DeCoded Podcast: Exploring the Power of Blockchain
With Yorke Rhodes III, Microsoft • January 2020
Can blockchain transform your organization? We talk with Yorke Rhodes III about Microsoft’s blockchain journey, and the value of blockchain technology.
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Yorke Rhodes: Thanks Reid, good to talk to you again.
Reid Jackson: Yeah, great to talk to you. I really appreciate you taking the time out of your busy schedule and not only working for Microsoft but teaching at the school. And I know you have a very, very busy life, but ... So we're here today to talk about blockchain. And the funny thing for me, everyone talks about it all the time, whether it's with your aunts and uncles or nieces and nephews and talking about how it's going to change the world and all these types of things. But I just want to kind of review the timeline of blockchain. It was really invented in the early 90s and I don't think a lot of folks realize that, kind of came about with a buzz with cryptocurrency in early 2000.
Reid Jackson: But according to a couple of studies, one by Accenture, it really didn't hit early adopter stage until 2016. And, in May of 2018, Gartner, did a report and said that only 1% of CIOs indicate any kind of blockchain adoption. And only 8% of those CIOs were in short term planning for stages. So we're knocking on the door of 2020 here, what are your thoughts on this? I mean, have we changed a lot in a year or is it kind of going on the same thing? Have we gone through the trough of disillusionment? Where are we?
Yorke Rhodes: Yeah, a good question. I think we have gone through the trough of disillusionment. I think that, in the last 12 months there was I think broad concerns outside of the industry about, hey, this is one of those typical hype technologies, is there actually value there? And I think just going back to your point about, the history of blockchain, what is fascinating to me about blockchain is that its academic roots have been well studied for a couple of decades, right? And so if you look at the cryptographic caches, SHA256, and how things like Merkle trees and how things are sort of put together, the foundational technologies actually have been well studied, right?
Yorke Rhodes: And so you've got the invention of blockchain actually, like many inventions is that someone took three or four interesting things and put them together in a new way and that created something remarkable, which was this invention that we commonly call blockchain now. And I like to refer to that invention and the outcome of that invention as the ability to digitally uniquely represent some type of thing or asset. And that's been very hard as the advertising industry is rampant with this inability to trace the source of traffic, inability to prevent logos and brands and things like that from being easily ripped off, inability to attribute content properly back to the content owners so that they are properly being compensated for their creative works. Right? And so what blockchain has actually done is given us the ability to do that by combining three or four disparate technologies in a sort of special way.
Yorke Rhodes: So it is a phenomenal invention. As an industry in the technology space, generally we have a couple of challenges and I remember actually hitting these challenges, that blockchain solves throughout my career, especially in the early days of my career when I was a programmer. Just being unable to solve things in a simple way because of the lack of the ability to digitally uniquely represent something. And so, one of those areas that I think it has sort of happened in the last year or two is that people start to recognize through the testing that they've done, the proof of concepts and things like that, that, hey, there are some remarkable capabilities here if you put systems together in the right way and look at it from an enterprise perspective.
Reid Jackson: Yeah. I really appreciate your background and how you've kind of come to where you are today with the work that you're doing because it's a lot more complicated than most people think. I think a lot of us today we're knocking on the door of the year 2020, and for me I'm knocking on the door of 50, so I've been around for a while and back when I was a child, I was like, oh, the 2020 we're going to have flying cars and you know, all these types of things. And the funny thing is, is we almost do.
Yorke Rhodes: We're very close to that, exactly.
Reid Jackson: Yeah, technology is moving so, so fast.
Yorke Rhodes: Yeah. I think that's actually a really important thing to recognize. I mean, I was going to reference that we do have our own Tony Stark now, right? And Elon Musk, right around things like the cyber truck. I mean, the reality of technology is that it has moved from the realm of programmers who solely think about programming into the realm of technology inside of everything that we do. Right? So that enables automated types of responses in vehicles, whether they're hovercrafts or cars or trucks or drones, right? That are able to use that technology to actually do something that wasn't possible before, like stabilize a drone. Right?
