©2017HfSResearchLtd.ExcerptforEY ConfidentialandProprietary│Page1
The Services Research Company
HfS Blueprint Report:Enterprise Blockchain ServicesNovember 2017Excerpt for EY
Tanmoy [email protected]
Authors:
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Table of Contents
Topic Page
DefinitionalFrameworks 4
ExecutiveSummary 9
StateoftheEnterpriseBlockchainServicesMarket 12
ResearchMethodology 24
ServiceProviderAnalysis 27
ServiceProviderProfile 31
MarketPredictions 33
About HfS 36
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Introduction to the 2017 HfS Blueprint Report: Blockchain Services
n Distributedledgertechnologies,includingblockchain,promisestofundamentallychangeanddisruptbusinessmodels,potentiallyassignificantlyastheinternetitself.
n HfSrecognizesblockchainasaHorizon3changeagentfordigitaloperations– withsignificantvaluepotentialbutstillnascentformainstreamadoption.
n The2017EnterpriseBlockchainServicesBlueprintinvestigatestheblockchainspacetoprovideacomprehensiveandfoundationalanalysisoftheblockchainsolutionsandservicesmarketforenterprises.
n Thereportdefinestheblockchainecosystemandanalyzestherelativeadoptionofblockchainservicesacrossallindustriesandusecases.
n Itfocusesonblockchaincapabilitiesof21serviceproviders.Thereportalsocoversmarkettrends,valuepropositionandchallenges,andpredictionsforenterpriseblockchainservices.
n Unlikeotherquadrantsandmatrices,theHfS Blueprintidentifiesrelevantdifferentialsbetweenservicesprovidersacrossanumberoffacetsintwomaincategories,innovationandexecution.
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Definitional Frameworks
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Distributed ledgers, blockchain, and smart contracts are interrelated, but different
Blockchain
SmartContracts
Adistributedledgerisreplicated,shared,andsynchronizeddigitaldatageographicallyspreadacrossmultiplesites,countries,orinstitutions.
DistributedLedgersdonothaveacentraladministrator.Theyarebasedonpeer-to-peernetworkswithaconsensusalgorithms
Blockchain isadistributedledgerusedtomaintainacontinuouslygrowinglistofrecords,calledblocks.Eachblockcontainsatimestampandalinktoapreviousblock.Bydefinition,blockchainsareinherentlyresistanttomodificationofthedata.Oncerecorded,thedatainanygivenblockcannotbealteredretroactivelywithoutthealterationofallsubsequentblocksandacollusionofthenetworkmajority.
Allblockchains aredistributedledgers,butnotviceversa
Smartcontractsarecomputerprotocolsthatfacilitate,verify,orenforcethenegotiationorperformanceofacontract,orthatobviatetheneedforacontractualclause.
Notallblockchainframeworkssupportsmartcontracts
DistributedLedgers
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Horizon1:ActNow
Horizon2:WatchOutHorizon3:Investigate
Rightshoring
RoboticProcessAutomation(RPA)
SmartAnalytics
ArtificialIntelligence(AI)
Blockchain
InternetofThings(IoT)
Blockchain is a Horizon 3 Change Agent for digital operations
Successinthefuturewillbedeterminedbyhowwellclientsandserviceprovidersareabletocombinethepowerofmultiplechangeagentsintointegratedsolutionsthatsolvecrucialbusinessproblems
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The blockchain ecosystem has multiple sets of players; this report focuses on blockchain service providers and consulting firms
BlockchainPlatforms
andFrameworks
BlockchainToolsandSoftwareProviders
BlockchainSolutionProviders
Blockchainproviderecosystem
Permissionless(Public) Permissioned(Private/Hybrid)
ServiceProviders
ConsultingFirms
Consortiums Startups
Rubix
Fabric
Academia,regulators,andnot-forprofits
Illustrative,notcomprehensiveScopeofthisreport
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The end-to-end blockchain services value chain for enterprise use cases has four distinct stages
1.Strategicadvisory
2.Prototypedevelopment
3.Productionbuild
4.Systemintegration
Opportunityidentification,businesscasedevelopment,platformselection,roadmapdefinition
Proofofconcepts,prototypes,andpilots
Solutionimplementationandmanagementinliveclientenvironment(includesparallelrunstolegacysolution)
Integrationwithenterprisesystems,ongoingsupportservices
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Executive Summary
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Executive Summary(page 1 of 2)
n EnterpriseblockchainservicesaregearedtobecomeaUS$1billionmarketby2018.Thecurrentrevenuesfromenterpriseblockchainservicesarerelativelysmall(US$500million- $600million),butweexpecttoseeaproliferationinenterpriseblockchainserviceswithanticipatedYoYgrowthinexcessof100%overthenext12-24months.
