Blockchain and the IoT: Piledriving Into a Data Network Near You
Say the word “edgy,” and maybe you think of Johnny Depp or Johnny Knoxville. Anthony Kiedis of the Red Hot Chili Peppers. Ok, the whole BAND the Red Hot Chili Peppers. Steven Tyler of Aerosmith. P!nk. Aziz Ansari. Christopher Walken. Yaya Dacosta. Rooney Mara. Or maybe even one of the author’s favorite guitarists of all time, U2’s The Edge. 1
Given some of the characters in the preceding paragraph, your organization may not want think of itself as edgy. What you’d better do, however, is get a handle on the onslaught of data that’s about to come charging at you at top speed and full force “off the edge,” like a pass-rusher in the Super Bowl, ready to piledrive you into the turf.
Now that I have the attention of those who breezed right past edgy entertainers and piledriving pass-rushers but stopped dead in their tracks at the word risk, I want to talk first about the IoT. The IoT has a potential economic impact of $3.9 trillion to $11.1 trillion per year by 2025. 2 To share in the IoT’s wealth of opportunity, companies must harness its power, and some already are. For example, in the financial services vertical, the auto insurance sector is using the IoT to track vehicles and, by inference, drivers, in order to make go/no-go decisions on insuring drivers and to set rates. Some banks are taking IoT data from sensors and cameras, and in-store (in-bank?) retail analytics, and combining it with customer usage and behavior data. This enables the banks to adjust atmosphere, offerings, and even bank personnel to win and retain customers.
What’s coming next for IoT in financial services? Consumers are already beginning to execute common day-to-day transactions through smart home devices, and financial institutions are beginning to do the same with more complex financial transactions. Users are already using their fitness trackers and other wearables to check not only their vital signs but also email and to take calls. Financial institutions will be joining this “race to the wrist” to interact with users and enable them to conduct transactions on these devices. Likewise, the connected car will increasingly become a wallet on wheels: users accustomed to paying tolls with add-on devices in their vehicles will soon have the ability to pay for a wide range of goods and services using capabilities embedded in their connected cars.
Now let’s consider blockchain. Banking has long been based on transactions against a central ledger. Blockchain blows that to smithereens. 3 It’s a peer-to-peer, distributed architecture that does not require a central authority to settle transactions. By decentralizing transactions, moving them conceptually to the edge of the financial network—and by using cryptography, and other security-enhancing methods—blockchain creates a system that minimizes risk by not letting hackers into the core of anything because the core is meaningless or, for all intents and purposes, no longer exists. And it makes fraud, if not impossible, highly improbable, because, in the spirit of configuration management databases (CMDBs) everywhere, the blockchain creates a single source of truth—enforceable from anywhere in the blockchain—that leaves little room for fraudulent transactions to gain a foothold.
Are you seeing it yet? IoT is much further along the curve on this, but blockchain is following quickly along: in the course of changing the world as we know it, these potentially phenomenal phenomena are set to unleash massive volumes of new data—data from the edge—onto existing systems.
Companies must innovate to survive. That means they need an enterprise data management platform that’s locked and loaded to take on the added volume, spiraling complexity, and new types of new data piledriving in from the edge. It must offer peak performance on massive datasets, helping all organizations to deal with large volumes of IoT and soon, blockchain, data to drive efficiencies and manage risk. This will help companies optimize internal processes and reduce costs; aids in the development of new products and services; and supports both revenue generation and retention. Powerful analytics help companies of all types quickly run scenarios to assess the impact of new business models on the business.
Want further proof of the growing importance of dealing with blockchain and intelligence at the edge? Here you go: it is not just about crypto or disrupting the financial services space. Some companies are already putting blockchain to work in areas like adtech and retail/e-commerce. And anyone who deploys IoT had better get sharp, in a hurry, when it comes to pushing intelligence at the edge—and, just as importantly, making sure that whatever data it does push to the core is selectively chosen. Otherwise, you get scenarios such as those I analyzed in an earlier era, when telecom networks were exploding, and the data they sent racing into the core choked all but the sturdiest, most industrial-strength, built-for-telecom platforms.
Think about it: just when many business decision makers thought they had solved the riddle of big data, here come the IoT and blockchain to up the ante by sending data volumes and complexity once again spiraling out of control. There has never been a more important moment in time than this one for companies to equip themselves with solutions that can help their teams act on analytic insights. Those who do will gain a competitive edge. Those who don’t will feel the cutting edge of competition more deeply than ever before.
Now, that’s edgy.
Contact me to learn more about all of this, and for suggestions on which sorts of enterprise data management platforms may be up to the job.
1 Decidedly non-edgy real name: David Howell Evans. For the record, the author’s #s 1-4 favorite guitarists are Steve Vai, George Lynch, Mark Tremonti, and Jack White, with The Edge a solid #5.
2 McKinsey & Company, Unlocking the potential of the Internet of Things
3 The Smithereens: edgy band from an earlier era