Reid Jackson: Exactly, exactly. And so we're getting a little off topic, but it's still, we're going to come back here real quick, but it's important to understand that there's this Moore's law, right? Which Intel is run off of, right? Moore's law, which is every 18 months we're going to be faster and smaller in size and a little bit cheaper, and Moore's law has been going for so long now, but now we're starting to see this hyper-growth and talk of quantum computing and how AI, with what you just talked about with all this interconnectivity, AI, 5G coming out, quantum computing, it's almost mind boggling. I mean, what you see in what people are doing with hackathons and just thinking outside the realm it's very optimistic to me. It's very scary to me, but, it's hard to keep up with.
Reid Jackson: I mean, and that's why we're talking today. It's hard to keep up as a CIO, right? In 2018. Two years ago, less than two years ago they're 1% are looking at cryptocurrency. What do you think with, I mean, you're talking to CEOs all the time. What do you think it is now? A year later, a year and a half later from that report from Accenture what do you think CIO's percentage wise, just your own opinion are thinking about real implementation of blockchain solutions?
Yorke Rhodes: Well, I think there's two things. I think a lot of the blockchain value proposition is driven by lines of business. And so that you see a lot more folks, like a VP of supply chain or a VP of sustainability or a VP of finance, right? Who are really digging in because they're recognizing the value of technology in their line of business that they haven't seen in a way before, and this is where the drive is coming from. The CIO is obviously tasked with putting the technology to work in a sensible way that passes the security requirements of the organization, scalability, uptime and all that. Right? And so, you've got the executive line of business drivers and driver for value drivers, which is really what's been pushing blockchain in enterprise for the last couple of years.
Yorke Rhodes: But what you've also now got in the last couple of years is, I wouldn't say that blockchain has matured, but the padding around blockchain that companies like Microsoft have put in place to protect enterprises, to make enterprises feel comfortable with the technology is actually what has changed fairly substantially in the last year or two. And that is why we're now seeing the office of the CIO start to embrace the technology because it's not much more accessible. And so I would say that I still think we're early in the journey and I still think I would not probably say that we're past 5%, in terms of, thinking about the market because it is as I look at it from my startup lens, it is early in a startup journey, right? And so, you have to think about the market in that way, right? The enthusiasts exist within the blockchain bubble, there, is starting to get outside the blockchain bubble, but it's not mainstreamed like a MongoDB or a SQL server. A streaming message bus, right? So ...
Reid Jackson: Yeah. No, no, absolutely. And I love the way you actually handled that question. I don't know if
others picked up on it, but I'm always a skeptic of percentages. And I think it was because I had a great professor in college and at this one class, I just remember, and this was a long time ago now. But he said, "Don't ever believe percentages because sewage water is 99.5% water and you'd never drink it." So, always look for the data. So I noticed, I asked about CIOs and you quickly went to line of business and if I look at line of business people, the numbers are a bit higher because it's a little bit more focused and there's still a lot of pilots and pilots who don't really bubble their way up to the CIO level a lot. But no, I really like your perspective. I like your perspective on that question.
Yorke Rhodes: I would also say that like any technology is option journey, you've got the bleeding edge adopters, you've got the laggards, right? You've got the typical bell curve of adoption. And people who want to be on the bleeding edge are going to be on the bleeding edge on any technology, right? They can do it.
Reid Jackson: That's right.
Yorke Rhodes: And people who are laggards, one way to put it or another way to put it is people who work in highly conservative organizations that are risk averse, they're going wait. Right? And that's not a blockchain thing, that is a technology adoption thing.
