Bulletin Mobile Devices - Blockchain and how it will change everything - How to break the habits that Kill Service Innovation Dr Nigel Martin
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Bulletin
FEB EDITION
Mobile Devices 2016
Conquer Companies
How to break the habits that
Kill Service Innovation
Dr Nigel Martin
Blockchain and how it will change everything
itSMF Bulletin—February 2016
Alan Hollensen
CEO, itSMF Australia
Hello everyone,
3 A Word from the Chairman We took another step on the path to a viable Regional Seminar
Program this month with the second of our Geelong seminars and the
3 AXELOS Professional Development Program first of four we have scheduled there for this year. I regard this as one of
our more exciting developments and the plan is to steadily build both
the numbers of these events and their profile in those states with large
4 itSMF Feature: enough Service Management communities in either regional areas or
Mobile devices conquer companies non-metro ones to support them.
10 Geelong Regional Seminar Q1 Kathryn Howard, our Vice Chair with a special interest in the State
Branches, and myself are already investigating options in NSW and
11 itSMF Feature: I have reached out to the NSW Committee on this issue as well.
Blockchain and how it will change everything Interestingly, there seems to be something of an untapped market out
there for these given I was approached at the Geelong session by
15 2016 itSMF Q1 Seminar Snippets someone who wants a Seminar to be staged in another reginal centre
here in Victoria.
16 SHAKE I.T. UP
One of the more pleasing results of our Conference last year was what
Service Management Conference 2016 amounted to a strong sense of renewal and nowhere is this in greater
evidence than the response by sponsors and supporters for the event
18 Service Management Conference 2016 planned this year in Brisbane.
Keynote Speakers
Our good friends as AXIOS were first out of the blocks, having come on
board as a Gold Sponsor, signed, sealed and delivered, before we went
20 itSMF Corporate Member Directory on our Christmas break. Personally I’d like to extend a huge ‘Thank you’
to the team at AXIOS for this demonstration of their faith in us.
As it turns out, they are not alone with Alemba now signed up too. And
we are also excited to be able to inform you that two new sponsors
have come on board in Matrix42 and Kepner Tregoe with more in the
pipeline.
These are exciting times for our signature event which remains one of
the best Service Management conferences in the world.
In this edition of the magazine you will find links to the White Paper
library of the van Haren Publishing company, rightly regarded as being
at the absolute forefront of publishing in our industry. These papers are
accessible completely free of any charge or obligation – just follow the
link, or jump on to our website where it is now a permanent feature of
the Home Page.
You will also find here further information from our partners at AXELOS
about significant discounts to their Professional Development Program
and how to avail yourself of this offer. I’d recommend that you check
out both of these when you have the opportunity, but keep in mind the
AXELOS offer has a cut-off point, although a discount for itSMF
members of the Australian Chapter will always be available.
2 itSMF Bulletin—February 2016
A Word from the Chairman
Dear Members, Partner of our National Conference once more. We hope to extend the
partnership to give our members a platform to contribute their thought
We have started this year very well and I am excited to share a number leadership on the international stage.
of developments with you.
Lastly, we have extended our fantastic seminar program and on the
As we announced earlier this month, itSMF Australia have joined the 11th of February we held our 2nd regional event in the Victorian city of
itSMF International Axelos partnership program offering you Geelong with another three planned there this year. With the support of
substantially reduced charge to access the AXELOS Professional Deakin University, who provided a spectacular venue, and in
Development Program. I think this exciting partnership holds great cooperation with a local ICT group the Geelong Seminar gives us a tem-
promise for you as a Member, but it is also a testament to the good plate for expanding this wonderful program into regions where we
work being done by the International Board. Our own past Chair, have never been active – essentially out of the CBD of the capital cities.
Kathryn Heaton the ItSMF International Deputy Chairman and current We would love to support your local events, so please contact Alan in
itSMFA Board member has been a significant driver of this initiative the national office if you would like to start a regional event in your
and deserves our congratulations for her excellent work bringing more state.
value to our members globally.
There will be more to report over the coming year about these
Your local board has also negotiated a significant new member benefit regional Seminars, but for the moment I would like to extend my appre-
with access to the remarkable library of White Papers stored on the van ciation for the good work done by our member volunteers in getting
Haren Publishing website. Access to these documents is just a click this off the ground – as I would to all of our volunteer crew who work so
away on the itSMF Homepage. hard and selflessly to keep the organisation at the forefront of Service
Management.
Ivo van Haren and his team have been very generous making these
valuable papers available to us, but also in coming on board as a Media Well Done one and all.
