The question is not “Public OR private?”: Enterprise reality requires a flexible public AND private context.
Old habits die hard. The enterprise sector has been traditionally used to closing themselves off, shielding every bit of information and focusing solely on achieving the organizational optimum. Some companies went to the extreme: Confectionery giant Mars Inc., for example, led even their contractors through factories blindfolded. Coca-Cola’s recipe is a legendary secret.
However, things are changing. Even the old giants are opening up. More open data exchange, ultimately leading to mass decentralization, is a part of it. In the always-connected, transparent world where information travels at the speed of light, the old way of doing things is not sustainable anymore. This new world comes with a whole other set of challenges: Which information is to be trusted? How do we shield against misinformation, false data, fake news, etc.?
New concepts are arising, such as co-opetition — where competing businesses are also cooperating. The game is no longer about optimizing one organization and its processes, it’s about adapting your organization for the optimum of the network (community) within which it operates. This, however, requires new levels of inter-connectivity and integrity among partners in such networks.
New Times Call for a New Approach
The winners in the new economy will not be the ones solely copying what had worked up until now. The future is even more complex and requires us to operate with a wider set of trusted information to deliver more value to customers. Enterprises need to work towards the network optimum, and decentralized, blockchain-based data exchange helps them get there.
However, it takes more than just setting your mind to it to make this happen. I was fortunate enough in recent years to work with several organizations – from different industries – that have started making bold steps in pursuing such a way of thinking. In many cases, though, companies are facing several inhibitors to transitioning towards the public context:
- Internal policies: Some enterprise/government environments are required to follow very strict policies regarding data storage, often as strict as the “on-premise” requirement.
- Regulatory framework: Certain information is prohibited from being exposed in a certain context by regulators directly. One such example is the European General Data Protection Regulation (GDPR), preventing certain datasets from being stored outside the EU.
- Sensitive information: There may be a business consideration regarding the sharing of data that pertains only to a small number of business partners (sometimes only two) and there is no business logic to putting it on a decentralized network.
It is due to a complex business reality that simplifying the debate about sharing data in a public or private context is not enough. As the World Economic Forum’s white paper suggests, it is important that the industry moves past the public-versus-private debate to one focused more keenly on deploying solutions where enterprise-specific requirements can be met. This requires a flexible way of providing integrity based data exchanges.
Blockchain-based systems should come in as an additional layer, avoiding the expensive rip-and-replace of existing IT and ERP systems. With implementations we should seek to connect legacy systems and create interoperability for data exchanges between them (for further reading on importance of standards see this GS1 yellow paper) with flexible levels of required integrity (from consortium exchange to high-integrity public networks).
The Private AND Public Reality
The business world is very rarely black and white and we already mentioned some of the hurdles companies face when it comes to publicly sharing their data, including internal policies, a regulatory framework, and information being too sensitive. Taking these inhibitors into account, there still are types of data that require the highest possible integrity in the business context, some of them include:
- Claims towards the wider public (any claim that a company needs to verify for their consumers or partners that are not (yet) connected to their network – such datasets should be shared in full on public networks);
- Metadata and publicly verifiable proofs (utilising public networks to keep proofs of privately kept data);
- Data for public use (open data requiring long-term integrity).
Following the initial argument, a single use case rarely falls within the fully-private or fully-public domain when we are talking about business applications from today’s perspective. On the contrary, enterprise use mostly needs a flexible combination, the best of both worlds. If we take a simple example of an exchange of goods between two parties, part of the data can be private (e.g. pricing information) while part of the data needs to have the utmost integrity (e.g. certification, traceability, and product quality information).
An additional layer of flexibility is also offered by encryption mechanisms where data sets can be protected even while they are shared in a higher-integrity context. Since no encryption is ever entirely secure, it again comes down to how much protection a given encryption can offer. As an example, companies might be willing to trade off higher exposure for higher integrity in case of a dataset that has limited-time importance (a lab test for a batch of products). On the flip side, it is highly unlikely that we will see personal data (citizen or healthcare data) ever shared on a DLT in full because of the very small possibility that an encryption might be broken sometime in the future. We cannot talk about encryption without mentioning the zero-knowledge encryption, which is a very perspective field for the future. Due to the novelty of the technology, it does face a longer adoption timeframe, as wider understanding needs to catch up and more testing needs to be performed.
Lastly, important point is put forward by John Wolpert who wrote about the dangerous belief that private networks are by default safe. Companies need to be made aware about the risk potential of different contexts. Educating and advising them on these topics is crucial as we seek to create tangible value with network applications.
Our Vision for the Decentralized Future
The future is not a revolution. Just as open-source software slowly became the reality and is now powering most of the world’s servers, decentralized technology is slowly but surely making its way to more reliable data flows around the globe.
Enterprises need to achieve seamless flexibility by helping them move more and more data towards the public environment, and getting them to experience the benefits of decentralization by increasing trust in their operations.
With the growing strength of public networks, their characteristics are becoming more obvious for beneficial business use. The adoption of collaborative data sharing enables businesses communities of the future to connect the dots and harness the power of interconnected, decentralized data.