SAP Sets Blockchain Course

    SAP by the middle of 2018 plans to make an instance of a blockchain database available based on an instance of the open source Hyperledger project that will be primarily employed across multiple community clouds hosted by SAP.

    SAP for now is providing access to a blockchain as a service offering via an early access program to both IT services providers and IT organizations such as Capgemini, Deloitte, GrainCorp, HCL Technologies, HERE Technologies, Moog Inc., Natura Cosméticos S.A., NetApp and PeerNova. Gil Perez, senior vice president for digital assets and the Internet of Things (IoT) at SAP, says the distributed ledger that SAP is making available on top of blockchain is part of the suite of IT services known as SAP Leonardo that SAP wraps around emerging technologies.

    Perez says SAP will next move to tie the SAP Ariba business-to-business purchasing network and SAP hybris e-commerce service to the SAP blockchain service via application programming interfaces (APIs) that SAP will define. The goal is not to replace existing general ledgers widely used in ERP applications, but rather augment them with a blockchain application that would be shared by a well-defined community of IT organizations that can commit to maintaining a specific level of service, says Perez.

    Based on the same core technology employed to drive digital currencies such as Bitcoin, the performance of a blockchain database is determined by the slowest system participating in a distributed transaction. Because of that issue, all the organizations participating in a distributed blockchain application will need to commit to a service level agreement (SLA) that guarantees a bare minimum of performance, says Perez.

    At this point, Perez says that the biggest issue is not so much the blockchain technology as much as the business models that will be flushed out around it. Perez notes that line of business executives are now participating in discussions about blockchain earlier than any other emerging technology in the company’s history.

    Long term, blockchain databases clearly have the potential to recast transaction relationships across entire vertical industries. The need for a trusted third-party to process transactions could be substantially reduced because all parties participating in a distributed blockchain application are sharing the same immutable database. Some organizations might even take advantage of that capability to move into adjacent business sectors that previously would not have been feasible. It might take years for those scenarios to play out. But it’s hard think of any emerging technology that has had more potential to disrupt so many industries than a blockchain database.


    Mike Vizard
    Michael Vizard is a seasoned IT journalist, with nearly 30 years of experience writing and editing about enterprise IT issues. He is a contributor to publications including Programmableweb, IT Business Edge, CIOinsight and UBM Tech. He formerly was editorial director for Ziff-Davis Enterprise, where he launched the company’s custom content division, and has also served as editor in chief for CRN and InfoWorld. He also has held editorial positions at PC Week, Computerworld and Digital Review.

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