The Process for itSMF Australia Members Subscribing to the Axelos Professional Development Program
Background
AXELOS Ltd and The IT Service Management Forum International Ltd (itSMFi) signed a Partnering Framework Agreement in September 2015. The
Australian Chapter is able to participate in the Agreement having signed the Deed of Adherence to AXELOS.
itSMFA members are entitled to a discount of 20% on the annual subscription fee for the AXELOS Professional Development Programme (25% if the
application is made before end of Q1 2016). This discount will apply for the duration of continued AXELOS Professional Development Programme
membership provided the individuals maintain their itSMF membership.
In order to activate the discount itSMF members will need to obtain a voucher code via a secure area of the itSMFA chapter website. The voucher code will
provide the member with the appropriate discount to the subscription fee when it is redeemed on AXELOS.com. The registration fee will not be
discounted.
Operational Processes
The itSMFA member wishing to subscribe to the AXELOS Professional Development Programme using their individual membership gains permission
necessary to access the log-in and codes.
The itSMF member subscribes to the AXELOS Professional Development Programme at https://www.axelos.com/professionaldevelopment#subscriptions
entering the voucher code at the appropriate point in the process.
The discount is applied to the subscription when the voucher code is successfully redeemed. Note: The candidate will still need to pay the full
registration fee.
itSMF members experiencing problems either using the voucher codes or registering on the Programme should be directed to membership@axelos.com
For further assistance, please contact the itSMF Australia National Office.
3 itSMF Bulletin—February 2016
1 5
2 6
3 7
4 8
4 itSMF Bulletin—February 2016
The Survey at a glance
Executive Summary
Small and medium-sized businesses in the DACH region are also seeing a growth in the number of employees who use mobile devices such as tablets
and smartphones. This presents a number of problems for IT organizations as the number and diversity of mobile devices is increasing workloads and the
level of complexity for the Service Desk. In the survey, 57 percent of IT professionals indicated that an adequate solution for managing mobile devices is
not currently used in their organization. Only seven percent could confirm that the ITSM tool used in their company could also support mobile devices.
The issue of licensing was clearly also a sore point: 30 percent of those polled had to admit that their company does not have a license management
solution for mobile devices and apps.
Mobile devices conquer companies:
Nowadays, the use of mobile devices in companies is generally companies for IT Service Management (ITSM) mostly incapable of
taken for granted. However, a survey conducted by Matrix42 of coping with the complexity that’s found its way into company net-
1,500 attendees at a recent trade show reveals that many works as a result of mobile end devices and apps, many companies
companies are not properly prepared for the rapid growth in are still in the very early stages when it comes to compliance and
mobility that is currently sweeping across the IT departments of license management for mobile devices and solutions.
German companies. Not only are the solutions that are used by
1 The reality: Smartphones
and tablets but no adequate MDM solution
Very low usage Low usage Normal usage High usage Very high usage
(< 10% of employees) (10% to 29% of (30% to 69% of (70% to 89% of (90% to 100% of
employees) employees) employees) employees
Apple iOS Windows Phone Others
Google Android Blackberry OS
5 itSMF Bulletin—February 2016
Although the modern development towards mobile workers who can
access their work and data while ‘always on’ seems in many ways to have 3 Service desks in companies:
happened already, the survey revealed huge deficits when it comes to
topics such as the management and support of mobile devices as well as Not properly prepared for
compliance and license management. 57 percent of the companies that
were surveyed said that they do not currently have an adequate solution for mobility
managing these devices.
The question that remains then is ‘Why does it seem so difficult
for many companies to manage and support mobile devices in
Do you know how your Mobile Device the way that IT professionals have been doing for years with PCs
Management (MDM) is currently and mobile devices such as notebooks and laptops?’ The
answers to the question in the survey concerning the facilities
operating? and options available to IT support for supporting and maintain-
ing mobile devices such as smartphones and tablets show a
completely different picture.
Which facilities and options are availa-
ble to your IT Support Team for sup-
porting mobile devices?
The Challenge: Workplace
Management with mobile devic-
We cannot deny that traditional workplaces with ‘permanently installed’
PCs, which used to be allocated to a single user, are slowly but surely losing
their right to exist. These stationary workplaces are giving way to mobile
and flexible work environments that are presenting new challenges to IT
teams and Service Desks, in particular: Mobility generates a multi-device
work environment that must also be managed and supported by Service
Desk staff.
