Connections

In another example of IBM’s efforts to expand its initiatives around blockchain record-keeping technology, the company said July 14 that it launched cloud services to be used by organizations requiring a secure environment for blockchain networks. The IBM cloud environment allows clients to test and run blockchain projects that handle private data, and is in limited beta testing now, IBM said.

Blockchain, the key technology used to enable the Bitcoin digital payment system, is a database, made up of data structure blocks, that stores a huge amount of data records. In the case of Bitcoin, a blockchain keeps track of all digital payments that are made.

IBM’s new cloud services should be especially appealing for organizations in regulated industries, such as Everledger, a company that tracks and protects diamonds and other valuables via the blockchain, IBM said in a news release. Everledger is building a digital business network using IBM Blockchain to power its global certification system to track valuable items through the supply chain, helping to protect suppliers, buyers and shippers against theft, counterfeiting and other forms of corruption, IBM said. IBM Blockchain “accelerated our ability to move fast and deliver the most innovative solutions to our partners internationally and confidentially,” Everledger CEO Leanne Kemp said in the news release.

IBM’s secure blockchain cloud environment is based on IBM LinuxONE, which the company said is “the industry’s most secure Linux-only server.” As blockchain “grows in influence and organizations begin to evaluate cloud-based production environments for their first blockchain projects, they are exploring ways to maximize the security and compliance of the technology for business-critical applications,” IBM said. LinuxONE’s advanced features help protect data and “ensure the integrity of the overall network,” it said. LinuxONE was “designed to meet the stringent security requirements of the financial, health care and government sectors,” it said.

Pointing to the increased problem of data breaches, IBM said the average total cost of a data breach for enterprises hit $4 million last year as security incidents jumped 64%.

IBM first announced its intent to explore blockchain in August 2015 with a Smarter Planet blog titled “Blockchain: It really is a big deal” by Arvind Krishna. The company said recently that it plans to open the Blockchain Innovation Center in Singapore. It already has four IBM Bluemix Garages with a focus on blockchain in New York, London, Singapore and Tokyo that were announced and opened in the second quarter of 2016.

The “value” that can be provided to clients through IBM services including blockchain stand to help boost profitability in its cloud business, Robert LeBlanc, SVP of IBM Cloud, said at the Bank of America Merrill Lynch Global Technology Conference in San Francisco June 1. “As you move up the value chain … the more value you provide to clients, the more they’re willing to pay for that value and the better the margins and the profitability of the business is,” he said. “The infrastructure is very much required” to grow the cloud business and “it’s the value and the set of services you can build on top — like Cognitive and [Internet of Things] and blockchain and others — that that really start to bring the value to the client.

“That’s where a lot of clients are willing to invest because they know that that’s where ultimately they need to get to.” Blockchain and those other value services are “what’s going to drive utilization of the cloud, and that’s kind of universal — we see that around the world.”