Reid Jackson: Yeah, no, absolutely. And I've worked myself on a couple of projects where we were going to go change the market and bring something entirely new. And that was our mantra. Like it only speaks to the early adopters. You're wasting your time trying to convert laggards and mid adoption folks, they still need to see the early adopters do it. So the faster you can convert them to work through that. So I want to ask you a question here and maybe it's the appropriate time, maybe not, but I'm going to ask it anyway. So, you have Ethereum and Hyperledger and R3 and Ripple and all these other platforms out there and for those that are familiar with blockchain, there's the challenge of interoperability between the platforms.
Reid Jackson: Can you talk about that just a bit and where we are and where we're going? There's the argument, I'm an old networking guy, right? Working at Cisco in the 90s and growing up in my first enterprise position was with Xerox back when it was AppleTalk, Token-Ring, Banyan VINES. You've heard me talk about this before.
Yorke Rhodes: Exactly.
Reid Jackson: And so those were networks for ... for people that don't know, those were networks that didn't talk to one another, right? I mean, it was, if you are on an Apple network, it couldn't talk to a Novell network, which couldn't talk to an IBM Token-Ring network. And so I kind of feel a similarity here.
Yorke Rhodes: That's a good analogy.
Reid Jackson: Go ahead.
Yorke Rhodes: I use the analogy also. I mean, unfortunately, some of those words are not things that people currently understand, but a great example of that is Novell NetWare was the dominant network operating system in the early 90s. There were really everywhere, right?
Reid Jackson: Everywhere.
Yorke Rhodes: And to your point, other networking protocols like Banyan VINES was one, AppleTalk was around, Land Manager. There were about five TCP/IP, obviously, right? Which was the winner, obviously. So I would say there were about five competitors in the early 90s for who was going to be the networking stack of the future. And I actually don't know that necessarily anybody probably besides Novell thought about it that way and maybe AT&T because they were so much behind the TCP/IP. But there was a tipping point that happened in the mid 1990s. Microsoft played some role in that because in 1995 when Microsoft shipped Windows 95 the company made an impression, a decision to change the default networking stack from Novell NetWare to TCP/IP.
Reid Jackson: That's right.
Yorke Rhodes: And that decision basically meant that when you went out as a consumer and bought a PC, a laptop, a piece of technology at the time, that you were actually now buying Windows 95 because it was the dominant operating system outside of the Mac operating system. You were buying a stack that it started with TCP/IP. And so now consumers, whether consumers cared about it or not, were actually first-class citizens on the internet because by 1995, the TCP/IP protocol was essentially the protocol of the internet. And the question really was, is enterprise going to align with that? Right? Or is enterprise going to do something that doesn't align with that.
Yorke Rhodes: Now, if you look at the benefits of aligning with that, it is significant, right? We have a full stack
application programming environment that is equivalent on the inside of the firewall and on the outside of the firewall. And that has dramatic economies of scale from a developer knowledge set perspective and allows not people not to have to worry about the low level protocols because what's happened to us on top of TCP/IP, there's been other protocols built that allowed people to move up the stack and start to focus on the value proposition much farther up the stack.
Reid Jackson: So how do you-
Yorke Rhodes: I didn't answer the question at all.
Reid Jackson: I loved it. We were geeking out there for a second on some of our history, but then how do you see the current blockchain environment? We have multiple different platforms, like if I'm building on one it can't talk to the other. Okay. So go ahead, elaborate a bit more.
Yorke Rhodes: Yeah. So it's just similar in that way, right? We're sort of like at the pre 1995 stage of trying to figure out what's a sensible base layer protocol for both the internet and the intranet. And I think that will play out over the next a couple of years more than likely. Now there is an interesting dynamic that happens in the blockchain space, which is, sort of how investors thrive, meaning VC investors primarily not institutional or a consumer investors, but how VCs think about the world and trying to value capture, right? That's their business. That does drive some behavior in terms of where they invest their money in certain protocols, stacks and different VC investors have very different sort of thought processes around that.