What do you think are the greatest challenges facing
20 percent of those questioned had to admit that their own IT
Workplace Management with mobile devices?
support staff are simply unable to offer users support when it
(Multiple answers possible) comes to problems with mobile devices, even though 24
percent of the companies that were surveyed stated that their
IT support staff have received training in the iOS and
Android operating systems. For mobile devices too, the solu-
tion to this problem is to combine the right IT Service Manage-
ment (ITSM) with the right tools. However, a mere seven
percent of survey respondents could claim that their ITSM
solution also covers this increasingly important field of IT
infrastructure. Many IT managers and administrators currently
The respondents were also aware of these difficulties: 30 percent of face the situation that further efforts are needed to cope with
respondents said that data protection was the greatest challenge for the increasing day-to-day use of mobile devices in their com-
the management and support of mobile devices and 21 percent of panies. They are quickly realizing that the Service Desk’s task
those polled identified the separation of private and business data as of managing and supporting mobile users is much more com-
a decisive factor for workplace management that in many ways also plex and extensive than many IT professionals perhaps initially
affects safety. The answers to the question concerning the number thought. They are powerless in the face of this dramatic rise in
of tickets in the respondents’ company that previously involved mo- complexity, which is the inevitable result of their users’ new-
bile devices are also particularly interesting in this context: found mobility.
59 percent of the organizations that were surveyed stated that this
figure was between zero and a maximum of 29 percent.
6 itSMF Bulletin—February 2016
4 Reasons: Why is mobility These three central points clearly demonstrate how the growing mobili-
ty of workers and the associated diversity of devices and applications in
characterized by such a company environments are definitely increasing the number of calls
made to the Service Desk. In general, however, this is usually the one
high degree of complexity? area of an IT department that is understaffed and where all requests are
handled by only one or two employees. It is not possible to give these IT
Mobility is an extremely important topic for all companies. The specialists more work to do as they simply cannot cope with any more
IT managers and administrators involved in these issues, how- and the option of taking on more staff is not usually up for discussion in
ever, frequently find themselves confronted with the problem most companies.
of increasing complexity. Why is this topic so multifaceted and
why does it present a greater degree of diversity than was the
case with the IT devices and applications that have been sup-
ported up to now? To solve this problem we must first look for
the causes of this variance. A glance at the very heterogeneous
and highly diversified landscape of mobile devices quickly
reveals the factors that are primarily responsible for these diffi-
culties:
A very wide variety of applications and devices.
Service Desk staff and administrators need to deal with a
huge conglomerate of different end devices and applica-
5 Critical and unresolved:
tions. This is exacerbated by the fact that very few companies
and users have introduced some form of standardization for
License Management in the
mobile devices and applications. Most IT employees find mobile work environment
themselves confronted with a mix of Android and iOS devices
as well as some Windows Phone devices and highly diverse It is not only the mobile devices themselves that are presenting IT teams and
hardware. Service Desks with new tasks and associated new problems. Along with the
mobile devices, a completely new approach to purchasing and using software
The transformation of the workplace: on these devices is also finding its way into the IT landscapes of companies.
The traditional workplace with its permanently installed PC for Apps are no longer installed on users’ PCs via carefully regulated software
one user is increasingly giving way to a more topical paradigm. distributions. Instead, users now install the apps that they need – or at least,
It’s changing more and more to a work environment. Mobility think they need – themselves (mostly from the app stores of operating sys-
inevitably results in a multi device work environment that can tem suppliers such as Apple or Google). This software chaos will inevitably
quickly become a challenge for the Service Desk. For example, remind long-serving IT professionals of the time when PCs were first intro-
Service Desk staff need to know immediately which type of duced in companies. This proliferation was already a major problem back
device a user is using when they contact them with a problem then. To restore order to the various networks and systems, the necessary
(such as ‘my app isn’t working again!’). A modern ITSM system service and management tools had to be developed and put into operation.
must be able to meet this requirement.
What do you use to manage the licenses on your
Merging of business and mobile devices?
private boundaries:
End users are increasingly using their private
smartphones and tablets in company networks.
This means that they also contact the Service Desk if they
have a problem with these private devices. What should IT
professionals do in this situation? The first thing they must
do is quickly and clearly identify whether the device in
question is an end device that belongs to the company or
whether it is a private device that belongs to the user. The An important part of this problem, and one that is unfortunately all
ITSM solution in use must have a good and comprehensive too often criminally neglected by users, is the issue of licensing.
inventory aspect. Questions concerning licensing frequently remain unanswered, especial-
ly where apps, which are purchased and installed directly by the users
on their devices, are concerned. The participants in this ITSM survey
there- fore also had to provide details of the technologies and solu-
7 itSMF Bulletin—February 2016
tions that are used in their companies to ensure that licenses are also expansion of user mobility and the use of many different end devices has
managed correctly on mobile devices. The result was sobering and already had and still has on these areas thanks to the many discussions
shows that greater mobility must also have an impact on license conducted with companies from various sectors and the extensive
management. Over 50 percent of those polled do not use a license customer projects they have been involved in. To summarize simply,
management system for mobile devices or were unable to say if and
how this problem is solved in their company. These new working practices have an enormous influence on the entire
area of IT Service Management.
