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Monday, July 15, 2019

The Blockchain Platform Market will Reach $3.1 Trillion

In theory, a blockchain is an open, distributed ledger technology that can record transactions between two parties efficiently, in a verifiable and permanent way. That said, there is still some confusion in the marketplace for blockchain-related products and services that apply this emerging technology.

By 2021, 90 percent of current enterprise blockchain platform implementations will require replacement within 18 months to remain competitive, secure and avoid obsolescence, according to the latest worldwide market study by Gartner.

Blockchain Application Market Development

"Blockchain platforms are emerging platforms and, at this point, nearly indistinguishable in some cases from core blockchain technology," said Adrian Lee, senior research director at Gartner.

According to the Gartner assessment, many CIOs overestimate the capabilities and short-term benefits of blockchain as a technology to help them achieve their business goals, thus creating unrealistic expectations when assessing offerings from blockchain platform vendors and service providers.

Today, the blockchain platform market is composed of fragmented offerings that often overlap or are being used in a complementary fashion, making technology choices confusing for IT and/or business decision makers.

Compounding this challenge is the fact that blockchain platform vendors typically use marketing messaging that does not link to a target buyer’s use cases and business benefits. For example, ‘transactions’ was the term mentioned the most in relation to blockchain, followed by ‘secure’ and ‘security.’

"While these may be functions of blockchain-enabling technology, buyers are still confused as to how these functions are achieved or what benefits blockchain adds compared to their existing processes," said Mr. Lee.

Nonetheless, as enterprise interest in blockchain technology increases, the number of blockchain platform vendors continues to increase with more new market entrants. So, are there already too many eager vendors chasing too few adequately informed customers? What's holding back progress?

"Due to the lack of an industry consensus on product concept, feature set, core application requirements and target market, we do not expect there to be a single dominant blockchain platform within the next five years. Instead, we expect a multiplatform world to emerge," said Mr. Lee.

Outlook for Blockchain Platform Growth

By 2025, the business value added by blockchain applications will grow to slightly more than $176 billion, then surge to exceed $3.1 trillion by 2030, according to a recent forecast by Gartner.

"Product managers should prepare for rapid evolution, early obsolescence, a shifting competitive landscape, future consolidation of offerings and the potential failure of early-stage technologies or functionality in the blockchain platform market," said Mr. Lee.

Similar to the hybrid multi-cloud market, perhaps the distributed ledger adoption trends will result in a hybrid multi-blockchain environment within the foreseeable future. We'll have to wait and see if the blockchain potential for digital transformation develops into yet another complex multiplatform market.