometimes running a blockchain process element as an adjunct to core processes that continue to execute using non-blockchain technologies. To date, it’s not reporting having seen much true integration between blockchain implementations and existing business systems – though the Blockchain Platform offer is designed to make it much easier to deploy containerised blockchain applications in the enterprise (on the IBM Cloud), and integrate via exposed REST APIs.

IBM’s client engagement model is business-centric: it brings together blockchain expertise with comprehensive service teams under the IBM Cloud Garage for Blockchain methodology, taking initiatives from ideation to production.

Technical capabilities

IBM’s model for a distributed business network, enacted on a permissioned blockchain, consists of a blockchain network, comprised of multiple members, where:

  • Each member provisions peers and resources inside their IBM Cloud environment.
  • A consensus cluster sits at the network level, administered by network members in an admin group.
  • Any changes to the network occur according to the network’s pre-defined governance policies.

The point IBM makes about these last two features is that blockchain administration is undertaken ‘democratically’ by multiple (eligible) members of the network – i.e. that role doesn’t fall on a single organisation. Consequently, the ongoing smooth running of the blockchain network in terms of its infrastructural implementation (not just the smart contracts that govern the blockchain transactions) isn’t tied to the involvement of a single party. This means that the network’s useful operational life can be unaffected by fluctuations in network membership.

IBM’s offer focuses around three aspects of building and joining blockchain networks:

  • Development. Accelerating blockchain development leveraging Hyperledger technologies with open source tools and languages, providing a cloud-based sandbox environment (before deploying in the IBM Cloud) “to turn any programmer into a blockchain developer”.
  • Operations. Deploying enterprise services with production-scale performance, security, and disaster-recovery built in (with dashboards for monitoring and managing network resources, lifecycle management tooling that supports seamless upgrades of the full code stack without pausing the network, encryption, malware- and tamper-resistant keys, and 24/7 technical support); with the ability to scale elastically as network membership, channels, and transaction volumes increase, and new smart contracts evolve.
  • Governance. Providing ‘democratic workflow and management tools’ to support multi-party management within a blockchain consortium, collectively managing the rules and policies for a network (preventing any one member from having exclusive control), and accelerating the initiation and activation of new networks.

As well as including the Hyperledger Composer sandbox environment for application development on smart contracts (‘chaincode’, in Hyperledger Fabric parlance), the Enterprise Plan of IBM Blockchain Platform (currently the only plan generally available) comprises key Hyperledger Fabric components (including a Certificate Authority, a crash-fault tolerant Kafka ordering service, and network peers). Around its Hyperledger Fabric and Composer layer, the IBM Blockchain Platform also provides a high-availability infrastructure with secure data storage and communications. Although these resources are shared amongst Fabric’s blockchain networks, each node is isolated and executes in a secure Docker container that protects its execution environment.

IBM’s rationale for including Hyperledger Composer in its Blockchain platform derives from the fact that it sees smart contracts as being about automating transaction processing logic – and that this should be encoded as business rules (not low-level code) that should be understandable, controlled, and managed by business stakeholders rather than technical developers. The value here is in promoting alignment between autonomous smart contract operation on a blockchain network, and the business rules that drive the rest of the organisation’s operating model (and its relationships with other members of the network).

The membership fee for the Enterprise Plan is currently $1,000 / month, with a per-peer fee of $1,000; high availability is provided by purchasing an additional peer that provides those capabilities.

Customers can integrate IBM Blockchain Platform with IBM Watson IoT Platform, allowing instrumented and connected devices to participate in blockchain transactions as defined by smart contracts (and, where the information is available, to be accessed by members of the business network).

Integration with IBM Business Process Manager and IBM Operational Decision Manager also provides interoperation with internal process management for end-to-end process automation (including those processes that are fully private, private processes with external participants, and fully inter-organisational processes). For instance, IBM Business Process Manager enables customers to automate private control processes, triggering blockchain transactions from private processes, and triggering private processes from events on a blockchain (for example, handling exceptions). IBM Operational Decision Manager automates these private control processes and also shared network processes; and IBM Blockchain Platform provides the automation of shared network processes. IBM is focusing integration effort here in its engagements as they move beyond proofs-of-concept – to help customers cover security, governance, and exception-handling at the boundaries between blockchain (i.e. cross-organisational) and internal BPM processes.