6 The Matrix42 approach: The Mobility is the major topic for all companies and one that is bringing a
new level of complexity to the Service Desk. IT managers who wish to
solution is simplicity tackle this complexity need to seamlessly integrate these mobility
Matrix42 specialists are able to build on many years of experience in the solutions into their existing ITSM tools. Matrix42 can help out here. Our
areas of IT Service Management, Compliance and Mobility. In recent smart solutions are designed to manage the increasingly complex
years, they have managed to identify the impact that the rapid choice of mobile devices in companies.
IT Service Management in the age of the cloud and mobility
support for mobile working practices
WORKSPACE 4.0
WORKSPACE 3.0
WORKSPACE 2.0
WORKSPACE 1.0
Multi-device
Office/desk PC/Laptop work environment
Conclusion: Using Mobile who clearly identify data protection and the separation of private and busi-
ness data and applications as being the greatest challenges facing work-
7 ITSM to counter the rapid space management in the age of all-embracing mobility, it is clear that only
intelligent ITSM solutions can help. In light of these problems,
growth in mobility IT managers must invest in solutions that actively support Service Desk
staff and administrators and directly alleviate the vast majority of these
The survey carried out by Matrix42 at this year’s CeBIT exhibition has
complex problems.
brought the following fact to light: The rapid growth in mobility, which has
The complexity that mobility is bringing to the Service Desk cannot be
already revolutionized the IT world of private users, is also affecting the
solved by introducing an even more complex IT Service Management
world of professional users in companies. The survey also clearly shows
system. Simplicity is the best solution here!
that only a very few companies and IT organizations are already using ITSM
If companies want to weather this mobility storm successfully, then they
solutions and software to manage their mobile end devices and success-
must invest in automated tools for their Service Desks. This is the only way
fully weather this storm.
to ensure that employees, who in practice have neither the resources nor
IT organizations and companies have a problem!
the time to fully deal with all aspects of the new technology, are properly
The number of tickets will also inevitably increase along with the number
supported in their work
of questions from users concerning how to solve problems specifically
related to mobile devices and applications. The survey also showed that
although the majority of IT professionals are well aware of the problem,
German companies are not sufficiently equipped at present to successful-
ly support the growing mobility trend at their Service Desks.
Particularly when it comes to the requirements of the survey respondents,
8 itSMF Bulletin—February 2016
8 Appendix: offers forward-thinking solutions for modern work environments
under its ‘Smarter workspace’ motto. More than 3,000 customers
Survey implementation and around the world, including BMW, Infineon, and Carl Zeiss,
currently manage approximately 3 million workstations using
demography workspace management solutions from Matrix42.
The Matrix42 survey entitled ‘Mobile ITSM 2014’ was conducted at the Matrix42 operates successfully in seven countries
CeBIT trade show in March 2014. A total of 1,509 people were interviewed. Germany, Austria, Switzerland, the Netherlands, Great Britain,
74 percent of those surveyed were recruited from small and medium sized Sweden, and Australia. The company’s headquarters are in
companies with fewer than 1,000 employees. In the survey, the participants Frankfurt am Main in Germany. Founded in 1992, the company
answered a total of eight multiple choice and weighted questions on mobile has been part of the Asseco Group since 2008, one of Europe‘s
ITSM. largest software providers.
Matrix42’s products and solutions are designed to simply and
How many employees are employed in your company?
efficiently manage modern work environments – whether
physical, virtual, or at mobile workspaces.
Matrix42 AG Matrix42 focuses on user orientation, automation, and process
Matrix42 is a top provider of workspace management software. The company optimization. The company’s solutions meet not only the re-
quirements of modern employees who want to work from any
location and with a great variety of devices, but also those of IT
departments and businesses themselves.
Matrix42 offers its solutions to organizations across different
sectors who value forward-looking and efficient workspace man-
agement. The company also successfully collaborates with part-
ners who provide on-site consultation to Matrix42 customers.
Some of these leading partners include TAP.DE Solutions GmbH,
Consulting4IT GmbH, and DSP IT Service GmbH.
Further information available at
http://www.matrix42.com/en
http://www.matrix42.ch
Disclaimer
This documentation is protected by copyright. All rights are reserved by Matrix42 AG. Any other use, in particular, distribution to third parties, storage in a
data system, dissemination, processing, performance, and presentation is strictly prohibited. This applies to the entire document as well as to parts there-
of. Subject to change without notice. Other company, trademark and product names, which are not expressly listed here, are trademarks or registered
trademarks of their respective owners and are subject to trademark protection. Matrix42® is a registered trademark of Matrix42 AG.
