IBM and Maersk shut down their signature enterprise blockchain project. What does that mean for supply chain collaboration?
TradeLens – an inspirational pioneer
When you’re a tiny little startup, and you see large enterprises applying new technologies to collaborative projects like TradeLens, you typically cheer. Despite what large organizations say about themselves, true innovation is typically confined to press releases — especially during a less-than-stellar economy. I was genuinely thrilled in 2018 when IBM and Maersk announced the commercial launch of TradeLens, taking an actual, real-life enterprise blockchain project to market. Watching them take the mantle of first-to-market, and seeing their efforts was a huge learning experience for us.
Over the next couple of years, press releases would come out saying something along the lines of “94 companies now use TradeLens” and then list enormous, recognizable brands from the logistics space. While I worried a tad, hoping IBM would leave some market space for “the rest of us,” I was happy about the idea that IBM could afford to show the world a real “what’s-it-good-for” use case for enterprise blockchain.
So consequently, the news this week that TradeLens shocked me. How much had the two companies invested in building and marketing TradeLens? For example, I’d heard that IBM had spent somewhere in the neighborhood of $140M launching their Food Trust platform. TradeLens was something I could point to and say, “look what these two companies are doing! it proves there’s a There there — and that customers want transparency!”
Education is everything
The collapse of this product shows that, even with huge brands spending millions to launch a new technology product, a well-known product can fail. When I was trying to communicate the value of enterprise blockchain to conference attendees back in 2016-2018, it was always a challenge. People want to know about “this new thing” – but not if it takes a lot of concentrated effort to understand. Even with my simplest, most direct language, full of analogies, I’d see eyes glaze over across the table after a very short amount of time.
With that reality, it’s tough to help people understand the shiny new object, and how it will help them hit their KPIs. Hearing about the TradeLens bust, it raises a number of questions:
- Was it just too difficult to explain blockchain technology and its benefits?
- Was there enough sales enablement and sales support happening within both companies?
- Did prospective customers conflate blockchain with crypto, and run screaming? (something I saw a lot back in 2019)
- Were CIOs expected to open a “crypto port” in their firewalls – a non-starter for most CISPs?
- Did the internal product team at IBM simply not have enough management buy-in to support keeping the product running?
Politics, cut-backs and shareholder returns always drive large-enterprise decision-making, particularly during a downturn. I saw this play out at Xerox and other large brands. Management teams killed off research and new products in their infancy in order to squeeze every “questionable” penny from the budget. It’s a bummer, but it happens.
Where do we go from here?
So what does this bode for logistics? Clearly the need for data interoperability hasn’t gone away. If anything, the pandemic and resulting supply chain chaos showed the world we need more inter-partner data sharing. It just doesn’t need to be in a distributed ledger.
Rotem Hershko, Maersk’s head of business platforms, stated, “TradeLens has not reached the level of commercial viability necessary to continue work and meet the financial expectations as an independent business,” and that “the need for full global industry collaboration has not been achieved.” That said, the industry needs better collaboration, and will eventually come to fruition.
In a noisy, distracted world, filled with distrust and suspicion, transparency smoothes over the bumps of working together. While IBM/Maersk may have been too early, there’s still a need for shared data within logistics consortiums.