Yorke Rhodes: Now, so if you take a step back and you say, okay, the dramatic value proposition that we arrived at that gave us Uber, Amazon, Airbnb, right? All of these amazing full-stack applications was that we got to the point where we rationalize the base layer protocols to a single stack, right? And the people coalesced around building on top of that stack, that needs to happen in blockchain. It will be slightly different because of the qualities of blockchain add, some dramatic things on top of the internet protocols that don't exist, like uniqueness and identity. But from the perspective of wanting to get to a rationalized single protocol stack that from a middleware/business application perspective, the interface should be the same, right?
Yorke Rhodes: And the way Microsoft's handled that in the early days of the PCs was Microsoft created an API layer, right? And we still do that, right? And that API were actually protected the applications from changes or differences in the underlying protocols and the classic example of that is printers, right? There was a gazillion different protocols in printers, and very hardware specific stuff, right? And being from Xerox you know this, the way that Windows dealt with that was to create an obstruction layer called an API, which allowed the applications to talk to the API and not have to worry about the Xerox printer versus an Epson ... whatever. Right? And so where we are today in blockchain is applications are doing that already, right? And so application, companies, vendors, if you want to call Microsoft that or cloud vendors, think about the world in that way is how do we create compelling development environments that create certainty for an application layer, so that you can actually start to expand the pool of people building on top of your platform.
Yorke Rhodes: And so we're seeing some of that, certainly it is a focus of anybody who builds an SDK for their platform, like a Samsung for example, with the SDK that they put out just recently on their, basically their application programming interface for their device. Or Microsoft that's very focused on providing a number of different interfaces so that you can move up the stack essentially and start to build the business value applications off the stack.
Reid Jackson: Yeah. That's interesting. You brought up Samsung because unless I'm mistaken, their latest release of phones now has blockchain built into it.
Yorke Rhodes: That's right. They're probably the third or fourth phone vendor on the market that has done something like that. There were some, in the earliest implementations, there were some very nascent, unknown or not name brand phones that actually integrated a blockchain capability directly into the device. And so that when it shipped to a consumer, it had blockchain capability in the device, whether the consumer cared about it or not. Right? And what Samsung has done with the S10 and future lines of their phone is they've done two things. One, they've built a secure enclave that has an SDK in it into the phone. And that gives you the ability to have a very safe place to put private stuff, which could include lots of blockchain keys, identity keys and things like that.
Yorke Rhodes: Then they built an SDK on top of that so that application developers could use it. Then they built an application market on top of that, so that application developers who built to their SDK could publish applications and have a place to make people aware about them. So it's a smart approach, it is actually one of the tipping points that I have called out this year. Earlier this year, both Samsung and Opera Browser are good examples of well known brands that have substantial market share that have built blockchain capability directly into their products.
Reid Jackson: Yeah, it's very interesting. And from your previous example of Windows 95 and changing the default to TCP/IP, some of the key leads that you're starting to see in the industry where things are going.
Yorke Rhodes: I try to base these ... That's important, not because like, and I use this terminology very specifically. In Windows 95 consumers didn't care that TCP/IP was in there.
Reid Jackson: They didn't know that it was.
Yorke Rhodes: That's right. Samsung's buyers generally don't care, that there is a secure element and blockchain SDK on the device. Opera Browser users generally don't care, right? And so, but what's important is when you get mainstream products, and Opera as an example, has more than 300 million active users in Africa. And Samsung, as you know, is just a dominant mobile phone device manufacturer has huge market share worldwide. When you get the stack, like Windows 95 created in the 90s with TCP/IP inside of consumer devices, well guess who follows? Developing.
Reid Jackson: Exactly.
Yorke Rhodes: And so it is really important signaling and also capability that drives the tipping point.
Reid Jackson: Excellent. Let's shift gears here a bit. I'd like to understand a bit more about your role at Microsoft and what you guys are doing with blockchain. If you could talk to that, just kind of give us a little bit of the behind the curtain as to what really is a principal program manager? What are you doing?