HEADQUARTER SWITZERLAND UK OFFICE AUSTRALIA
GERMANY OFFICE OFFICE
Elbinger Straße 7 Poststrasse 30 88 Wood St Level 6, 55 Clarence St
60487 Frankfurt am Main 6300 Zug London, EC 2V Sydney NSW 2000
Germany Switzerland 7RS United Kingdom Australia
Phone: +49 6102 816 0 Phone: +41 41 720 42 20 Phone: +44 208 528 1065 Phone: +61 2 8484 0355
Fax: +49 6102 816 100 Fax: +41 41 720 42 22 Fax: +49 6102 816 100 E-Mail: info_au@matrix42.com
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@Matrix42de facebook.com/Matrix42de www.xing.de
Copyright © 2015. Matrix42 is a registered trademark of Matrix42 AG.
All other brands and product names are trademarks or registered trademarks of their respective owners.
9 itSMF Bulletin—February 2016
It was smiles all round in Geelong for the
2016 Regional Q1 Seminar
Janet Holling, itSMF Vic Deputy Siobhan Miltenoff, Bupa and
State Chair and Dave Chambers, ICT Darragh Kennedy, Lonely
Geelong Planet
itSMF co-hosted it’s second Regional Seminar on February 11th at Geelong, Victoria’s 2nd largest
city. The topic ostensibly dealt with cloud migrations, but it was in fact a long way from the
typical ‘war stories’ of things that went wrong and how they were fixed. Instead, the central
speaker for the evening, Darragh Kennedy of Lonely Planet had a much more positive take on
things and a load of excellent advice about how an enterprise might manage their own
migration to ‘the cloud’ that was entertaining as well as informative.
The event, run jointly with a local ICT group generated considerable local interest and our
friends at Deakin University provided the venue, which was sensational.
Our plan is to run another three of these Seminars in Geelong, to hold at least another two in
other regional centres in Victoria, to run at least one, preferably two in a non-CBD centre in NSW
and to look hard at other possibilities in other state capitals.
This will see the level of engagement outside the usual realm of our Seminars dramatically
increase, while broadening our scope to attract new members and enhance our profile. But
mainly the benefits will be to those people who reside and are employed in these non-metro
areas who have not been able to access our Seminar program because of distance – they will be
the real winners in all this.
10 itSMF Bulletin—February 2016Article by James Eyre
In May, British billionaire Richard Branson invited a select posse of One of the attendees at Branson's island was Brian Forde. A technology
entrepreneurs, venture capitalists and technology advisers to his entrepreneur, Forde was, until recently, President Barack Obama's senior
Caribbean residence for an exclusive pow wow on an issue occupying adviser for mobile and data innovation in the White House.
some of the top markets minds in the world.
During a visit to Sydney in early February 2016, Forde predicted many
The topic for discussion on the picturesque Necker Island was the businesses from a variety of sectors and governments will be forced this
"blockchain". year to think about how blockchain technology might affect them through
streamlined processes, reduced costs and enhanced service delivery.
Every now and then, something comes "Banks and other financial institutions are thinking about this, and you can
along that might just change see that reflected in how quickly they are moving. Now what we will start
to see in 2016 and 2017 are responses from the other industries that will
everything. And this is one of those be impacted by blockchain."
moments.
In case you're one of the many yet to wrap your head around the
promising technology, blockchain, on a simple level, uses computer code
to engender trust in digital-economy transactions.
ASX chief executive Elmer Funke Kupper says blockchain could change
"everything". Photo: Jessica Hromas
There is massive hype around blockchain in certain circles even though
there are yet few working networks. However, extensive testing of the
Richard Branson's Necker Island was the site for an exclusive meeting to
technology is now beginning.
discuss blockchain.
11 itSMF Bulletin—February 2016Australian banks are
exploring the chain
It has certainly caught attention at the highest levels of Australian finance.
Commonwealth Bank of Australia has joined a consortium of global banks
that have already tested a blockchain to transfer value between each other.
"It is clearly, in very clear terms, faster, cheaper and more transparent than
some of the existing practices we have today," says CBA's chief information
officer David Whiteing.
Commonwealth Bank of Australia chief information officer David Whiteing
predicts blockchain will disrupt systems. Photo: Michele Mossop
The Australian Securities Exchange is building a blockchain to test whether Reserve Bank of Australia governor Glenn Stevens says development of
the technology will replace its existing settlement systems, moving them blockchain is important. Photo: Peter Braig
close to real time.
