Mention the term blockchain and Web3 to CIO’s and there is an uneasy silence.
Even as blockchain and Web3 are beginning to find a higher degree of acceptance amongst common people, enterprises are still uncomfortable with a decentralized ledger system and the idea of Metaverse in their business areas. Enterprise CIO’s mention multiple barriers such as lack of scalable use cases, unclear return on investment, and regulatory ambiguity, which hinder their adoption.
When it comes to Blockchain in an enterprise, the rubber has not yet hit the road with regard to enterprises’ adoption. For example, onboarding for all new tools in enterprises is done via enterprise identity management systems based on emails, whereas the entry point of blockchains is a wallet.
“Onboarding onto blockchain creates friction for widespread adoption of Web3 systems by enterprisesWeb3,” points out Ankush Tiwari, co-founder zByte. Puerto Rico -based Zbyte wasfounded in 2021 by Nitin Kumar, Krish Kupathil, Ankush Tiwari, and Saurabh Radhakrishnan, recently raised $10 million in a funding round and is currently valued at $120 million.
To understand where Web3 is at present, one needs to go back to 2010-11. A similar story unfolded with the advent of the public cloud solution pitched to enterprises.
It was outrightly dismissed, and the reasons were similar to the arguments presently used against blockchain, i.e., enterprise inertia, lack of internal skills, inadequate trust, etc. “The operating reality was a lack of maturity within enterprises to embrace adoption, while the rest were just excuses,” avers Tiwari.
There is also a lack of a mature developer and systems integrator ecosystem to develop on public blockchains, which is a must to build, customize and maintain these solutions, creating additional barriers to scale. There is no doubt that enterprises require help with handling Web3 infrastructure.
“Multiple blockchain solutions require entities to procure these digital assets (cryptocurrencies) for building and deploying solutions on the public blockchain. Procurement departments are not skilled enough for this process,” states Tiwari.
CFOs are not comfortable managing these assets on their balance sheets and CIO’s dread the concept of having to deal with this kind of technology and volatility.
Not all Doom & Gloom
In many ways, this situation is not different from the initial days of the public cloud adoption by enterprises. “It took almost 5-6 years to become mainstream as the developer and tools ecosystem was not ready and mature,” says Tiwari.
Blockchain adoption within enterprises is a matter of time, not if but when. Calling enterprises laggards and describing them as not ready for Web3 is unfair, and an expectation for them to adopt innovative technology through a complete architecture or process overhaul is misguided.
The enterprise adoption challenge is compounded due to the small Web3 developer community being “born Web3” and only building for Web3, opines Tiwari. In many cases, it is missing the woods for the trees as this presents a large opportunity but suffers due to a lack of understanding of where and how enterprises can adopt this technology.
Suffice to say, enterprises need to invest in blockchain developer communities, and Web3 developers must enhance their enterprise acumen for tangible solutions of value to be created. Generating confidence within enterprises to embark on their Web3 journeys would drive growth for the entire blockchain ecosystem, ushering in new business models benefiting all the stakeholders.
Investors have a view that projects like these would accelerate use cases for Blockchain and drive true value.
• Enterprise identity connectors to Web3
• Enterprise system of record connectors to Web3
• Low code, no-code development tools for Web3
• SI and developer communities familiar with Web2 and Web3
• Remove the need for CFOs to handle crypto assets
• Performance and scalability improvements
• Hybrid blockchain use case development
• Security and interoperability