n Blockchainserviceswillcreateadisruptiveimpact,potentiallyassignificantastheinternetitself,inthelongrun.Blockchainhasthepotentialtodrivenewbusinessmodelsanddisruptexistingonesbyremovingtheneedforintermediaries.However,HfSexpectsafivetosevenyearhorizonforblockchaintofullydelivergiventhenascencyofthetechnologyandassociatedchallenges.Inthemeantime,wedoexpectblockchaininitiativestodrivesignificantefficiencygainsinexistingbusinessmodelsaswellre-imaginedtransactionalmanagementandITinfrastructurethatcouldbeasourceofcompetitiveadvantage.
n ThemarketiswitnessinganexplosioninblockchainPoCsandpilots,butin-productionsolutionsarefewandfarbetween.Ouranalysissuggeststhat90%to95%oftheenterpriseblockchaininitiativesareatthestrategyformulation,PoC,orpilotstage.Only5%to10%successfulpilotsprogresstoproduction.Almostalllivein-productionengagementsareparallelorshadowenvironmentswherelegacyenvironmentshavenotbeencompletelyreplaced.Asblockchainsolutionsbecomeproductionready,thereisastrongmarketforsystemintegrationacrossblockchainsandexistinglegacyandERPtechnology.
n Blockchain(likeanynascenttechnology)isgoingthroughthe“90-9-1”adoptionchallenges.Ninetypercentofenterprisesarestilltryingtointernalizetheconceptofblockchainanditsrelevantimpactontheirbusiness.NinepercentofenterprisesthatidentifiedrelevantusecasesarestrugglingtodeterminethestartingpointfortheirPoCsandpilots.Andthe1%ofenterprisesthathavesuccessfulpilotsarechallengedwithscalabilitytoaproduction-gradeenvironment.Lackofformalregulations,talentavailability,andmarketstandardscombinedwithtechnicalinter-operabilityandthroughputissuesarethekeychallengesthattheblockchainmarketistryingtosolvefor.
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Executive Summary(page 2 of 2)
n Adoptionofblockchainisaglobalphenomenon.Unlikemostothernewtechnologies,themoredevelopedwesterneconomiesarenotdominatingblockchainadoption.WehavewitnessedalargenumberofinterestingusecasesinJapan,Australia,Nordics,ChinaandSouthEastAsia,andMiddle-EastbeyondNorthAmericaandWesternEurope.
n EthereumandHyperledgerFabricareemergingastheblockchainframeworksofchoiceforenterpriseblockchaininitiatives.Ethereumaccountsfornearlyhalfoftheenterpriseusecasesandrepresentsthemostmaturewithaprovensmartcontractframeworkandusecasesacrossindustries.AdoptionofHyperledgerFabricisexpectedtopick-upaftertherecentreleaseoftheproduction-readyversiongiventhatitisdesignedforenterprises.R3Corda,Ripple,Quorum,Multichain,BigChainDB,andChainareothernotableblockchainframeworksusedinnearly45%oftheenterpriseusecases.
n Blockchaininitiativesarestartingtogetwovenwithotheremergingtechnologies,especiallyIoTandAI.IoTinitiativesarestartingtouseblockchaintoalleviatescalability,privacy,andreliabilityconcerns.AIandblockchaintechnologiesarealsointersectingasthesourcesofthisdatabecomemorediverseanddata-sensitivity,governance,quality,andintegritybecomeevenmoreimportant.
n Financialservicesleadblockchainadoption;however,credibleusecasesacrossalmostallindustriesareemerging.Severalfinancialservicesusecasessuchaspayments,tradefinance,andwalletsarefairlyadvancedintermsofadoption.Insurance,professionalservices,manufacturing,retail,publicsector,energyandutilities,andhealthcareareotherindustrieswhereanumberofinterestingblockchainusecasesareemerging.Ouranalysisindicatessignificanttractioninidentitymanagement,provenancemanagement,claimsandpaymentprocessing,andownershiprecording.
n Serviceproviderlandscape.Weassessed21serviceprovidersacrossmultipledimensionsonblockchaininnovationandinnovation.TheHfSWinner’sCircleforthe2017EnterpriseBlockchainServicesiscomprisedofAccenture,Deloitte,EY,IBM,KPMG,andWipro.
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State of the Enterprise Blockchain Services Market
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The enterprise blockchain services market is relatively small (US $500 to $600 million) but has an expected annual growth in excess of 100% and immense long-term potential
n Crypto-currencymarketcaphasincreasedfromUS$16to$180billioninlessthanayear
– Themarketcapforcryptocurrencieswas$16billionatthestartof2017.Itrosespectacularlyto$110billionbyJune2017,felltolessthan$70billionbymid-July,thenrosetomorethan$170billioninOctober2017.
– Thecryptocurrencymarketcapisnotdirectlyrelatedtoenterpriseblockchainrevenues,butdoesindicatethestronginterestandpotentialofblockchain-basedsolutions.
– Thevolatility,however,continuestobeaconcern.Readmoreonthetopichere.