"Every now and then, something comes along that might just change every-
thing. And this is one of those moments," says ASX chief executive Elmer
Funke Kupper.
What is Blockchain?
When Satoshi Nakamoto (a nom de plume) published the first paper
The potential cost savings from blockchain have been noted at the very describing bitcoin in 2008, he set out a process allowing the
highest levels of Australian finance. crypto-currency to be transferred between owners without the need for
an intermediary to ensure that a particular dollar is not traded twice.
Reserve Bank of Australia governor Glenn Stevens recently noted that if
This was a revolutionary innovation. It overcame one of the biggest
banks could demonstrate that using blockchain were more efficient and
headaches when shifting digital assets around – the potential for
cheaper, it would rapidly drive wider adoption.
duplication.
He described the banks' work testing the systems as "fascinating, and ... This won't be a concern if you are copying a photo from a hard drive to
important". send to friends or post on social media. However, when the digital asset
is money, duplicating it is not an option.
Overseas, governments are also rolling out tests, to determine whether
blockchain can help them better service their citizens. For example, the US And so banks have worked as intermediaries, or "trusted third parties",
state of Vermont is testing a blockchain to store government records, while to ensure that digital ledgers are counterbalanced and reconciled so that
the central American nation of Honduras is doing likewise for property money moving through the system is spent only once. But bitcoin can
transactions. be transferred – over the blockchain – without that central party.
"We say sunlight in government is the best disinfectant, and blockchain The technology uses a network of databases held on various computers
makes things more open and transparent," says Forde. that records transactions in "blocks". These blocks provide proof of who
owns what at any given point in time.
Yet in order to understand why blockchain is getting so much attention and Each computer on the network must approve a transaction before it is
to appreciate how broadly it might be applied, it is worth taking a few recorded in a new block and added to all the previous blocks, forming a
minutes to think about what a blockchain is and how it works. "chain" of computer code.
12 itSMF Bulletin—February 2016The ledger is distributed rather than central. It is also public, allowing every
participant to check whether a transfer comes from the rightful owner, and
is secured by sophisticated cryptography.
Since the creation of bitcoin and its public blockchain, banks are adapting
Nakamoto's vision by developing closed systems that can be shared among
themselves and regulators. These are known as "permissioned" blockchains.
Distributed ledgers have two obvious advantages. One is security: because
the ledger is shared by many parties, it becomes almost impossible to
tamper with. It also provides extremely reliable records on the history of
asset ownership.
Another advantage is efficiency: because the middle man is cut out, assets
can be transferred at faster speed and with lower costs.
There is a great irony in how fast the blockchain circle has turned. When it
was created nearly eight years ago, Nakamoto's bitcoin sought to bypass savings, global banks have begun busily testing blockchains.
the intermediaries in the financial system.
CBA completed a successful test with 10 other global banks last month
It was radical because it sought to overthrow the monetary system by using a private, peer-to-peer distributed ledger for trading with each
removing the need for banks. Anonymity has allowed it to fund drugs and other.
terrorism. Not surprisingly, bitcoin has always been popular with
libertarians. Separately, CBA has built a blockchain in an innovation lab in Sydney
that will be used to show regulators, who must sign off on the
However, now the technology that gave birth to bitcoin is going technology, before real money is sent across the system.
mainstream. There are many challenges still to be worked out, including the
blockchain's scalability and its energy consumption. CBA, Westpac and ANZ are also working with another blockchain
start-up, Ripple, which is developing a system for international
But it seems increasingly likely that after years of stress-testing by bitcoin payments backed by venture capital funding from Andreessen Horowitz
aficionados, blockchain has proved an efficient and effective way of and Google Ventures.
exchanging value. It looks ready to functionally overhaul the way value is
moved in the digital age.
Equities settlement
What is the 'killer' application? Just like it takes the world's biggest banks days to synchronise their
ledgers, when investors want to settle a stock trade, it usually takes three
In order to illustrate the way in which blockchain might be used in the business days from the time the order executes to do the payment and
economy, BusinessDay has chosen five potential applications of the transfer legal ownership of the security.
technology going broader than bitcoin.
Blockchain promises settlement that could be very close to real time.
The first two, interbank payments and equities settlement, relate to finance. That has attracted the attention of the ASX, which has to assume risk
But blockchain may also disrupt the legal industry through the during the T+3 settlement period.
development of "smart contracts" and promises to remove corruption from
developing-country governments and by protecting property rights, "We think if we can get this right, we can get very close to real-time
enhancing economic growth and financial inclusion. settlement," Funke Kupper said last month after ASX said it had taken an
equity stake in a New York-based fintech start-up, Digital Asset Holdings,
to build a blockchain that could ultimately replace the clearing and
Interbank payments settlement systems provided by the CHESS platform.
