As IoT adoption grows in major industry, consumer, and government sectors, IDC expects that by 2019, 20% of all IoT deployments will have basic levels of blockchain services enabled. However, to support this, regulation and compliance mechanisms governing blockchain services will be drafted in response to data and privacy breaches in healthcare, retail, supply chain, and energy management IoT solutions.
There has been significant interest in the opportunities creating by connecting parts of the business across IoT-enabled networks. The data flow and resulting growth in information (and thus decision making) is now established as a means of improving agility and responsiveness, moving enterprises toward the nirvana of personalised engagement with their customers.
Unfortunately, this abundance of information and the opportunity for information to be exposed has identified large-scale vulnerabilities for IT and lines of business that support an IoT solution. The deployment of IoT solutions has been challenged by both the physical and cybersecurity requirements of IoT devices and the data generated from them.
Blockchain solutions have been tested in the financial services industry with a high degree of success, and now, the underpinnings of blockchain are being tested with IoT deployments. In addition, blockchain based distributed ledger solutions are coming to market independent of cryptocurrency applications. Use cases around health care, supply chain management and asset tracking and provenance have been identified and are being deployed today.
Overall, while there has been a lot of focus on securing enterprise data illegal use, safeguarding IoT transactions (the transfer of economic and social wealth) is increasingly becoming an issue for IT departments and enterprise chief security officers. Since IoT solutions will overlay workflow processes, the conversion of existing methods and processes the govern the exchange of value will increasingly drive deeper digital transformation efforts within enterprises.
As a result, IT will have to address the challenges of applications, systems, and network latency to enable blockchain processing loads across IoT scale data streams all implemented across a distributed computing infrastructure. Finally, blockchain solutions for an IoT environment will heighten IT’s need to update and maintain robust systems of record (SORs).
Blockchain becomes another element of the digitally transformed enterprise, following recognition of the importance of data as a key organizational asset. In moving ahead, partnering with experienced and capable vendors who can navigate the dynamic market scape of emerging blockchain solutions will be essential.
In addition, enterprises will need to negotiate relationships with partners, suppliers and customer secure their willingness to opt in to the distributed ledger model required for an effective blockchain solution. As part of the whole effort around ensuring the security and trustworthiness of IoT data, use vulnerability services to identify data and transaction leakages and adjust processes and systems to minimize their vulnerability.
Written by Hugh Ujhazy, associate vice president of IOT & Telecoms at IDC | Originally published on LinkedIn