By Dr. Ben Zhang, COO and Co-Founder of NodeReal
Since as early as 2015, a World Economic Forum survey of over 800 executives and experts from the ICT sector estimated that 10 per cent of the world’s GDP is likely to be on the blockchain by 2030. True enough, the once-niche technology has seemingly reached new levels of mass awareness, with many now comfortably recognizing its transformative potential for consumers, businesses, and institutions alike.
The optimism is hardly misplaced: After all, the technology itself, being only a little over a decade old today, has seen its fair share of promising experiments for a broad range of applications and use cases across myriad industries. World-class IT giants such as IBM were among the first to tout its benefits in recognition of its ability to mitigate business-critical pain points, especially when it came to transparency, immutability, and traceability. Yet, many early enterprise proofs-of-concept have since been abandoned or struggled to gain long-term traction.
It seems to be no fault of the technology, as tech executives continue to believe in its potential, citing tangible benefits to their bottom line. Last year, the Deloitte Global Blockchain Survey found that 80 per cent of surveyed executives believed that their industries would see new revenue streams arising from blockchain. Despite the positivity in the market, there is a disconnect between ideation and implementation — what has led to such challenges and what’s needed to supercharge the next wave of enterprise blockchain adoption?
Going bigger on cultivating a culture of innovation
Over time, digital transformation has grown in complexity. For many traditional organizations — both enterprises and SMEs alike — this rollercoaster of a journey involves a series of ups and downs as business leaders implement new technologies while needing to consciously evolve their organization’s culture to one that invests and internalizes innovation at its core.
Throughout this process, however, executives often overlook the importance of this human factor which is at the heart of ‘ecosystem readiness.' This ‘readiness’ forms the base of the foundation for tech implementation within any business. Business leaders need to encourage an open culture and an open mindset — to both new technologies and processes — which ultimately benefit both employees and the organization at large.
Ecosystem readiness is especially acute when it comes to nascent technologies such as blockchain. It’s a case of having the right talent, the right business case, and most importantly, the right partner — which I’ll go into later on — to turn experiments into practical applications. S&P Global Market Intelligence’s 451 Research unit identified that an imbalance in this potent mix of factors results in the various bottlenecks to enterprise blockchain adoption: Almost 30 per cent of respondents cited a skills gap as a core deterrence, while approximately 20 per cent cited complexity, challenges in systems and data integration, and the inability to calculate ROI.
Without the right talent which comes at a significant cost, internal buy-in, and a clear business case, it’s no surprise that efforts at building custom solutions from the ground-up struggle to succeed. Instead, we need to chart a new, but familiar course for the implementation of enterprise blockchain.
The power of a one-stop solution
The advent of digital meant that the very infrastructure supporting a new generation of businesses needed to evolve. Managed cloud services rapidly changed the game in how data could be stored and accessed at scale, all without compromising the quality and dexterity of business operations. Third-party IT providers offering such services took the guesswork out of cloud services on an end-to-end level — all the way from strategy and implementation to ongoing management — which led to significant cost-savings in terms of time, money, and resources. It comes as no surprise that this year, 73 per cent of surveyed enterprises expect to rely on even more managed cloud services over time, pointing to its tried-and-tested commercial viability as a model adopted on an industry-wide level.
The managed services model brings a great deal to the table when it comes to mitigating the challenges posed by enterprise blockchain — a comparatively far more nascent system of technologies, practices, and workflows. What it effectively shows is that what a company needs is a trusted partner who can bridge the knowledge gap.
At NodeReal, I’ve pioneered a one-stop approach to enterprise-grade blockchain services as I’ve seen first-hand how both traditional and Web3 businesses lack the right infrastructure to transform their ideas into commercially-viable solutions. And rather than building from scratch, they can instead tap into infrastructure providers such as ourselves who can offer greater transparency, scalability, cost-effectiveness, as well as opportunities for knowledge-sharing.
The business case for this approach is clear, with the same names in cloud-managed services, too, now applying the same model to the “blockchain-as-a-service” (BaaS) market: Take AWS, which announced that it would be doubling down on its node management capabilities earlier this year.
Cloud’s managed services model says a lot about what it takes to implement new technology in a commercially viable way — and more often than not, partnering with a one-stop solutions provider is the most cost-efficient way to go from ideation to implementation in the short to mid-term while remaining sustainable for the long term.
Building for the future: Commercially viable and scalable for the long term
The BaaS market is forecasted to reach new heights by end of this decade with a valuation of US$26.5 billion — and I’m confident that growth will be driven not only by Web2 businesses strengthening their blockchain strategies but also by Web3-native businesses in need of infrastructure built for scale and built for mass adoption.
This focus on infrastructure can be seen not only in the business context but also in terms of dominant investment trends within the blockchain ecosystem. Despite VC funding contracting towards the end of 2022, top VCs such as Andreessen Horowitz, Softbank Vision Fund, and Sequoia Capital still continued to actively invest in blockchain infrastructure-focused projects last year, and in 2023, infrastructure projects were recognized as the most stable investment vertical.
The demand for BaaS is also set to intensify in digital economy businesses in verticals such as gaming where scalable, purpose-built infrastructure is key. Traditional AAA games are finally showing some signs of openness to the space, such as Andreessen Horowitz-backed CCP Games, despite years of long-held skepticism about the tech’s ability to deliver on value. With one-stop solutions, studios can instead focus on what they do best: Developing enriching experiences for their players, all with the assurance that the underlying infrastructure can scale and grow with demand, without sacrificing the quality of gameplay.
However, it’s world-class tech giants that can meaningfully move the needle when it comes to widespread recognition of blockchain’s place in the business world — whether it’s e-commerce SaaS leader Shopify’s blockchain commerce tools or Google parent company Alphabet which invested US$1.5 billion into Web3 firms to drive future blockchain integrations into its user offerings.
It’s clear that the demand for blockchain is here to stay, and for the first time, businesses are now better equipped to make better business decisions with a long-term view in mind. Beyond a clear business case, it’s also taking the time to lay the groundwork for the right organizational culture that champions innovation. With the technology now regarded as a vital part of an organization’s digital transformation journey, investing in a Web3 partner that pioneers a one-stop approach to best leverage the opportunities and manage risks on the horizon, is more critical than ever.
About the Author:
Dr. Xiao-guang (Ben) Zhang is the Co-Founder and COO of NodeReal, the leading blockchain infrastructure service provider. Dr. Zhang is a renowned pioneer in the blockchain infrastructure space and was a founding member of BNB Chain. At BNB Chain, Dr. Zhang was responsible for and facilitated the growth of the BNB Chain ecosystem, enabling it to become one of the world’s largest layer-1 blockchains in the world within two years of its launch.
Dr. Zhang’s experience spans the worlds of blockchain and traditional finance, having previously held senior leadership roles at Morgan Stanley for almost a decade before transitioning into Web3. Throughout his career, Dr. Zhang has managed teams across the United States, Europe, and Asia, across a myriad of industries spanning consulting, financial services, blockchain, and enterprise technology. Dr. Zhang holds a Ph.D. in Computer Science from Shanghai Jiao Tong University which is among Asia’s top-ranking higher-education institutions.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.