Oracle apps make blockchain easier, but consortium challenges remain

Bang on trend and with no shortage of afficiandoes; micro-brewery-made, artisinal beer proved a fitting use case for blockchain technology at Oracle OpenWorld last week. Alpha Acid Brewing in Belmont, California was showcased as an early adopter of one of Oracle's new blockchain based applications, Intelligent Track and Trace.

George Nott Oct 30th 2018

Bang on trend and with no shortage of afficiandoes; micro-brewery-made, artisinal beer proved a fitting use case for blockchain technology at Oracle OpenWorld last week. Alpha Acid Brewing in Belmont, California was showcased as an early adopter of one of Oracle's new blockchain based applications, Intelligent Track and Trace.

“We can now track materials and premium ingredients from our suppliers and analyse sensor data from the production process for each batch," said Kyle Bozicevic, owner and brewer at Alpha Acid, which served up thousands of (free) cups of its beer range across the three day event.

"[The] application helps ensure that we are getting the highest quality hops, malt, and yeast, and enables us to create a strong narrative around our products for customers,” he added.

Big Red is hoping it will find an equally thirsty audience for the four supply chain focused blockchain applications it will make available through next year; Intelligent Track and Trace, Lot Lineage and Provenance, Intelligent Cold Chain and Warranty and Usage Tracking.

The use-case-specific SaaS applications are built on Oracle's Blockchain Cloud Service launched earlier this year (itself based on Linux Foundation's open source Hyperledger Fabric platform) and connect with its Supply Chain Management (SCM) Cloud, Enterprise Resource Management (ERP) Cloud and other applications.

"Typically when you think about the blockchain it's about distributed ledger, it's about digital signatures, it's about smart contracts; but really the value proposition associated with blockchain is here," said Rick Jewell, senior vice president, supply chain and manufacturing cloud applications, Oracle, at OpenWorld's supply chain keynote.

Jewell pointed to a word cloud on a slide featuring phrases like: 'reduce delays and inefficiencies', 'dispute resolution', 'proof of delivery' and 'expedite payments'.

"Just as we did with IoT – we didn't stop with the IoT platform, we built IoT applications, we've done the same thing here. We have built form-fit blockchain applications that work on top of that," he added.

The apps will make getting started with blockchain much easier for a business, but there are still significant challenges for them to overcome in taking the technology beyond proof-of-concept; chiefly, all the other businesses they work with.

As Gartner supply chain technology research director Amber Salley explained: "The apps will be as useful as there is an ecosystem committed to using blockchain."

Consortium challenges

Alpha Acid is one of a number of early-adopters to get early access to the applications. Others named include Arab Jordan Investment Bank, CargoSmart, Certified Origins, Indian Oil, Intelipost, MTO, Neurosoft, Nigeria Customs, Sofbang, Solar Site Design and TradeFin.

CargoSmart is a shipment management software solutions provider in APAC, and begun its blockchain initiative for shipment documentation in July.

Since shipping document handling processes are complex, feature dated paper processes and involve many stakeholders across numerous countries, it is an ideal use case for blockchain CargoSmart CEO Steve Siu told Computerworld.

"We consider blockchain as the digital baseline for the next generation," Siu said.

"Blockchain is something different – which is to come together to share that information in the first place then think about how the industry would take advantage of that to change the processes, to change the way they work together," he added.

Getting all the stakeholders on to the blockchain will be a considerable challenge however.

Shipping companies have diverse technical capabilities and data standards, and currently exchange documents in many formats including email, online forms, and electronic data interchange (EDI). On average, a single shipment can involve more than 30 documents exchanged by all parties, often with multiple revisions due to human errors, before it leaves port.

These existing processes are not standardised, despite numerous attempts to do so, but would need to be if blockchain is to be used.

"To drive the industry to change is actually very difficult. That's why we took this consortium approach, to get the industry together," Siu added.

The sentiment was echoed by Certified Origin CIO Andrea Biagianti. His company has been using a blockchain application to trace key steps in the supply chain from Italian olive groves to the Bellucci-brand bottled extra virgin olive oil sold in North America.

"We think that the hardest step at the beginning is to build a best practice for all the actors in the supply chain. It is difficult for them to know that they have to work all together with one final scope," he told Computerworld.

Committed ecosystem?

The requirement to get multiple stakeholders behind a single blockchain solution, could be a limiting factor in the apps' success, Gartner's Salley explained.

"Since it is a chain there needs to be multiple parties involved to add ‘links’ to the change. That means that the multiple parties will need to have invested in the systems and processes to make it work," she s

Despite the distributed, multi-stakeholder nature of the technology, Oracle will charge just one party, the "top node", for using the apps and the cost is not based on the number of users on the chain.

"We do not intend on charging based on users, but we intend on charging for the platform itself," Oracle's executive vice president, applications product development, Steve Miranda told media.

"And the platform – think of it as the hub – whether that hub is purchased by a single node in the supply chain, the top node, or if that gets purchased by the collective sets of nodes… but because of the nature of the application and the distributed nature of the application, charging on a per user basis like that is counter to the way we expect it to be used. We want it to be used more pervasively not less pervasively," he said.

Above a certain scale however, Miranda indicated that additional costs could kick in.

"The scale will likely have some sort of transaction charge on top of that but that depends on the blockchain use case," he explained.

The apps will be interoperable with other blockchain providers with HyperLedger based solutions such as SAP and IBM, Oracle said.

Gartner research into supply-chain-focused blockchain solutions has found the market to be "uncertain, confusing and overly hyped", while many proposed use cases "may not even need blockchain in the first place".

A September report from the analyst firm said that a lack of data and governance standards across broad ecosystems of trading partners "will inhibit multi-enterprise collaboration, therefore stalling pilots and diminishing wide adoption".

Until 2021, 90 per cent of supply chain blockchain initiatives will be proof-of-concepts (such as Commonwealth Bank of Australia's recent almond shipping experiment) and onboarding challenges will halt 90 per cent of the initiatives across medium to large-scale enterprises, Gartner predicts.

"Blockchain in supply chain is a technology looking for a use case. I think the apps are Oracle’s attempt to create that use case. It is hard to sell blockchain as a platform so by productising it as an app gives a business a starting point to get using blockchain," Salley said.

Intelligent Track and Trace will be available in the first quarter of next year, with the other apps following through the rest of 2019.