Enterpriserevenuesfrom
blockchainservices=US$500to$600
million1 with100%+YoYgrowth
Crypto-currencymarketcap
reachesnearlyUS$180billion2
n Thecurrentrevenuesfromenterpriseblockchainservicesarerelativelysmall(US$500to$600million1),largelydrivenbystrategicadvisoryandprototypebuilding
n WeexpecttoseeaproliferationinenterpriseblockchainserviceswithanticipatedYoYgrowthinexcessof100%overthenext12-24months
– AdoptionacrossindustriesbeyondbankingisincreasingandwillresultinafargreaternumberofenterprisestestingthewatersthroughpilotsandPoCs.
– ExistingpilotsandPoCswillstarttoscaleupintoproductionenvironments,thoughweexpectmostclientstotakearisk-averseapproachofrunningblockchainsolutionsinparallelwithlegacysolutionsuntilthetechnologiesmaturefurther.
– Revenuesfromsystemintegrationserviceswillemergeasmoreclientsbecomeproductionready.
1. HfS estimatesbasedon2017headcountassessmentof20+leadingblockhainservicessuppliers
2. Coinmarketcap.comasofOct30,2017
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The inherent features of blockchain manifests into a disruptive potential over the long run
Near-term:Businessimpact
Medium-term:Competitivedifferentiation
Long-term:Creativedestruction
• Processexcellenceandefficiencygainsinexistingbusinessmodels
• Traceabilitythroughprovenanceandassettracking
• Digitizationofcontractsleadingtofastersettlements
• Managementofprivatedataanddigitalidentity
• Re-imaginedITinfrastructurethatissharedanddecentralized
• Re-definedtransactionmanagementthatistransparentandimmutable
• Additionaltrustinmulti-partycollaboration
• Creationofnewbusinessmodels
• Removingtheneedfortrustedintermediaries
• Disruptionoftraditionalbusinesses
Enablingblockchainfeatures
Immutabletransactions
Hashing-baseddata-integrity
DistributedshareddataoverP2Pnetwork
Automatedsmartcontracts
Crypto-enabledsecurity
Consensus-driventrust
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The market is witnessing an explosion in blockchain PoCs and pilots but in-production solution are few and far between
1.Strategicadvisory
2.Prototypedevelopment
3.Productionbuild
4.SystemIntegration
5%-10%
50%-60%
30%-40%
N=~200blockchainengagementsacross20serviceproviders
Identifyingblockchain-basedusecases,creatingbusinesscases,orselectingaplatform
About35%-40%ofengagementsareatthePoCstagewhile15%-20%ofengagementshaveprogressedtopilots
Onlyahandfulofsuccessfulpilotsprogresstoproduction.Almostallengagementsatthisstageareparallelorshadowproductionenvironments,wherelegacyenvironmentshavenotbeencompletelyreplaced
Therearenegligibleblockchainsolutionsthathavebeencompletelyintegratedwithclients’existingprocessandsystemslandscape
Nocredibleevidence
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Adoption of blockchain is a global phenomenon
• Unlikemostothernewtechnologies,themoredevelopedwesterneconomiesarenotdominatingblockchainadoption
• WehavewitnessedalargenumberofinterestingusecasesinJapan,Australia,Nordics,ChinaandSouthEastAsia,andtheMiddleEastbeyondNorthAmerica,andWesternEurope
• Acrossgeographies,blockchainadoptionstartedwithfinancialservicesbutisnowexpandingtootherindustriesaswellasthepublicsector
AdoptionofEnterpriseBlockchainServicesbyGeographyRelativenumberofblockchaininitiatives
N=~50blockchainengagementsFS=FinancialServices
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Blockchain (like any nascent technology) is going through the “90-9-1” adoption challenges
n Overallnascencyofblockchainsolutions
n Lackofunderstandingindistributedledgertechnologiesandusecases
n Lackofmaturityofblockchainplatforms
n Lackofsuccessstoriesinthemarket
n Internalstakeholderbuy-inaroundbusinessmodelchangesandthreatofdisruption
90%ofenterprises 9%ofenterprises 1%ofenterprises
The”90-9-1”BlockchainAdoptionChallengeforEnterprises(Illustrative)
Initialhump:Whatisblockchainandwhatisthebusinesscase?Mostenterprisestodayaretryingtointernalizetheconceptofblockchainanditsrelevantimpactontheirbusiness