Yorke Rhodes: So great. So, well let me just start because my journey is a little bit unique. In Microsoft, I actually had my personal discovery in blockchain in early 2015, only about six months after I had returned to Microsoft. And so I basically did my studying and emerged from about six months of study convinced that this was as dramatic a technology change and shift as the internet was. And again, looking at the history of the internet and being an eCommerce instructor at NYU, I can see what that full technology stack has given us, right? From a consumer utility perspective. So this journey led me to the end of the summer in 2015 to a quandary, which was, Microsoft didn't know what blockchain was. And so my decision point was I either stay at Microsoft and help them grok blockchain and actually go on a startup journey inside of Microsoft or leave Microsoft and go on a startup turning in blockchain.
Yorke Rhodes: And it was a fairly lengthy decision for me to choose to return to Microsoft with very specific, reasons why I did that. And Satya Nadella not withstanding being a key enabler of those decisions, it's not just Satya being the CEO of Microsoft who's done a phenomenal job in the last month.
Reid Jackson: Yeah. I mean, really amazing if you look at what it's done.
Yorke Rhodes: Yeah. So, I sort of saw that coming. When I studied Satya for about three months before making the decision that okay, it was a good idea to even look at Microsoft as a company to go back to 15 years later after I left, basically what I said to myself, this is likely going to be the biggest corporate pivot in technology that I've seen in my history and I want to be a part of that and that was why I came back to Microsoft. Well, six months later I fell upon a technology that Microsoft wasn't doing anything. And which actually was the reason I left Microsoft in the end of 1999 because I wanted to get into wireless and Microsoft was not doing anything in a space.
Yorke Rhodes: So I was in a real, like personal boundary and I effectively decided that I was going to stay, and I was going to try to build blockchain. Like I would build a startup outside in the wild and that Microsoft was the ecosystem I had to conquer and I was going to treat every conversation like you would if you were a startup. And so I started doing that. I met a colleague in the late summer of 2015, who was on a very similar journey. He and I sort of divided up the work. I was working on partners, so he dumped all the partners on my plate and he was working on enterprise applications of blockchain even then. And so we just, we pushed forward. We had great support from Satya as well as Peggy Johnson, who is an EVP in our business development organization, in the fall of 2015.
Yorke Rhodes: So we had some good executive support to go and use our growth mindset and figure this thing out. So wind the clock forward, there was no engineering team at that point. And this all was something that had to evolve over the next multiple semesters, which is the way we look at planning at Microsoft. And so in early 2016, the engineering team started trying to figure out and learn blockchain and figure out what was going on. And obviously taking the lead of myself and my colleague, really strong focus on like, this is a vibrant, open source, blockchain community. We need to do, if we're going to do anything in this technology space, that's how
we need to think about it, right? We need to not think about it from a proprietary perspective.
Yorke Rhodes: Now, fortunately, Microsoft had done a really nice pivot right in the last number of years around open source. So that was sort of the beginning of the journey. Now, I actually pulled in a colleague and we shipped a product in April 2016. And that product was visual studio code, which is a product of Microsoft's for an IDE for development. So visual studio or visual studio code, which is the open source version of that. We shipped with a partner, a plugin for solidity or smart contract development, which was a dominant language at the time. And so, when I look at the journey it's quite amazing to me that within a couple of months without an engineering team, we're able to ship a product. Right?
Reid Jackson: That is very impressive. I mean, it's such a short window. And when you think of large companies and bureaucracy and red tape and approvals and compliance and all those things, I don't know how you did it. I think you might be lying.
Yorke Rhodes: We were definitely in the mode of not asking for permission.
Reid Jackson: I got to tell you, for the folks that are listening, there are a lot of nuggets of information being dropped here. If you're not picking up, I mean the deflection on which lines of business to go after and not asking for approval and doing a startup in one of the largest software companies, if not the largest software company in the world. Very cool. I'm sorry. Keep going. So you ship this in April.
