Why the Future of Enterprise Blockchain Is in Applications

From its sketchy beginnings in the world of bitcoin and cryptocurrencies, blockchain has quickly established itself as an important part of the enterprise information technology (IT) landscape.

While it's easy to dismiss the growing adoption of blockchain by saying, "It's still early days," the fact remains that the use of blockchain is accelerating at an incredible pace. Oftentimes, this adoption takes place under the radar and goes unnoticed, but the reality is that blockchain is here to stay, and it will play a key role for many businesses in the near future.

In our recent report, "Enterprise Blockchain - Market Forecast & Scenarios 2019-2024," we concluded this market currently sits around $2.9 billion, which is much larger than many would have expected for an emerging market. However, this number is expected to rise even higher to an impressive $13.2 billion by 2024. While that's certainly a big number, it's only part of the story. The growth of the blockchain segment can be divided intro three main sources for its revenue, including:

Blockchain infrastructure
Business applications
Consulting services

Today, most of that revenue comes from consulting services and—to a lesser degree—core infrastructure. By 2024, we predict that consulting services will drop substantially, as blockchain applications and infrastructure begin to take over the market share. In practical terms, this means more enterprises will be ready out-of-the-box and will be able to plug and play blockchain-enabled products.

In fact, this shift is already underway. Companies at the high end, like Oracle and SAP, are already building and releasing blockchain applications as well as integrating blockchain into their existing products. In addition to these industry goliaths, there are a slew of smaller vendors and startups joining the party. For example, there are blockchain applications for legal (Advoretto), healthcare (Medicalchain), real estate (ShelterZoom), supply chain (ShipChain), and generic file management (Cryptyk) on the market, with many more on the way. Still others have started to target the digital signature market (Signatura), and the list goes on. While the future of these startups is unknown, they represent just the tip of the iceberg.

With so much interest and excitement in this emerging space, why is enterprise blockchain still running beneath the radar? The answer to that is surprisingly simple: Until now, those that wanted to jump on the blockchain train needed deep pockets to get on board (i.e., the aforementioned consulting services). But now, more and more low-cost and easy-to-adopt packaged solutions are coming to the market.

Over the next few years, blockchain will simply become an option to check off within many existing business applications, configured and ready to use.

Just like artificial intelligence (AI), blockchain will have a big impact on the way we approach business and the technologies used as we move forward. Even a little knowledge and understanding around the true capabilities of such innovations can go a long way.

Everything takes time, and nothing happens as quickly as we think or wish it would. But change is coming. In fact, the market is growing right as we speak, and new products are sent to production every week—the scale of which may surprise you.

Alan Pelz-Sharpe is the Founder and Principal Analyst of Deep Analysis, an independent technology research firm focused on next-generation information management. He has over 25 years of experience in the information technology (IT) industry working with a wide variety of end user organizations and vendors. Follow him on Twitter @alan_pelzsharpe.