IBM bets on blockchain to leverage cloud revenue

Dive Brief:

Blockchain infrastructure helps propel the adoption of other cloud services, with IBM seeing "exponential client spend" on cloud services, beyond the cost of infrastructure implementation, Jerry Cuomo, VP of blockchain technologies at IBM Blockchain, told CIO Dive.
Similar to internet of things and artificial intelligence, enterprise-grade blockchain applications catalyze "a new style of application that really invigorates cloud services," Cuomo said. The need for a diverse universe of components in a blockchain deployment makes the technology prime for adoption in hybrid cloud environments, he said.
IBM has seen traction in spaces such as food traceability, healthcare, mining, supply chain and financial services, the company told CIO Dive in an email.

Dive Insight:

Industry watchers say blockchain adoption in the enterprise is in its infancy. IBM's got time — and resources — to watch it evolve and deliver more workloads to its cloud.

Since 2018, IBM has tripled its blockchain patents each year, and has a workforce of 2,000 blockchain experts focused on development and implementation, the company told CIO Dive. Citing customers the size of Ford, Maersk and the U.S. Food and Drug Administration, IBM's strategy hinges on luring more customers to its cloud platform.

IBM has worked to make inroads in advanced technologies such as quantum computing — unveiling the IBM Q System One last year — and blockchain. But the enterprise cloud market, led by Amazon Web Services, has remained elusive.

In the broader cloud market, IBM is a niche player, according to Gartner stats. In 2018 it landed in last place among the top five providers, with 1.8% of market share. IBM trails its closest competitor, Google Cloud, which sits at 4%.

In 2018, artificial intelligence, cloud and blockchain projects helped IBM emerge from a 22-quarter revenue growth crater. In January, IBM announced a succession plan for CEO Ginni Rometty, who led the company through a computing evolution. The company's choice of a cloud executive as CEO highlights IBM's shift to focus on the technology. Arvind Krishna, who will become CEO on April 6, currently serves as SVP for cloud and cognitive software.