Global spending on blockchain solutions is expected to reach $2.1 billion (Rs 13,350 crore) in 2018, more than double of the $945 million spent in 2017, a new report from market research firm International Data Corporation (IDC) shows.
"Interest and investment in blockchain and distributed ledger technology (DLT) is accelerating as enterprises aggregate data into secure, sequential, and immutable blockchain ledgers, transforming their businesses and operations," said Bill Fearnley, Jr, research director, worldwide blockchain strategies, IDC.
He added, "Many technology vendors and service providers are collaborating and working with consortiums such as the Enterprise Ethereum Alliance and the Hyperledger Projects to develop innovative solutions that improve processes such as post-trade processing, tracking and tracing shipments in the supply chain, and transaction records for auditing and compliance. Also, multiple regulators and central banks have made positive comments about blockchain and DLT and this will help to accelerate demand in regulated industries such as financial services and healthcare."
According to the report, the US will see the largest blockchain investments and deliver more than 40% of worldwide spending throughout the forecast. "Western Europe will be the next largest region for blockchain spending, followed by China and the Asia-Pacific region excluding Japan and China (APeJC). All nine regions covered in the guide will see phenomenal spending growth over the 2016-2021 forecast period, with Latin America and Japan leading the way in terms of compound annual growth rates (CAGRs) of 152.5% and 127.3%, respectively," the report said.
Stacey Soohoo, research manager, customer insights and analysis at IDC, said 2017 was the year of experimentation as enterprises realised both the benefits and challenges of blockchain. "The year 2018 will be a crucial stage for enterprises as they make a huge leap from proof-of-concept projects to full blockchain deployments. As a leader in blockchain innovation and integration, the US will continue to invest in blockchain throughout the forecast, spending heavily in financial services, manufacturing, and other industries," Soohoo added.
The report also showed that blockchain spending will be led by the financial sector ($754 million in 2018), driven largely by rapid adoption in the banking industry. The distribution and services sector ($510 million in 2018) will see strong investments from the retail and professional services industries while the manufacturing and resources sector ($448 million in 2018) will be driven by the discrete and process manufacturing industries, it showed.
"In the US, the distribution and services sector will see the largest blockchain investments. The financial services sector will be the leading driver in Western Europe, China, and APeJC. The industries that will see the fastest growth in blockchain spending will be professional services (85.8% CAGR), discrete manufacturing (84.3% CAGR), and the resource industries (83.9% CAGR)," the report said.
"Cross-border payments & settlements will be the use case that sees the largest spending in 2018 ($242 million), followed by lot/lineage provenance ($202 million) and trade finance & post-trade/transaction settlements ($199 million)," the report said.
From a technology perspective, the report showed that information-technology services and business services (combined) will account for roughly 75% of all blockchain spending for the period.