While money has been digitised for many years and customers have "You should be able to sell shares at your desk right now and walk to the
broadly adopted mobile and internet banking, banks themselves have been nearest ATM to get your money … The moment we are able to do that,
slow to modernise their own internal systems and interactions with each we remove a lot of risk from the system."
other. Blockchain provides a solution to these cumbersome processes.
Other exchanges are also innovating. Nasdaq launched a blockchain
Payment systems are mostly still centralised. Banks have to maintain a management tool for shares in private companies, Linq, in October.
costly and complex web of "corresponding bank" relationships to move Investment banks are also exploring how the technology can be used to
money across borders. settling and trade bonds without a clearing house.
Transfers are cleared through central banks. Synchronising internal bank Goldman Sachs, Citi and JP Morgan have also invested in Digital Asset,
ledgers can take several days. Money can still get lost. Reporting is complex which is also exploring applications for syndicated loans, while UBS has
and arduous. All this increases costs, time and risk. embedded a team of engineers in the Level39 fintech hub in Canary
A report last year by Spanish bank Santander said banks could reduce Wharf in London and have executed bond trades using a blockchain
infrastructure costs for cross-border payments, the trading of securities and system.
regulatory compliance by $US15 billion to $US20 billion a year from 2022
by employing blockchains. Not surprisingly, given the quantum of potential
13 itSMF Bulletin—February 2016Contracts Without proper records, and in places were corruption is rife, a lack of
secure property rights is an endemic source of injustice.
When Sir Richard Branson gathered his group of blockchain experts on his
Caribbean island in May, another participant was Paul Brody, who used to
Forde, who left the White House last year to join the MIT Media Labs as
run IBM's ''internet of things" division in Silicon Valley and is now technology director of digital currency, describes this as the "corruption of the
strategy leader for the Americas at global consulting firm EY. stamp": officials in corrupt regimes can abuse their discretion with old
technology like a stamp to deny fundamental rights
In an interview late last year, Brody described the blockchain as "the glue
that is going to drive a productivity revolution across the globe on par with However, with the blockchain, this middle man can be erased. A
what Henry Ford did with the automobile". government could deliver instantaneous property ownership by holding
its land titles records on a blockchain.
He pointed to toilets being manufactured with cheap computer chips
attached, allowing them to be tracked through customs, delivery trucks and Boosting financial inclusion can be a big boost to economies due to the
onto building sites, thereby enabling builders to co-ordinate installation velocity of money: more funds can be spent if they are cleared and made
times and efficiently sequence work flow. available in faster time.
At IBM, Brody worked on its Autonomous Decentralised Peer-to-Peer The use of digital currencies over the blockchain also promises to open
Telemetry (ADEPT) project, in partnership with Samsung, employing a up online retail shopping markets to those under 18 who don't have
protocol built by the start-up Ethereum that uses a blockchain to connect access to a credit card. For example, Microsoft accepts bitcoin to pay for
household devices and allows them to transact over the "internet of things". content on the Xbox.
Ethereum has developed a programming framework that allows a
blockchain to host "smart contracts", legal agreements or sets of business Record keeping
rules, that execute automatically when the rules set out in the code are satis-
Property conveyancing is also cumbersome in the First World. Think of
fied. An example might be a share certificate that automatically sends their
certificates of title being stored in land title offices, amended on paper
owners dividends if corporate profits reach a certain level.
by multiple law firms and real estate agents, and copied and stamped
A drinks vending machine could use the blockchain to order new drinks and moved by couriers.
when it is running low and to pay for them upon delivery. A driverless car
But a decentralised ledger could keep track of the multiple transactions
could use the money earned from taxi fares to pay for repairs, petrol or
that take place and all the amendments that are made to contracts and
parking, effectively operating autonomously.
other documents, reducing costs and headaches associated with
Banks could use smart contracts to allow for digital repossessions; managing the process.
blockchain could be used to shut down a car electronically if payments are
If governments were to put property titles – or other pieces of
not made.
information such as business licences or birth certificates – on the
blockchain, citizens would be enabled to digitally conduct transactions
Financial inclusion without lawyers, notaries or queuing at government offices.
Another guest at Necker Island for the Branson shindig was Hernando De Forde says governments will start to see the blockchain as an application
Soto, the economist and president of the Institute for Liberty and Democracy that can be used to achieve policy goals, whether that be increasing trust
who Time Magazine described as one of the five leading Latin American and transparency through property title, or "eliminating bureaucracy by
innovators of the century. creating "responsive open data", which interacts with government
ledgers "without having to interface with people using the rubber
stamp".
