Everyone loves to hate grading reports (including the analysts who write them!) If the evaluation criteria are too numerical, some people think the report lacks any strategic analysis. If the criteria favor analyst judgment over hard facts, some people think the report is biased based on the analyst’s emotions or other factors.
And unfortunately far too many people care only about the one evaluation graphic — missing much of the depth and nuance about the market in the report itself needed to really put the graphic in perspective. In fact, the graphic isn’t about who’s good or bad at something, but about finding the best fit for a buyer’s needs and preferences.
My job is to give you my insights about a space but also to give enough context so you can make informed choices with that analysis. And that could include coming to the conclusion that you disagree with a result or a starting assumption.
With that in mind, I want to be more transparent about some of the disagreements with the recent blockchain primer I wrote. I gave the service providers evaluated in the report the opportunity to tell me their thoughts.
Below are the comments from the ones who replied. (I choose to believe the non-responses from other providers as agreement that the report was perfect…)
The Providers React
Many providers appreciate HfS Research’s effort to take on this emerging area, noting that the market wants more information. They also mention many improvement ideas. Here are the questions I asked, the answers I received, and any final comments I have on the question.
What do you think the report missed/didn’t cover sufficiently?
Generally, the providers don’t have too many issues with what was covered but offer some ideas of places the report could have drilled deeper, including:
- The report could have included more specific offerings and capabilities, like the availability of a provider’s internal and external training on blockchain as well as the availability of a consultative framework to support clients in identifying and qualifying use cases to co-creating the client’s product. Other examples of specific offerings include sandboxes and design thinking sessions.
- While the report focused on BFSI, it could have included a broader perspective on where blockchain technology is heading, and which industries and segments are building the first implementations.
CFR’s Take: We’ll be doing a full blueprint in 2017, where we’ll dig into specific offerings and get more detailed about capabilities. We’re also doing more research on many areas of blockchain, so the feedback on giving a broader perspective of the space makes a lot of sense, too.
What did the report get wrong?
Several providers feel that the report didn’t clearly define execution (the X axis) and innovation (the Y axis.) Some feel that they would have provided different information if the criteria were clearer during the research process and mention the following:
- The lack of clarity meant they couldn’t fine-tune their answers to what we were seeking. One provider pointed out that we didn’t specify if our focus on client projects was focused on something like numbers of billable blockchain consultants on projects or if it was people who had been trained on blockchain internally, or capacity available to start new projects.
- Related to explaining innovation and execution axes, it would have been helpful to explain each provider’s positioning specifically. For example, what made one player more innovative than another? The mini-profiles didn’t specifically call out the grid positioning.
- Is the Blueprint Guide the right way to measure blockchain, given it’s so new? Maybe a different report format to explore a market before doing an evaluation is a better approach.
CFR’s Take: Since this was an early first-pass at assessment and not a full blueprint, we used a starting point set of criteria. Also, we recognize that this report switched from one analyst to another, so each analyst always brings a different perspective. But the broader point is taken to be clearer in how we define criteria.
What would be the next logical place for HfS to explore blockchain further?
There are some common requests here, including:
- Cover more industries. Several providers mention healthcare, retail, media, and government as other industries they feel should be covered and where they had good client examples that the BFSI report by definition didn’t demonstrate. They also want us to keep studying blockchain in financial services and not stop with just this one report.
- By domain area, IoT and supply chain demonstrate great use cases for blockchain and need further exploration.
CFR’s Take: We’re researching supply chain and IoT in blockchain and agree that they’re great places to explore further. We’re looking at other industries too, but that may take longer depending market developments and other factors.
What Did The Report Miss Or Get Wrong About Your Firm?
Most providers didn’t take us up on the offer to publicly voice their issues with our assessments of their firms, but two did. I edited for space and clarity but otherwise used the exact wording from the providers.
At EPAM, we’re working on different use cases with different clients and we realize that we can group use cases by technical requirements towards blockchain. We created two prototypes (platforms) that cover over a dozen use cases from multiple industries. After review, we realized that this was not very clear in our initial presentation.
More generally, EPAM believes that when it comes to implementing software solutions there are multiple components/layers in the game: Front End, Integration layer, Backend (business logic + storage). Blockchain is a variation of a storage and limited business logic with some features to improve collaboration between parties. There are a number of different Blockchain frameworks available on the market. Most of the core crypto functionality will be addressed by framework developers so there is no urgent need for service providers to have an army of cryptographers (this is good if they have several).
Service providers need to have Architects, Business Analysts, Testers, and Infrastructure Engineers to be able to integrate/use Blockchain into projects. Their readiness should be measured by the core knowledge they have, ability to scale this knowledge, availability of consultative framework, projects completed (PoC, Production), infrastructure readiness, and client feedback.
IBM thinks HfS may have underestimated IBM’s innovation in blockchain and offered the following further details. (CFR NOTE: IBM also referenced several documents on blockchain that are available on the company’s website for anyone who wants to get into the details behind the statements below.)
IBM thought leadership. IBM, with the support of the Economist, recently surveyed 200 financial institutions in 16 countries on their experience and expectations with blockchains. This study includes findings like:
- Fifteen percent of banks and 14% of financial market institutions surveyed (the early adopters) intend to implement full-scale, commercial blockchain solutions in 2017, and roughly 65% expect to have blockchain solutions in production in the next three years.
- Banks identified three business areas with the highest benefits (reference data, retail payments and consumer lending) and three areas where blockchain-based business models will have the most impact (trade finance, corporate lending and reference data).
- Financial markets institutions are investing most in five areas: identity and KYC, clearing and settlements, collateral management, reference data and corporate actions.
- IBM client innovation leadership with the most centers around the world to help clients get started on their first blockchain project, with IBM Bluemix Garage for Blockchain centers in New York, London, Singapore, and Tokyo. IBM can also dynamically open a “popup” center when and where needed.
- IBM industry innovation leadership, as a founder and leading contributor to the Hyperledger Project.
- IBM offering innovation leadership with IBM Blockchain, based on the Hyperledger Fabric, and available on IBM Bluemix, which enables developers to easily and quickly develop applications while testing security, availability, and performance of a permissioned blockchain network. IBM Bluemix also allows the IBM Blockchain service to be integrated with other Bluemix services such as IoT, Mobile, Analytics and Watson.
Read through this and then don’t forget to add your own thoughts in the comments. Let’s get a dialogue going about blockchain services.