Overall, our 2019 predictions for distributed ledger technology (DLT, AKA blockchain) panned out pretty much as expected. Some of the key trends we outlined then will persist in 2020, such as enhanced services and tool offerings, and the most forward-looking firms will continue exploring strategic approaches to the tokenization of digital and physical assets, supported by smart contracts. The quest for dominance among the frameworks will continue to play out in 2020; we’ll continue to see the usual suspects of Hyperledger Fabric, Ethereum/Quorum, R3’s Corda, and MultiChain, but there’s also a chance of a newcomer upsetting the existing balance; with Digital Asset now firmly focused on its smart contract modeling language, DAML, and integrating it with other frameworks, we’ll see one or two interesting combinations emerge.
While there are still occasional headlines featuring DLT as the miracle cure for some intractable problem or other, the irrational exuberance of mid-decade has been firmly replaced by pragmatic and realistic approaches to blockchain projects. The projects under way in North America and Europe today may be fewer in number, but they’re among the main, serious enterprise endeavors, rather than speculative proofs of concept.
In 2020, enterprises will increasingly focus on operational matters, demanding deployment flexibility and interconnectivity between networks. Here are three of our 2020 predictions for DLT:
- More than 80% of blockchain deployments will be hybrid or multicloud — or both. Whether it’s because of regulatory requirements (e.g., needing to run a node on-premises in a country where the chosen cloud provider has no presence) or network participants wanting to stick with their respective existing public cloud providers, enterprises have made it amply clear to technology vendors that it’s not acceptable to only offer blockchain-as-a-service in that provider’s cloud. Tech companies have already responded with enhanced offerings and will continue to build these out to meet enterprise demand.
- Interoperability will move center stage. We’ve already witnessed the emergence of multiple networks addressing the same use case (e.g., tracking of foods and other goods or trade finance). And there are also processes that span multiple chains (e.g., both tracking and trade finance are part of an end-to-end supply chain). Participants in these permissioned networks are keen to understand whether, and how, these various chains will be able to interact. In parallel, we’ll also see a much greater focus on integration with existing systems; providers of existing automation and business process management solutions will seek to enhance their offerings with DLT capabilities.
- The public vs. private/permissioned blockchain debate will reach executive teams. While it’s not realistic today to support complex enterprise use cases at scale on a public blockchain, concerns about interoperability between multiple chain silos have already resulted in discussion about the role of public blockchains in enterprise processes. Newcomers such as Hedera Hashgraph and Kadena will draw further attention to the debate. Given the implications for process and risk management (to mention just a couple of key areas), it’s clearly not a pure tech decision. For now, only the most forward-looking enterprises and their technology partners are going where others fear to tread, but the topic is no longer off the table.
To get a more detailed analysis of our 2020 DLT predictions, read our full report.
Download Forrester’s Predictions 2020 guide to understand the major dynamics that will impact firms next year.