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The Services Research Company

HfS Blueprint Report:Enterprise Blockchain ServicesNovember 2017Excerpt for EY

Tanmoy MondalKnowledgeAnalystTanmoy.mondal@hfsresearch.com

SaurabhGuptaChiefStrategyOfficerSaurabh.gupta@hfsresearch.com

Authors:

Table of Contents

Topic Page

DefinitionalFrameworks 4

ExecutiveSummary 9

StateoftheEnterpriseBlockchainServicesMarket 12

ResearchMethodology 24

ServiceProviderAnalysis 27

ServiceProviderProfile 31

MarketPredictions 33

About HfS 36

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.

Definitional Frameworks

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

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

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

Fabric

Academia,regulators,andnot-forprofits

Illustrative,notcomprehensiveScopeofthisreport

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

Executive Summary

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.

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.

State of the Enterprise Blockchain Services Market

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

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

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

Adoption of blockchain is a global phenomenon

• Unlikemostothernewtechnologies,themoredevelopedwesterneconomiesarenotdominatingblockchainadoption

• WehavewitnessedalargenumberofinterestingusecasesinJapan,Australia,Nordics,ChinaandSouthEastAsia,andtheMiddleEastbeyondNorthAmerica,andWesternEurope

• Acrossgeographies,blockchainadoptionstartedwithfinancialservicesbutisnowexpandingtootherindustriesaswellasthepublicsector

AdoptionofEnterpriseBlockchainServicesbyGeographyRelativenumberofblockchaininitiatives

N=~50blockchainengagementsFS=FinancialServices

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

Ethereum accounts for nearly half of the enterprise use cases. Adoption of Hyperledger Fabric is expected to pick-up

Others

BigChainDB

Multichain

Quorum

Ripple

R3Corda

HyperledgerFabric

Ethereum

%serviceproviderswithexperience

%blockchainengagements

N=15serviceproviders N=52engagements

• Mostmaturewithprovensmartcontractframework;prevalentacrossindustryusecases

• Designedforenterprises;production-readyversionrecentlyreleased– adoptionexpectedtopick-up

• Prevalentinbankingindustry

• Prevalentforpaymentsusecases

• Enhancedspeedandsecurityfeatures

• Forasset-basedusecases

• IncludesBitcoin,Monax,Factom,IPFS,andStellar

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

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

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

Perform

CapgeminiCognizantEPAMHCLInfosysLTINTTDATAPWCTCS

tential TechMahindra

Virtusa

DXCLuxoftPersistentThoughtworks

Several financial services use cases such as payments, trade finance, and wallets are fairly advanced in terms of adoption

Blockchainuse-caseheatmapinfinancialservices

Thisisnotanexhaustivelistoffinancialservicesblockchainusecasesbutalistofmostfrequentlyreportedusecasesacrossthe20+serviceproviderscoveredinthereport

Payments/settlements

Tradefinance Wallets/KYC Trading Assetmanagement

Compliance Lending Auditing Investing/Transferpricing

Microfinance

HfSWinne

r'sCirc

Accenture

Deloitte

Perform

Capgemini

Cognizant

Infosys

NTTDATA

TechMahindra

Virtusa

Persistent

Thoughtworks

Blockchainuse-caseheatmapacrossindustries(excludingfinancialservices)

Thisisnotanexhaustivelistofnonfinancialservicesblockchainusecasesbutalistofmostfrequentlyreportedusecasesacrossthe20+serviceproviderscoveredinthereport

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

Accenture

Deloitte

Perform

Capgemini

Cognizant

Infosys

NTTDATA

tential TechMahindra

Virtusa

Persistent

Thoughtworks

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

HfS Blueprint Scoring: Enterprise Blockchain ServicesExecution 100%Marketcommitment

• Dedicatedblockchainpractice• Yearsofexperience• Talentheadcount

Clientbase• Numberofclients• Referenceableclients

Industrycoverage• Breadthofcoverage(numberof

industriescovered)• Depthofcoverage(maturityofservices

ineachindustry)

Usecasecoverage• Breadthofcoverage• Depthofcoverage

Experienceacrossblockchainvaluechain• Strategicadvisory• Prototypedevelopment• Productionbuild• Systemintegration

Innovation 100%Articulationofvalueproposition

• Voiceofthecustomer• Clarityanduniquenessofmessaging

Partnershipecosystemrobustness• Platformandsoftwareproviders• Start-upsandnicheproviders• Academiciansandlegalfirms• Consortiummemberships

Experienceacrossblockchainplatforms• Permissioned(private)• Permissionless (public)

Contributiontomarketdevelopment• Code-basesharing• Regulationsandstandards• Talentdevelopment• Othermarketchallenges

Intellectualpropertyinvestments• Platforms• Solutionaccelerators• PatentsandotherIP

AbilitytodriveadoptionbeyondPoCs 20%

Service Provider Analysis

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.

HfS Blueprint Grid: Enterprise Blockchain Services 2017

ExcerptforEY

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.

Service Provider Profile

Valuechaincoverage

MatureOfferings

Developing Capabilities

LimitedCapabilities

Yet toDevelopCapabilities

Industryandusecaseheatmap

Livein-productionclients

Pilotingwithclients

Explorationstage

LimitedExposure

HfS Winner’s CircleBlueprintLeadingHighlights

• Commitment• Robustclientbase• Referencibleclient• Broadindustrycoverage• Experienceacrossvaluechain• Abilitytodriveadoptionbeyond

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

Market Predictions

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.

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.

About HfS

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

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.

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.

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