Intermediatehump:Howdowegetstarted?SeveralenterprisesthatidentifiedrelevantusecasesarestrugglingtodeterminethestartingpointforPoCsandpilots
Advancedhump:Howdowemakeitreal?Afewenterprisesthathavesuccessfulpilotsarechallengedwithscalabilitytoaproduction-gradeenvironment
n Consortia-relatedchallenges(set-up,management,andgovernance)
n Difficultyinquantifyingthebenefits(ROI)anddevelopingatotalcostofownership(TCO)model
n Lackofclarityontechnicalarchitecture
n Private(permissioned)versuspublic(permissionless)decision
n Securityandprivacyconcerns
n Uncertaintyandlackofformalregulations
n Lackoftalentavailability
n Lackofmarketstandardsleadinginter-operabilityissues
n Integrationissueswithlegacy
n Culturalchangemanagement(internalandexternal)
n Latencyorthroughputissuesinproductionenvironment
n Servicesupportforblockchainsolutionslargelyundefined
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Ethereum accounts for nearly half of the enterprise use cases. Adoption of Hyperledger Fabric is expected to pick-up
21%
7%
19%
27%
27%
33%
60%
93%
93%
Others
Chain
BigChainDB
Multichain
Quorum
Ripple
R3Corda
HyperledgerFabric
Ethereum
12%
10%
6%
2%
10%
4%
13%
12%
52%
%serviceproviderswithexperience
%blockchainengagements
N=15serviceproviders N=52engagements
• Mostmaturewithprovensmartcontractframework;prevalentacrossindustryusecases
• Designedforenterprises;production-readyversionrecentlyreleased– adoptionexpectedtopick-up
• Prevalentinbankingindustry
• Prevalentforpaymentsusecases
• Enhancedspeedandsecurityfeatures
• Forasset-basedusecases
• IncludesBitcoin,Monax,Factom,IPFS,andStellar
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Blockchain initiatives are starting to get woven with other emerging technologies especially IoT and AI
n IdentityandsecurityaremajorissuesintheIoTspacetodayandcentralizedsolutionsforbotharenotprovingtobeadequate
n IoTcanmakeuseofblockchaintoalleviatescalability,privacy,andreliabilityconcerns.
n Sincetheblockchainistamper-proof,customerswillseeareducedriskoftheirpersonaldatabeingleakedviaasecuritybreach
n Blockchaincanbeusedintrackingbillionsofconnecteddevices,enabletheprocessingoftransactionsandcoordinationbetweendevices
n AIandblockchaintechnologieswillintersectasthesourcesofthisdatabecomemorediverseandmoresensitive,governance,quality,andintegritybecomeevenmoreimportant
n ThereisalatentneedforsophisticatedAI-drivenanalyticsasblockchainadoptionincreasesandmorecomplexandcriticaldataisstoredindistributedledgers
n Asblockchainsolutionsbecomeproduction-ready,thereisastrongmarketforsystemintegrationacrossblockchainsandexistinglegacyandERPtechnology
n Serviceprovidersarealreadystartingtobuildavarietyofintegrationtoolsandmethodologiestosupportthis
Blockchain IoT
Blockchain AI
Blockchain LegacyIT
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Service provider landscape
n Weassessed21serviceprovidersacrossmultipledimensionsonblockchaininnovationandinnovation
n HfSWinner’sCirclerepresentsserviceproviderswhoexcelatbothexecutionandinnovationdimensions.TheHfSWinner’sCircleforblockchainservicesinclude:
n The HighPerformersallexecutewellandareinvestinginfuturecapabilities,butneedtogainmoreconsistencyandtractionwithclientsforimpact.TheblockchainservicesHighPerformersare:
n TechMahindraand Virtusaemergedas HighPotentials,withstrongcommitmenttotheblockchainmarketbutyettogainthetractionrelativetoHighPerformersorHfSWinner’sCircle.
n DXC,Luxoft,Persistent,andThoughtWorksalsoparticipatedinourstudy,andweseethesecompaniesmakingtractioninexecutionandinnovation,justalittlefurtherbehindthantheirpeers.
– Accenture– Deloitte– EY
– IBM– KPMG– Wipro
– Capgemini– Cognizant– EPAM– HCL– Infosys
– LTI– NTTDATA– PwC– TCS
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Financial services lead blockchain adoption; however, credible use cases across almost all industries are emerging
