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Decentralised Futures

A clean break from the past

Business leaders who are fed up with the disappointing results from traditional approaches to IT will welcome decentralisation and its alternative way of working.

Decentralisation is an opportunity to take advantage of the collective power of disruption and to create new business models across the industrial value chain.

At the simplest level, decentralisation is a clean break from the traditional mode of technological development, where power resides with a central authority. In a decentralised architecture, it is difficult – if not impossible – to discern a central authority that governs the technology.Please allow statistical cookies to see this Youtube embed

The most well-known example of decentralisation is blockchain, where records are stored in a distributed ledger, with no central authority. Many business leaders are wary of the hysteria of blockchain, yet decentralisation is much more than a one-time technology hype.

Rather than being viewed as a standalone technology, the decentralised future should be treated as a combined and powerful evolution of distributed technology that will manifest through cloud, applications, security and open-source practices.

Decentralisation matters to decision makers because it offers an alternative development platform from which new business models can be created, honed and perfected without the need for trusted intermediaries to validate transactions.

Splitting up with old partners

The end goal of decentralisation is the creation of a Portable Enterprise. Rather than a traditional business, that is often confined in its operational areas, the Portable Enterprise has the agility to interoperate in a range of business and technology ecosystems, leading to new marketplaces and revenue streams.

That freedom to shape-shift is crucial at a time of constant change, where businesses are fighting to keep a tight reign over cashflow and costs. IT stacks are still way too complex. Among Fortune 100 companies, enterprise spending on IT operations is at about 85%, of which 90% is dedicated to reducing IT complexity.

Vendor lock-in is a big issue, too. While the cloud promises a new way of managing IT spend, it has also created a new series of dependencies on Big Tech. At the same time, the legacy systems that enterprises rely upon are non-scalable – if organisations are going to be able to shape-shift and grow, then they need agile technology solutions.

Decentralisation is an opportunity for businesses to achieve their growth objectives. This platform-based and ecosystem-driven approach is a break from traditional Big Tech IT and a way to reduce costs, minimise security risks and avoid vendor lock-in.

Building new relationships

This decentralised way of operating is not a pipedream – the end goal of a Portable Enterprise is moving closer. The trust-enabling technologies that enable decentralised technology – known as the consensus mechanism – have been subject to intense computer science research over the past few years.

This research has improved the performance, scalability and power consumption of decentralised technology. Developments in a number of key technological areas will be crucial to decentralisation becoming manifest, including:

  • DApps: Developing consensus for decentralised applications (DApps) and smart contracts
  • Data and Security: New approaches to organising, securing and controlling data, and moving towards data-centricity through D-Web, where users keep control of their own data
  • Decentralised Cloud: Solving data and complexity concerns through new protocols that help to break the reliance on legacy IT
  • Open-Source Enterprise: Adopting open-source culture and best practices; collaborating with open-source communities.

The very nature of this technological evolution – bottom-up, decentralised and a move away from the traditional mode of development – means many organisations and their executives might have been slow to notice that a change is happening. Yet the change is real, and every sector can expect to transform itself towards a decentralised future.

Falling in love with decentralisation

There are already real-world examples of decentralisation having an impact: insurance firms are automating claim and underwriting processes with smart contracts; life-science firms are sharing medical records to speed up clinical testing and drug detection; utilities firms are partaking in real-time energy trading, especially for renewable electricity; and open banking is allowing new firms to enter and disrupt traditional finance markets.

Your industry could be next. We believe that the collective maturity of distributed ledger technology, cloud, data and security mean no business leader can ignore both the threat and the opportunities that decentralisation affords. Now is the time to act.

First, look outward – aim to develop new business models that cross sector boundaries. Second, leverage open-architecture models to orchestrate new services that link to decentralised networks and protocols. Third, continue to explore distributed-ledger opportunities at scale. Fourth, look to capitalise on disruptions around open source and connectivity. Finally, set up and operationalise a dedicated business squad to explore new ideas.

Embracing decentralisation will not be straightforward. Long-established habits are tough to break. However, business leaders must look to break the cycle of legacy modernisation, embrace a broader ecosystem of partners and transform their workplaces, so employees can develop niche skillsets and use open-source technologies.

For enterprises that embrace decentralisation, the business benefits are great. Decentralisation – with its platform-based and ecosystem-driven approach – offers a route to technology-enabled business transformation.