While financial regulators are already closely scrutinising blockchain
technology to determine whether they will approve its use by financial
services players, Forde says governments will need to think about
blockchain outside the financial regulatory framework. Inter-disciplinary
policy groups will be important, he suggests.
As the federal government of Prime Minister Malcolm Turnbull seeks to
lift economic growth by encouraging more innovation, it seems likely
that blockchain applications will be on the agenda of the Digital
Transformation Office.
James Eyre
De Soto is author of the book Mystery of Capital, which argues that no Senior Reporter
developing nation can build a vibrant market economy without an THE AGE
information framework that allows citizens to record the ownership of
property and other economic information.
14 itSMF Bulletin—February 2016itSMF THE SMILE
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A City of Melbourne
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Acso Cochlear
ActewAGL Commonwealth Bank of Australia
Ajilon Corrs Support Services Trust
ALC Education & Consulting Pty Ltd Courts Administration Authority
Alemba Pty Ltd CPT Global
Alphawest Pty Ltd - (Optus) CrimTrac
Ambulance Victoria Cubic Transportation Systems Australia
ANZ Banking Group Curtin University of Technology
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Arrow Energy Pty. Limited Datacom Systems Victoria
Atlassian DBP
Attorney-General's Department DCSI
Australia Post Deakin University
Australian Federal Police Defence CIOG ACT
Australian Nuclear Science & Technology Department for Education & Child Development
Organisation
Department of Agriculture; Fisheries & Forestry
Australian Taxation Office (DAFF)
Axios Systems Pty Ltd Department of Attorney General & Justice
B Department of Education & Training (Vic)
Bankwest Department of Education & Training (Qld)
BMC Software Department of Finance & Deregulation
BOQ Department of Fire & Emergency Services
Boral Shared Business Services Department of Health and Human Services
Bravuro Pty Ltd Department of Immigration & Border Protection
Brisbane City Council (Information Services) Department of Justice & Attorney-General (Qld)
BVN Architecture Department of Science, Information Technology and
Innovation (DSITIA)
C
Department of State Development
CenITex
Department of the Premier and Cabinet
CGI
Department of Transport & Main Roads
CITEC
Department of Education & Training NSW
CitiPower & Powercor
18 itSMF Bulletin—February 2016Department of Industry Macquarie Group Services Australia Pty Ltd
Department of Justice & Attorney-General - ICJ Ser- Main Roads WA
vice Management
Marval Australia / ASG Group
Dimension Data Australia
Matrix42
DSTO
MMG Australia Ltd
Dunn and Bradstreet
Monash University
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Motorola Australia Pty Ltd
Edith Cowan University
MyState Bank Limited
ElectraNet Pty Limited
N
Empired
National Australia Bank
ESTA - Emergency Services Telecommunications Au-
NEC Australia Pty Ltd
thority
NSW Police Force
F
O
Federal Group - Technology Services Group (TSG)
Origin Energy
Flinders University
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Fortescue Metals Group Ltd
Penguin Random House
Fujitsu Australia Ltd
Power and Water Corporation
Fusion 5
Public Safety Business Agency
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Public Transport Authority of WA
Glenorchy City Council
Q
GR8 Service Management
QBE Insurance
Griffith University
QSuper
H
Queensland Health
Harbour IT Pty Ltd
Queensland Motorways
HBF Health Funds Inc.
Queensland University of Technology
HEAT Software Asia Pacific Pty Ltd
R
Hewlett Packard
RACQ
I
RACWA
Information Services, Department of Communities
Redcore Pty Ltd
JK
RMIT University
Kepner-Tregoe
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Kinetic IT
SA Health
KPMG Australia
SA Power Networks
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Safety Return to Work and Support
19 itSMF Bulletin—February 2016ServiceNow Australia Pty Ltd University of Tasmania
Shared Services ICT University of the Sunshine Coast
SMS Management & Technology UXC Consulting
Solisma Pty Ltd
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St John of God Healthcare
ValueFlowIT
State Library of Queensland
Vic Track
StateNet Services
Vix Technology (Aust) Pty Ltd
Summit Software Inc
W
Symphony Summit
WA Police Service
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Water Corporation
Tabcorp
TAL Life Ltd Western Power
TASNetworks William Hill Australia
Telstra Corporation Ltd Woolworths Limited
Terra Firma WorkCover SA
TfNSW X
Thales Australia Xtraction Solutions
The BPAY Group YZ
The Treasury Zurich Financial Services
The University of Queensland
The University of Western Australia *Current at time of publication
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University of Melbourne
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