LimitedactivityExplorationPilotsLivein-production
Blockchainindustryadoptionheatmapacross20+serviceproviders
**Professionalservicesindustrycoverageincludesauditing,accounting,legal,real-estate,etc.
FinancialServices
Insurance Manufacturing/CPG/Retail
ProfessionalServices
Publicsector Energy&utilities
Healthcare LifeSciences Telecom&Media
Travel&hospitality
HfSWinne
r'sCirc
le AccentureDeloitteEYIBMKPMGWipro
High
Perform
er
CapgeminiCognizantEPAMHCLInfosysLTINTTDATAPWCTCS
High
Po
tential TechMahindra
Virtusa
DXCLuxoftPersistentThoughtworks
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Several financial services use cases such as payments, trade finance, and wallets are fairly advanced in terms of adoption
LimitedactivityExplorationPilotsLivein-production
Blockchainuse-caseheatmapinfinancialservices
Thisisnotanexhaustivelistoffinancialservicesblockchainusecasesbutalistofmostfrequentlyreportedusecasesacrossthe20+serviceproviderscoveredinthereport
Payments/settlements
Tradefinance Wallets/KYC Trading Assetmanagement
Compliance Lending Auditing Investing/Transferpricing
Microfinance
HfSWinne
r'sCirc
le
Accenture
Deloitte
EY
IBM
KPMG
Wipro
High
Perform
er
Capgemini
Cognizant
EPAM
HCL
Infosys
LTI
NTTDATA
PWC
TCS
High
Poten
tial
TechMahindra
Virtusa
Persistent
Thoughtworks
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Blockchainuse-caseheatmapacrossindustries(excludingfinancialservices)
Thisisnotanexhaustivelistofnonfinancialservicesblockchainusecasesbutalistofmostfrequentlyreportedusecasesacrossthe20+serviceproviderscoveredinthereport
LimitedactivityExplorationPilotsLivein-production
Blockchain is also gaining significant traction in identity management, provenance management, claims and payment processing, and ownership recording
Identity Provenance/trackandtrace
Claimsprocessingandpayment
Titlerecords/Ownershiprecording
Anti-counterfeiting
Security Loyalty/Voting Longitudinalhealthrecords
Masterpatientindex
Clinicaltrials
HfSWinne
r'sCirc
le
Accenture
Deloitte
EY
IBM
KPMG
Wipro
High
Perform
er
Capgemini
Cognizant
EPAM
HCL
Infosys
LTI
NTTDATA
PWC
TCS
High
Po
tential TechMahindra
Virtusa
Persistent
Thoughtworks
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Research Methodology
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Research Methodology
Data was collected via RFIs, interviews, briefings, andpublicly available information sources Q3 2017. Sourcesinclude: clients, providers, and advisors and influencers ofblockchain services.
§ TalesfromtheTrenches:Interviewswithbuyerswhohaveevaluatedserviceprovidersandexperiencedtheirservices.Somecontactswereprovidedbyserviceproviders,andotherswereinterviewsconductedwithHfSExecutiveCouncilmembersandparticipantsinourextensivemarketresearch.
§ Sell-SideExecutiveBriefings:Structureddiscussionswithserviceprovidersregardingtheirvision,strategy,capability,andexamplesofinnovationandexecution.
§ PubliclyAvailableInformation:Thoughtleadership,investoranalystmaterials,websiteinformation,presentationsgivenbyseniorexecutives,industryevents,etc.
ThisReportisBasedOn:
ParticipatingServiceProviders
DataSummary
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HfS Blueprint Scoring: Enterprise Blockchain ServicesExecution 100%Marketcommitment
• Dedicatedblockchainpractice• Yearsofexperience• Talentheadcount
20%
Clientbase• Numberofclients• Referenceableclients
20%
Industrycoverage• Breadthofcoverage(numberof
industriescovered)• Depthofcoverage(maturityofservices
ineachindustry)
20%
Usecasecoverage• Breadthofcoverage• Depthofcoverage
20%
Experienceacrossblockchainvaluechain• Strategicadvisory• Prototypedevelopment• Productionbuild• Systemintegration
20%
Innovation 100%Articulationofvalueproposition
• Voiceofthecustomer• Clarityanduniquenessofmessaging
20%
Partnershipecosystemrobustness• Platformandsoftwareproviders• Start-upsandnicheproviders• Academiciansandlegalfirms• Consortiummemberships
25%
Experienceacrossblockchainplatforms• Permissioned(private)• Permissionless (public)
10%
Contributiontomarketdevelopment• Code-basesharing• Regulationsandstandards• Talentdevelopment• Othermarketchallenges
10%
Intellectualpropertyinvestments• Platforms• Solutionaccelerators• PatentsandotherIP
15%
AbilitytodriveadoptionbeyondPoCs 20%
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Service Provider Analysis
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Todistinguishserviceprovidersthatshowcompetitivedifferentiationacrossinnovationandexecution,HfSawardstheseprovidersthe“HfSWinner’sCircle”designation.
Guide to the Blueprint Grid
Execution Innovation
HfS Winner’s Circleshowexcellencerecognizedbyclientsinexecutionandinnovation
Collaborativerelationshipswithclients,servicesexecutedwithacombinationoftalentandtechnology asappropriate,andflexiblearrangements.
Articulatevisionanda“newwayofthinking,”haverecognizableinvestmentsinfuturecapabilities,strongclientfeedback,and aredrivingnewinsights andmodels.
HighPerformersdemonstratestrongcapabilitiesbutlackaninnovativevisionormomentuminexecutionofthevisionrelativetotheHfS Winner’sCircle
Executesomeofthefollowingareaswithexcellence:worthwhilerelationshipswithclients,servicesexecutedwith“greenlights,”andflexibilitywhenmeetingclients’needs.
Typically, describeavisionandplanstoinvestinfuturecapabilitiesandpartnerships,andillustratean abilitytousedigitaltechnologiesordevelop newinsightswithclients.
High Potentialsdemonstratevisionandstrategybuthaveyettogainmomentuminexecutionofit
Earlyresultsandproof pointsfromexamplesinnewserviceareasorinnovativeservicemodels,butlackscale,broadimpact,andmomentuminthecapabilityunderreview.
