blockchain

Intel and Microsoft Move Aggressively to Embrace Blockchain and IBM Should Be Happy

By /

Currently, when it comes to Blockchain, IBM is the big player on the block and, for the most part, they’ve largely stood alone. Intel and Microsoft announced that they are entering this segment and that may be OK with IBM because of the phase the related market is in. Blockchain has become incredibly important particularly in banking as it shed its cryptocurrency roots to increasingly better ensure financial transactions globally. Given IBM, Microsoft, and Amazon are all now competing for global services it isn’t surprising that Microsoft would step into the Blockchain arena, and they just did, but not alone. Apparently, Intel is part of this party and when those two vendors team up change is in the wind.

Let’s talk about Intel, Microsoft and Blockchain this week.

Bad News For IBM Blockchain?

Not really, at least not now. The thing is that Blockchain isn’t yet even close to critical mass in terms of deployment and it does represent a new, and to some, exceedingly risky technology. While IBM’s brand is likely the strongest in overcoming concerns like this, a single vendor solution is never ideal because markets move and those adopting that solution could be left isolated. The more vendors initially enter a new segment the more validity the related approach has and that is why Intel, and Microsoft’s entry likely helps IBM by expanding the total available market rather than hurts through competition particularly because IBM has more experience in this space now.

Bifurcation

There is also distinct difference in the kind of companies IBM and Microsoft are best at serving. While the joint Microsoft/Intel announcement does say “enterprise”, Microsoft has traditionally been better in the mid-market, and Intel doesn’t change this, while IBM is typically far stronger in large enterprises.

This suggests the competitive overlap in terms of ideal target companies for each firm’s solution will be relatively small. This lack of competitive overlap should continue both firms focus on selling the benefits of Blockchain, critical to this phase of growing the market, and less on competitive positioning against each other except when it comes to market focus and segment targeting.

The Nature Of Building A Blockchain Market

One of the dangers in the creation of a new market, like the one being created for Blockchain, is that the vendors supplying the solution prematurely focus on competitive activities over market building efforts. They disparage each other too early and given a new technology already has a lot of natural FUD (Fear, Uncertainty, and Doubt) the result is that as they struggle for competitive advantage they scare potential early adopters away from the technology and the market growth slows, stalls, and they can even kill a market before it matures. This last happened between Blu-ray and HDDVD, the competition slowed advancement so much that streaming took off before the winning technology replaced DVDs fully and the market largely moved on without taking the interim step. Tablets were supposed to replace PCs but competition stalled that effort, PCs addressed their shortcomings, and rather than replacing PCs tablets became more of a niche product.

Clearly there will be technologies that better assure transactions that will eventually eclipse Blockchain, but by not directly competing, IBM, Intel, and Microsoft better potentially assure Blockchain reaches critical mass long before a Blockchain replacement becomes viable.

Why You Care?

We all pay for financial fraud, and it is particularly hard on the elderly. It is a cost born by the banks but that cost becomes part of their overhead which is passed through to us in terms of cost of services from those institutions. In addition, fraud can drain our bank accounts, mess up our credit, and can turn our lives into months of administrative hell as we move to undo the damage that fraud has done to our reputations.

Blockchain, while not a panacea, can mitigate or eliminate much of the fraud currently in market potentially both making us safer and making our banking services far less expensive. It is therefore in our best interest that this technology be adopted broadly and well and having players like IBM, Intel, and Microsoft drive this is in our best interest.

Wrapping Up

In the initial phases of a new market like the one Blockchain represents it is very important there are multiple viable vendors who don’t excessively focus on each other and instead focus on growing the market. With the entry of Microsoft/Intel into this mix and the fact they effectively will bifurcate the market with IBM we get what may be a near ideal mix of capability and non-competitive reach allowing this market to grow more quickly and, hopefully, keep us all a lot safer.

Latest posts by Rob Enderle (see all)

Related Posts

Comments are closed.

Scroll to Top