Future plans

IBM plans to expand its Blockchain Platform offering with three further membership tiers:

  • Starter. This provides basic service levels, and is billed hourly; beta available in Q1 2018.
  • Enterprise plus. A monthly subscription that provides IBM’s highest performance and isolation capabilities (aimed at deployments in regulated industries, and other demanding use cases); limited availability today, General Availability in 1H 2018.
  • Remote Peer. Allows customers to install peers, in a location of their own choosing, that integrate with the IBM Blockchain Platform.

Suitability

IBM sees blockchain as a solution to a business process problem, but acknowledges that its implementation potentially brings a lot of business model change (compared with more ‘traditional’ technology change projects). In order for customers to achieve meaningful ROI and build the case for blockchain implementation (both within their own organisations, and across the members of their business networks), IBM’s engagement experience has led it to recommend they start with a process around which there’s already an existing change agenda in place (which blockchain can accelerate), then test for blockchain affinity, and if successful then capitalise by assembling and embedding blockchain skills for future projects. In support of the blockchain skills agenda, IBM has committed to making a range of resources (including software, training and professional partnership) available to more than 1,000 universities through an IBM Academic initiative.

IBM is currently seeing the most interest in blockchain technology from insurance, construction (such as in recording agreements, sourcing of materials, etc.), government, healthcare, retail and manufacturing (ethical sourcing, asset provenance) sectors. It’s also working with financial services companies, but notes that – beyond the world of cryptocurrency start-ups – the regulatory environment there is attenuating fintech innovation. Nevertheless there is interest in blockchain projects that reduce uncertainty and risk; and which eliminate inefficiencies, streamline business processes, and create new business models.

The company is seeing three distinct patterns of interest in, and adoption of, its Blockchain Platform emerge. Some interest revolves around end-to-end cross-organisational processes that comprise both private and public / shared components, which can be supported through deployments integrating IBM Business Process Manager and IBM Blockchain Platform (utilising channels for privacy). Other use cases require smart contract /chaincode automation (for which the IBM Blockchain Platform’s integration with IBM Operational Decision Manager comes to the fore, with the use of a Domain Specific Language to improve business-owner understanding and governance of smart contracts).

A third group is concerned with the changes to overall business processes enterprise-wide brought about by the deployment of a blockchain solution (i.e. how it changes the way a business works). These cross-organisational considerations are addressed principally by IBM Blockchain Platform’s ‘democratising’ tools for business network management.

Currently the IBM Blockchain Platform offer is formulated more for customers with developer muscle to build their own blockchain-powered applications in the IBM Cloud (and integrate them into the existing IT estate). Apart from the integrations cited with its own Business Process Manager, Operational Decision Manager, and the Watson IoT Platform, IBM has not yet produced any ready-made connectors to other common backend components. However there are plans to offer integrations to solution accelerators, and the company has recently expanded its ecosystem team –  so expect third party products using the platform’s APIs to become available in 2018.

IBM, like other Hyperledger members, has architected a blockchain platform based on Hyperledger Fabric and incorporating its enterprise-grade cloud infrastructure and services to ‘harden’ the offering for production-ready applications. It’s also provided integrations with key IBM business automation platform to close the inter-organisational and internal process gap in an end-to-end B2B workflow context – which is good news for customers with IBM investments powering their more existing business process operations.

What sets IBM Blockchain Platform apart, though, is the inclusion of Hyperledger Composer Online Playground. This is designed to provide a sandbox environment to make it easier to develop new blockchain applications, with abstractions of business logic implemented as smart contracts. It’s this focus on the application tooling (supported by its network of IBM Cloud Garages for Blockchain and their methodology of design thinking and extreme programming) that underscore the company’s commitment to establish and cement its position as providing the centre of gravity for Hyperledger blockchain application development.

Download PDF version
RESEARCH REPORT // FREE

Leave a Reply

Your email address will not be published. Required fields are marked *