Well-plotted strategyandthoughtleadership,showcaseduseofnewertechnologiesorroadmap,andtalentdevelopmentplans.
ExecutionPowerhousesdemonstratesolid,reliableexecutionbuthaveyettoshowsignificantinnovationorvision
Evidence ofoperationalexcellence;however,stillmoreofadirectiveengagementbetweenaserviceprovideranditsclients.
Lessevidentvisionandinvestmentinfuture-orientedcapability,suchasskillsdevelopment,“intelligentoperations,”ordigitaltechnologies.
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HfS Blueprint Grid: Enterprise Blockchain Services 2017
ExcerptforEY
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Major Service Provider Dynamics: HighlightsExecution
• Marketcommitment: Accenture,Deloitte,IBM,andWiprohavemadeconsiderableinvestmentsinscalinguptheirblockchainpracticesonarelativebasisandhaverobustplanstomakefurtherinvestments.
• Clientbase:IBM leadsthemarketwith400+blockchain-relatedclientengagements.Morethan80%oftheirblockchainengagementshavebeendeliveredbytheirownBlockchainServicesteam
• Industrycoverage:Almostallserviceprovidersassessedareexpandingcoveragebeyondfinancialservices.DeloitteandIBM emergedastheproviderswithdeepestadoptionacrossallindustriesthattheyservecloselyfollowedbyWipro.
• Usecases:Accenture,EPAM,andNTTDATA havethemaximumbreadthofusecaseswhileLTI,Accenture,andIBMemergedwiththemaximumdepthofadoptionacrossitsusecases.
• End-to-endexperience:Giventhenascencyofthemarket,noserviceproviderhasyetdevelopedmaturesystemintegrationcapabilitiesforblockchainservices.
Innovation
• Articulationofvalueproposition:Accenture,Deloitte,EY,KPMG,andIBMmostclearlyarticulateacompleteandforward-thinkingvisionforblockchainservices.
• Ecosystemrobustness:Accenture,Deloitte,EY,IBM,TCS,andWipro havedevelopedthemostrobustecosystemoftechnologyproviders,start-ups,academia,andconsortiamemberships.AlmostallproviderswiththeexceptionofIBMareofferingalargelyplatform-agnosticgo-to-market.
• Contributiontomarketdevelopment:Almostallplayersarecontributingtomarketdevelopmentbyworkingwithregulators,settingstandards,developingtalent,andcontributingtothought-leadership.IBM isleadingtheeffortfollowedbyTCS,Wipro,Virtusa,andLTI.
• Intellectualproperty:Wehaveseentremendousmomentumindevelopmentofsolutionacceleratorsaswellasconsultingframeworksforblockchaindeployments.
• AbilitytodriveadoptionbeyondPoCsandpilots isemergingasamajorsourceofdifferentiation.IBM,Accenture,Deloitte,andWipro haveamongstthehighestnumberoflivein-productionclients.
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Service Provider Profile
Valuechaincoverage
MatureOfferings
Developing Capabilities
LimitedCapabilities
Yet toDevelopCapabilities
Industryandusecaseheatmap
Livein-productionclients
Pilotingwithclients
Explorationstage
LimitedExposure
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HfS Winner’s CircleBlueprintLeadingHighlights
• Commitment• Robustclientbase• Referencibleclient• Broadindustrycoverage• Experienceacrossvaluechain• Abilitytodriveadoptionbeyond
PoC
ValueChainCoverage:
Strategicadvisory
Prototypedevelopment
Productionbuild
SystemIntegration
**ProfessionalServicesindustrycoverageincludesauditing,accounting,legal,real-estate,etc.
Industrycoverage Manufacturing Lifesciences Healthcare Financial
servicesProfessionalservices Insurance Traveland
hospitalityTelecomand
mediaEnergyandutilities Publicsector
CPG,AgricultureProducts
Usecases Wallets Auditing Compliance Assetmanagement Trading Paymentsand
settlements Lending Investing Tradefinance Microfinance
Claimsprocessingandpayment Identity Security Anti-
counterfeitingProvenance,track
andtraceMasterpatient
indexLongitudinalhealthrecords Clinicaltrials
Titlerecordsandownershiprecording
Voting
EY Committedblockchainplayerwithproduction-readyclientsdrivenbyend-to-endservicesandglobalblockchainexpertise
Strengths Challenges
• Investmentandcommitment.EYhas12+blockchainsolution,50+engagements,andthreededicatedcentersinNYC,London,andIndia.Itisalsointegratingthetaxandauditteamsintotheblockchaindevelopmentprocess.
• End-to-endservice.EYoffersthefullserviceportfolioacrossblockchainimplementation,licensingblockchainsolutionsandsoftware,blockchain-as-a-service,andauditsofblockchain-basedbusinesses.Itstechnicalcapabilitybackedbystrongdomainandconsultingskillsallowsittocreatebusiness-focusedblockchainsolutionsthatincludesperspectivesonprocess,tax,audit,andcomplianceimpact.
