IBM Blockchain targets SMEs with launch of tiered ‘pay-as-you-grow’ model

Quick Take

  • IBM has launched Version 2.0 of its core blockchain platform, which it will sell in tiered price plans 
  • The idea is to lower the barrier to entry for companies dabbling with blockchain, hinting the firm has seen lower demand than expected for its advanced offering
  • The IBM Blockchain Platform will also now integrate with other blockchains in a “multicloud architecture”

IBM has launched “Version 2” of its enterprise-blockchain platform, but beneath the technical innovations lies a much-changed pricing model.

Until now, IBM offered a single “high value” blockchain service to enterprises at a premium rate. But this has been replaced with a “pay as you grow model,” meaning companies will be to access more basic tools appropriate to their size and business model. It also suggests most major enterprises are nowhere near full-scale adoption.

Jerry Cuomo, VP of IBM Blockchain Technology, penned a blog announcing the “next-gen” upgrade, briefly nodding to the pricing changes, writing: “The platform features a new pricing model that allows you to start small and pay as you grow, pay for only what you need, and maintain full control over total cost of network ownership.” 

In an interview with The Block, Cuomo said in retrospect, trying to sell high-end technology before it proving its abilities may have been premature.

“Paying upfront before you’ve proven the success of the project has never been widely accepted. There’s a more established practice where. when you’re exploring, the price is lower. And when its ready to go into production, and you’ve shown you can provide value, it [the price] goes up,” Cuomo said.

“Not everyone was ready for that,” he added, confirming that the entry-point will now be much lower and there is now support for starting small. “We are meeting them where they are rather than making them coming to it.”

Theoretically, the shift dramatically increases IBM’s target audience, encompassing small and medium-sized enterprises (SMEs) rather than just major corporations – who have been slow to reach for their wallets.

IBM has a multi-pronged blockchain division, employing around 1,600 people globally and counting; the biggest among its tech peers. Its star solution, currently under trial, is the IBM Food Trust Network, which aims to foster transparency in the food industry by documenting the supply chain via a blockchain. Meanwhile, the tech division that Jerry Cuomo leads offers enterprises the blockchain software itself (built upon the Hyperledger Fabric platform) so they don’t have to develop their own.

Now, IBM’s blockchain software and its corresponding services will be broken up into distinct services rather than a complete package. Those services will include governance or privacy-focused offerings. Vertrax, a supply chain management solutions provider in the oil and gas industry, will be the first client of Version 2.

The other noteworthy change for Big Blue’s Blockchain Platform is the addition of “multicloud architecture.” Its distributed ledger can be deployed to public clouds like Amazon’s AWS and Microsoft’s Azure, or in private clouds, and it now offers a range of support for multiple smart contracts languages including JavaScript, Java, and Go. The blog summarised it was now a “fully-flexible blockchain platform,” highlighting the need to remove the complexity that came with having multiple cloud vendors.

The move follows in the same footsteps as Digital Asset, which yesterday revealed it was making its smart contract language compatible with enterprise blockchain-maker giants Hyperledger Fabric and R3 Corda.