Corporate America Wants the Amazon Version of Blockchain, Says Gartner

Businesses aren’t taking advantage of blockchain’s disruptive potential. Instead, they’re embracing the perhaps most mundane realization of the technology, says Gartner VP and analyst Avivah Litan.

According to notes for “Assessing the Optimal Blockchain Technology for Your Use Case,” research Gartner will publish in about two weeks that Litan sent to BREAKERMAG, 40 percent of the projects currently using permissioned blockchains will not end of taking advantage of blockchain’s unique aspects, like decentralization and tokenization, by 2021. Furthermore, projects now expected to use permissioned blockchains by 2021 will instead opt for centralized ledger alternatives—like Amazon Web Services’ Quantum Ledger Database, or AWS QLDB.

Though it’s still in preview mode and only has “a couple customers,” QLDB “sees how most are using blockchain technology, and what they want out of it is an immutable audit trail,” says Litan. “That’s where business is going in blockchain. Over 60 percent of use cases are just using the immutable data audit trails.” Amazon already uses QLDB internally. Like a blockchain, the product offers cryptographically verifiable data trails, but it is controlled by a central party (AWS), which makes it easier to scale and potentially easier to hack.

This is largely because business executives just don’t get blockchain. 

At Gartner, the belief is that technology like AWS QLDB will take “at least 20 percent” of distributed ledger technology use cases away from other vendors. But it’s not only Amazon that has the potential to get in on the distributed ledger game. Litan notes that other tech giants, like Google, could develop a similar hold over the DLT market. “It’s not in the spirit of blockchain,” she says, pointing to its centralization, “but what we’re finding out is the spirit of blockchain is not taking hold as much as this immutable data audit trail.”

This is largely because business executives just don’t get blockchain. Gartner receives “a lot of phone calls” from people who only want a basic understanding of the technology (Litan could not disclose the volume, but blockchain is “always” in Gartner’s top five portal search terms). CEOs will have seen articles about blockchain or heard that their competitors are using it, so they’ll call up Gartner and say, “Just tell me how it works and how I can use it.”

Ultimately, enterprises tend not to want to rely on blockchain’s trust-free use cases, finds Gartner. So those enterprises end up instead using permissioned blockchains that come with all kinds of rules for users. Meanwhile, they’re not taking advantage of smart contracts and tokenization—all they really want out of the ledger is the immutable data. Centralized services like AWS QLDB offer this, too, along with more scalability and less need for technical understanding of blockchain technology—an understanding many executives clearly don’t have yet.

Ultimately, Litan says inquiring enterprises “can’t think of use cases that really need blockchain.”