Crypto Media Bites on Gartner Data, Doesn’t Provide Perspective

Crypto Media Bites on Gartner Data, Doesn’t Provide Perspective

May 6, 2018

This morning we woke up reading about a “new” Gartner survey that demonstrates enterprise demand for blockchain is over-hyped. Crypto skeptics may eat up the headlines, but in reality enterprises continue to demonstrate strong and probably increasing interest in blockchain and distributed ledger technology.

About That Press Release

Today’s press release featured got attention because it said their is a “scarcity” of deployments and warned that the short-term benefits shouldn’t be overestimated. Gartner’s data is accurate but old. It was originally presented at an October 2017 event, meaning the actual survey was conducted earlier. The level of journalist scrutiny given to reporting on the survey brings to mind the frustrations that luminaries like Vitalik Buterin have had with crypto media outlets.

It is a signal that we’re in a “trough of disillusionment” that most of the articles focused on the percentage of enterprises not spending money on blockchain projects.

The nub of the stories is a Gartner chart based on the 2017 survey of over 3,000 CIOs. When presented with the category “blockchain and distributed ledger”, CIOs were asked, “What are your organization’s plans in terms of the following digital technologies and trends?”  The results were that:

  • 1% have invested or already deployed
  • 8% are in short-term planning or are actively experimenting
  • 14% are in medium or long-term planning
  • 43% are watching the technology but have no action planned
  • 34% have no interest

To be fair, blockchain does not match the adoption of a few other technologies, with 36% of CIOs saying they are using IoT or plan to do so in the short-term and 25% saying the same about artificial intelligence. However, most surveys about enterprise IT don’t even ask about about blockchain and most CIOs do not have a line item for blockchain in their budgets. In this context, blockchain’s success has been its ability to get on the radar of 64 percent of CIOs. In other words, almost two-thirds of CIOs are talking about blockchain even if they haven’t allocated money to buy a specific technology or development project.

Source: The 2017 SIM IT Issues and Trends Study, which reports on a large scale survey of CIOs and senior executives. It is one of many surveys CIO surveys that do not ask about blockchain at all.

Positive Outlook for Enterprise Adoption of Blockchain

Gartner dug into the data and gave a webinar in March 2018 that presented the same data in the press release. Although Research Director Rajesh Kandaswamy warns companies not to expect immediate results from the technology, he also advocates that in the long-term the business benefits will be significant.

Actual interest in blockchain is dramatic. In fact, the top search term for Gartner clients looking for advice is “blockchain”. Gartner is the largest IT analyst firm in the world and has thousands of enterprise professionals submitting inquiries about the projects they are working on. However, most of these customers are not CIOs. My 15 years experience conducting enterprise IT surveys have provided countless examples of significant disconnects between CIOs and the actual executives handling day-to-day operations and development. It is very possible that technologists that have been dabbling in cryptocurrency have also started experimenting with blockchain. At least in terms of software developers, this is common pattern — learn about a new technology and then test it out and see if they can find real world business use cases.

Another positive conclusion coming from the March webinar is that interest has expanded beyond financial services use cases. The chart below is based on a study of companies providing consulting services associated with blockchain. For now, many of these engagements often focus on education, but they may quickly turn into real projects being tested in the lab.

According to a recent Gartner webinar, in previous studies banking and financial services represented a majority of blockchain related consulting engagements. Now, a more diverse set of industries are paying for external expertise.

Last February Michael del Castillo explained why he thought enterprise blockchain was ready for a breakout:

The reason for that optimism, it turns out, is that even if the blockchains didn’t become real for businesses in 2017, they did become tangible in terms of technology. And now that the software has been built, those working close on development say live trials are just around the corner.

With 64% of organizations talking about blockchain and distributed ledgers, expect the technology continue rising in prominence. Thinking in terms of the classic technology adoption curve, the market has moved from the “Innovators” to the “Early Adopters” phase. Eight percent of enterprises are with short-term plans have successful experiences, then the market may actually “cross the chasm” and quickly gain mass adoption.

Feature image via Pixabay