• Technologyagnosticapproach.EYhascredibleexperienceacrossmultipleopen-sourcedblockchainplatformsallowingittoselecttherighttechnologystackthatisbestequippedtosolvetheclients’painpoints.
• AbilitytodriveadoptionbeyondPoCs. Around10%ofEY’sclientsareinearlystageproductionsystemand20%inpilotsandPoCphase.Itsabilitytodriveadoptionintoliveproductioninanascentspacelikeblockchainisdrivenbythechoiceofusecaseswherethereisshortageofatrustedintermediaryversusdis-intermediationitself.
• Expandingecosystem.EYhasstronganddeeppartnershipswithHyperledger,IBM,SAPandMicrosoft.Itisintheprocessoffurtherexpandingthatlistofpartnerstoincludeothermajorenterprisesoftwarevendorsandindustryconsortia.
• Enterpriseadoptionchallenges.Lackofregulationsandstandards,talentcrunch,securityconcerns,andoverallmarketnascencyarekeyinhibitorsofenterpriseadoption.EYwillneedtocontinuetoinvestandeducatethemarkettoovercomethesechallenges.
Blockchainpracticeoverview Blockchainplatformandtechnologycapability Blockchainecosystemandpartnerships
• 500+blockchain-proficientresourceswith30+dedicateddevelopers• Threemajorlabsfocusedonblockchain
• Financialservices-focusedcenterinNewYork• R&DlabinLondonstaffedbycryptographers,physicists,andexperienceddevelopers• Off-shoredeliverycenterinTrivandrum,India
• BlockchainskillsinSanFrancisco,SanJose,Tokyo,Seoul,HongKong,Singapore,Sydney,Dubai,Zurich,Berlin,andParis.
• 50+blockchainengagementsintheareassuchassupplychain,maritimeinsurance,vehicleownershipandmanagement,smartassetmanagement,tradingandsettlements,producttraceability,and auditing
• EY'sblockchainplatformexpertiseincludesEthereum,Hyperledger,Corda,andExonum amongothers
• EY’sblockchainsolutionsportfolioincludes• Inproduction:DigitalIdentityManagement,Wine
Blockchain,BlockchainExplorer• Inpilot:OpsChain,BlockchainAudittools,Ops
Chainprocurement,OpsChainBillofMaterials,OpsChainTraceability,EmployeeSkillstracker
• Indevelopment:CrossBorderTradeServices,OpsChainLogistics,MaritimeInsurance
• EYisamemberoftheHyperledgerproject
• IthaspartnershipswithIBMandMicrosoftandworksondevelopingsolutionswithBitFury andBTL
• EYalsopartnerswithacademicinstitutionssuchasCambridgeUniversity
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Market Predictions
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Blockchain Services PredictionsWhat to expect in the next one to two years
n TheenterpriseblockchainservicesmarketwilldoubletonearlyUS$1billionin2018-2019
n Universalawarenessofblockchainwillincrease,whichwouldmakeeasierforblockchainproviderstomakeearlystepsintocustomerecosystem.
n MoreFinancialServicesusecaseswillmoveintoproduction.ApotentialslowingofVCinvestmentandshakeoutofsomeofthelesssuitableusecases.FSusecaseswillstarttofocusaroundfewerlargeconsortia.
n Wewillseeexplosivegrowthinnon-BFSusecases,especiallyinsupplychain,manufacturing,healthcare,insurance,energyandutilities,andpublicsector.
n SeveralPOCswillmigrateintoproduction,thoughmovementtoproductionwillcontinuetobeverymeasured,scrutinized,andmonitored.Someofthebroaderconsortiaplayswillseethelightofdaywithtrialsintoindustry-widesolutionsandplatforms.
n We’llseefurtherclarityonstandardsandregulationsaswellaslegalpositionaroundsmartcontractsandconsensusmechanisms.
n IntegratedsolutionswillemergewithblockchainwovenwithAIandIoT.BlockchainwillstarttodrivetheIoTeconomywithsmartcontractswithminimalhumanintervention.
n Improvedregulatoryclarificationofhowblockchainsolutionsshouldbehandledthoughmaturitywillvarybygeographies.
n Moremainstreamcentralbankswillstarttoexploretheuseofdigitalcurrencies.
n Therewillbeasignificantgrowthindemandforblockchainengineers.
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Blockchain Services PredictionsWhat to expect in the next three to five years
n Servicesandproductsbasedonblockchainofferedbylargecompaniesorbigconsortiaonalargescale.
n Emergenceofblockchain-drivenecosystemsanddecentralizedautonomousentitiesthatcoulddisruptindustrialeconomicsincertainsectors.
n Asblockchainmatures,existingbusinessmodelswillgetdisrupted,initiallywithprivateblockchainsandover-timewithpublicblockchains.
n Platformconsolidationassomeplatformswillfadeawayandblockchainnetworksstarttobecomemoreinter-operable.
n ICOswillbecomeanalternativenotonlyforfinancingblockchainstartupsbutalsostartupsingeneral.
n Emergenceofindustry-specificconsortiumstostandardizeblockchaingovernance,platforms,etc.perbusinessareas.
n Mostsuccessfulstartupswillbeacquiredbylargecompanies.
