In business, as in life, things don’t always work out.
For IBM that may be true for its at least some of its blockchain efforts — and possibly for its blockchain unit as a whole.
Coindesk reported earlier this week that the tech giant has cut its blockchain staff “down to almost nothing,” citing four unnamed sources.
No staff, of course, means no development, no meetings, no push to bring concept off the proverbial whiteboard and toward reality.
One source told Coindesk the blockchain team has missed revenue targets for two years running. That source said IBM “didn’t really manage to execute, despite doing a lot of announcements.” Another source said the company is now fully focused on hybrid cloud, rather than on other initiatives.
Yet, on the official record, according to the company, spokeswoman Holli Haswell told the site via email, “Our blockchain business is doing well, thank you,” and said some units and staffers had been “realigned.” She said, too, that “IBM maintains a strong team dedicated to blockchain across the company. We have shifted some resources but remain committed to the technology, blockchain ecosystem and services. We see blockchain as a driver for our cloud business.”
Reorg Or Redeployment?
Whether reorg or total redeployment of assets (and people), one thing is for certain: At IBM, as elsewhere, the slew of announcements tied to blockchain trails back a few years — but proofs of concepts and headlines have yet to cross the Rubicon to real world business cases.
In some of the higher profile news tied to IBM, HyperLedger and blockchain, IBM has said that it is working with clients via IBM Food Trust to manage supply chain efficiencies and track food sourcing. There’s also TradeLens, where IBM and Maersk and others are working on digitizing shipping. Elsewhere, IBM has said that blockchain can be used to track the environmental impact of various product processes. In another instance, from the end of 2019, IBM had patented a way to prevent package theft by drones, using blockchain. We note that these and other announcements are readily accessed on Big Blue’s site, and thus, it’s not like the firm is scrubbing blockchain from the building blocks that, cobbled together, make up a corporate presence.
But it might be telling that the Coindesk report noted the blockchain unit has been missing its revenue targets, which may imply that companies (including IBM) had been hoping for more commercial momentum from these and other corporate ventures — sooner rather than later.
We note that many press releases cascade into financial news sites’ inboxes and then are updated sporadically, if at all. Part of the reason might be that the pandemic has shifted corporate focus, in some cases, to survival, or squeezed R&D budgets. In at least some case, the pandemic may be shining a spotlight on blockchain based opportunities — where, as Zac Cohen, COO of Trulioo, told PYMNTS, blockchain (and its immutable data exchanges) can be useful in digital ID efforts.
Separately, Gartner has estimated that 90 percent of enterprise blockchain platforms will need replacement through the next several months to be secure and avoid obsolescence. Fortune Business Insights has estimated that the enterprise blockchain market could hit $21 billion by 2025, with IBM as a clear leader. But then again, if IBM is revamping its efforts here, the path to those tens of billions of dollars (if it’s to be realized) seems anything but smooth.