Dive Brief:
- IBM's revenue grew 5% YoY in Q1 2018 — its second consecutive quarter of growth after more than 20 quarters of declining revenue.
- Companies and organizations are adopting IBM's blockchain technology in droves as a way to track shipments and store data across the supply chain.
- "These results reinforce that our clients value our innovative technologies," said Ginni Rometty, IBM chairman, president and chief executive officer.
Dive Insight:
As companies jump on the blockchain bandwagon, IBM is reaping the benefits and could be making a comeback after years of declining revenue.
While blockchain began as an experiment in digital currency and a way to decentralize financial transactions, companies have realized the technology's applications reach far beyond cryptocurrency.
"We ... continue to make progress in emerging areas like blockchain. We’ve grown to over 50 active blockchain networks since the release of our IBM Blockchain Platform in the third quarter last year," Jim Kavanaugh, IBM's senior vice president and chief financial officer, said in the company's earnings call Tuesday.
Samsung is one of the latest major companies turning to blockchain to help manage its supply chain. It's considering using blockchain to track global shipments of its electronics. In an interview with Bloomberg, Samsung's blockchain chief said the technology could cut costs up to 20%.
In addition to cost savings, blockchain promises to help supply chains with visibility, particularly beyond Tier 1 suppliers. Starbucks launched a pilot to create transparency from "bean to cup," using blockchain to collect data on coffee bean farmers in its supply chain. Unilever is using the technology for a similar project to monitor tea farmers that supply to its brands.
With many companies adopting blockchain, the technology is bound to reach its popularity peak in the near future. In fact, in summer 2017 Gartner reported blockchain as past the "peak of inflated expectations" and heading down toward the "trough of disillusionment."
The trough could signal bad news for Big Blue's revenue growth. But if the numerous blockchain pilot projects prove successful in adding traceability and saving costs, blockchain could be here to stay.