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About HfS
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SaurabhGuptaisChiefStrategyOfficeratHfS.HeoverseesHfS’globalresearchfunctionmanagingtheglobalteamofanalystsacrossUS,Europe,andAsia-Pac.HeworkscloselywiththeCEOtosetthestrategicresearchfocusandagendaforHfSResearch,understandingandpredictingtheneedsoftheindustryandensuringthatHfSmaintainsitspositionasthestrongestimpactthoughtleaderforbusinessoperationsandservicesresearch.
Heisarecognizedthoughtleaderandpassionateproblemsolverintheglobalservicesindustry.With15+yearsofexperienceacrossclient,provider,advisory,andanalystroles,hebringsauniquelyrealisticandwide-rangingperspectivetoourindustry’schallengesandopportunities.BeforejoiningHfS,SaurabhledstrategyforGenpact’sCFOandtransformationservices,helpedshapetheBusinessProcessServices(BPS)strategyforAbbVie,managedEverestGroup’sglobalBPSpractice,andworkedasatechno-functionalconsultantatInfosys.
Saurabhadvisesseniorexecutivesonbusinesstransformationinitiativeswithastrategicmindsetandexecutionorientation.Hehasauthoredover125researchreports,isafrequentspeaker,andisregularlyquotedinindustrypublications.Heiswell-knownforspottingdisruptivetrendslikeAs-a- Service,Cloud,Analytics,Roboticsandpredictingtheirimplicationsfordifferentstakeholders.Hebringstothetableacombinationofsubjectmatterexpertiseandstructuredthinkingwitheffectivecollaborationandcommunications.SaurabhisaMechanicalEngineerfromDelhiCollegeofEngineeringandMBAfromIITBombay.
Saurabhcanbereachedatsaurabh.gupta@hfsresearch.com.FollowhimonTwitter@saurabh_24april.
Saurabh GuptaChiefStrategyOfficer,HfSResearch
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Tanmoy MondalKnowledgeAnalyst,Bangalore,India
Tanmoy Mondal isaKnowledgeAnalystatHfS Research,identifyingglobaltrendsinengineeringservicesfrombothindustry&technologyperspectives,trackingglobaloutsourcingdeals&investmentsincludingpartnershipagreements&R&Dannouncementsinthesectorandsupportingthedomainleadsinsecondaryresearch,dataanalysis,PoV’s andresearchwriting.
Tanmoy hasover4yearsofresearch,pre-salesandmarketintelligenceexperienceinTCS,HCLandTracxn.AthisTCSandHCLrole,heworkedonpreparingRFPresponsesincludingsolutionconstructandcommercialproposition.HewasresponsibleforanalyzingthebusinessscenarioforERPimplementationfordifferentindustryverticalsandparticipatedinseveralEnterpriseTransformationprojectsacrossdomainstooptimizetheITlandscape,increasingITintegrationamongclientbusinessverticals,improvingproductivityandreducingbusinessincidents.AtTracxn,hewaspartoftheemergingtechnologyteamthathelpedfindingcompanies(start-ups)specializinginupcomingtechnologies(virtual/augmentedreality,droneetc.)foracquisitionandportfolioinvestmentsforPEandVCfirms.
Tanmoy holdsaMaster’sinBusinessAdministrationfromIIFT(IndianInstituteofForeignTrade),andBachelorofEngineeringfromJadavpur University,Kolkata.
Tanmoy ispassionateaboutfootballandlovestoreadeconomicsrelatedbooksandarticles.
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The HfS Mission: Revolutionizing the Industry
HfS’missionistoprovidevisionaryinsightintothemajorinnovationsimpactingbusinessoperations:automation,artificialintelligence,blockchain,digitalbusinessmodelsandsmartanalytics.Wefocusonthefutureofoperationsacrosskeyindustries.Weinfluencethestrategiesofenterprisecustomerstodevelopoperationalbackbonestostaycompetitiveandpartnerwithcapableservicesproviders,technologysuppliers,andthirdpartyadvisors.
HfSisthechangingfaceoftheanalystindustrycombiningknowledgewithimpact:
• ThinkTankmodeltocollaboratewithenterprisecustomersandotherindustrystakeholders.• 3000enterprisecustomerinterviewsannuallyacrosstheGlobal2000.• Ahighlyexperiencedanalystteam.• Unrivalledindustrysummits.• ComprehensivedataproductsonthefutureofoperationsandITservicesacrossindustries.• Agrowingreadershipofoveronemillionannually.
"TheAs-a-ServiceEconomy"and"OneOffice™“arerevolutionizingtheindustry.