SAN FRANCISCO — Microsoft (MSFT) believes 2018 will be the year when blockchain finally goes mainstream.
Mark Russinovich, chief technology officer for the software giant’s Azure cloud platform, said a whole range of industries are on the cusp of introducing the electronic ledger technology behind cryptocurrencies like Bitcoin.
“People have been saying for the last couple of years it will be the year of production blockchain for enterprises, and I think this year we’re actually starting to see them go into production,” he told IBD at the Yahoo Finance All Markets Summit: Crypto.
Blockchain stores information chronologically in “blocks” to allow for the efficient and nearly instantaneous processing and transfer of data. According to Russinovich, just about every enterprise will be using it in one way or another in the years to come.
“I think this is the beginning of the point where now these technologies are becoming mainstream enough, people understand it enough, that they can begin to deploy it,” he said. “I expect this to grow pretty rapidly in the next couple of years.”
Benefits Of Blockchain
He sees the key benefits for businesses as being the reduction in the chance of fraud (as the technology is extremely difficult to hack), the reduction of waste and the elimination of middlemen.
The executive said his firm has been working with “dozens of companies”to develop usable applications for blockchain, including Wall Street giants such as Bank of America (BAC) and JPMorgan Chase (JPM). The company has now rolled out tools to simplify the process of deploying the technology for customers.
And he highlighted two companies that have been making great strides in blockchain: industrial conglomerate 3M (MMM) and Australian travel firm Webjet.
“3M are doing it to track the provenance of pharmaceuticals, to make sure that when a customer gets it they can verify it came from a reputable source. There’s so much fraud in the pharmaceutical industry,” Russinovich said during a speech at the Yahoo Finance event.
Blockchain offered Webjet a way to streamline a typically cumbersome process. The firm found that during a single transaction, like a hotel room going to an end user, five smaller transactions are involved. And that is only the beginning of the problems.
“They found that roughly 1 in 10 of those transactions require some kind of manual intervention because of a problem along the way. In roughly 1 in 25, someone on that chain doesn’t get paid. So there’s a lot of loss, and there is also a lot of fraud,” Russinovich said. “They’ve turned to operationalizing blockchain on top of an Ethereum platform on Azure and created a network called Reschain. It’s a reservation blockchain network that they say reduces, for their internal properties, the level of intervention by over 90%.”
Microsoft’s Blockchain Products
Microsoft has two key products for the deployment of blockchain at the enterprise level. The first is the Workbench platform, which provides an interface that allows business users to construct solutions that suit their needs. It provides prebuilt networks and infrastructure.
The second product is the Coco Framework, which allows companies to use blockchain while keeping their data private. This is important, as it allows companies to retain the confidentiality of their dealings with various suppliers and customers.
Russinovich believes Microsoft is leading the way on blockchain over cloud space rivals such as Amazon.com (AMZN), and he said customers have provided encouraging feedback on their offerings.
“Response has been great. It’s been really resonating because this is exactly what they have been looking for,” he said. “It’s Software-as-a-Service basically. A whole new level of abstraction and ease of use.”
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