Yorke Rhodes: Yeah, so that was April 2016. And again, it was with a collaboration and a partner community. So obviously the partner community was already bought in to the fact that we were lighting up a smart contract development with inside visual studio. So it was an important moment. And actually Microsoft has a developer conference called Build, it used to be in San Francisco. We've moved it back to Seattle because logistically it's easy for engineers to get there. And in May of, I think it was April or May of 2016 at our annual Build conference, which is again, the conference where Microsoft talks to all of its developers, is when we unveiled, essentially unveiled to the Microsoft developer community this new capability. And it's obviously in early 2016, it was a blip on the radar of everything else that was being presented to developers there. But interestingly enough, I have a picture that showed up on the front page of coindesk.com of myself and Andrew Keys who was instrumental in getting this work done, and Vitalik Buterin who is the founder of Ethereum.
Yorke Rhodes: And so it's just this moment in time a picture that I couldn't, it's not something I could ever recreate from April 2016 just like such a wonderful beginning to a journey with like really, really early public statement and also the ability to ship, ship product and show up in that way. So we look at the Build conference as an annual rite of passage from a products perspective because like this year is coming Build conference in May 2020, there will be more than 20,000 developers as an audience there. It is a first party Microsoft event plus partners who are showcasing their product. And so it's a great time for us to talk about the work that we've done for last year, and we expect to continue doing that.
Yorke Rhodes: So wind the clock forward. We have a substantial portfolio in the blockchain space. And we also were able to incubate something which is I would say sort of the next horizon. If you look at a Gartner chart, which is decentralized that gen identity and the value proposition of cell phones identity, and I'm not going to jump into too much on that, but we do have a formal engineering group within the Microsoft engineering organization that is, has been shipping products mostly to open source in the last year plus around this idea of a cell phone identity. I was also personally behind Microsoft's decision to financially fund a nonprofit that was focused on a digital identity as a human rights going back a couple of years, an organization called ID 2020, that we continued to support. That's basically looking at how do we prove that thesis that a cell phone identity is a value proposition in a humanitarian context with refugees and displaced peoples, et cetera, et cetera.
Yorke Rhodes: So that is another strand of the startup journey that that is continuing to bear fruit at Microsoft and they're doing just unbelievable work. But by the way, in that category, the W3C just ratified the idea as a standard. NTID is the base format for a decentralized ID. So that's been going swimmingly well also. So in the Microsoft portfolio as I mentioned is fairly substantial at this time. We have, besides, I covered the identity stuff because I want to put it on the side. It is an area of great fascination for me and the team is doing phenomenally well. But if you look at specifically where we are in the blockchain portfolio space, we cover about three pillars of how we think about the world. One is we need to democratize the technology from a developer perspective, and so we've continued the journey with improving the developer experience in visual studio code and visual studio. We spend more time in visual studio code now I think as a company probably, and as an organization because it is widely recognized as one of the best open source developer environments that are out there.
Yorke Rhodes: And so we've basically, in October we shipped an updated version of the blockchain, Azure blockchain software development kit, which takes a bunch of open source product and actually includes it together in a seamless end to end experience for blockchain development with visual studio as the IDE. The goal being that a developer stays within the visual studio environment and doesn't need to context switch for every single step of thing that they're trying to do on this new nascent technology. And so we've done a really good job stitching it together from an end to end experience perspective from grinding the smart contract to pulling the smart contracts on a test net, to deploying it on a production net, to deploying it on Azure blockchain service in our private permission context, to deploying it in a public Ethereum, context to doing client side debugging, online debugging. I mean, and leveraging the great work that's happening in the community from companies like OpenZeppelin, Truffle, Infura that are partners that we've worked on to actually get this great developer experience, so that's pillar one.
Yorke Rhodes: And by the way, just to call out my amazing colleague who shipped the first ... who was the developer behind the April 2016 visual studio plugin work. He's the one who leads that developer experience and he's just been doing such a phenomenal job there. So in the middle pillar of the three pillars in our portfolio is how do we help enterprises, particularly this is a CIO focused effort. How do we help them get comfortable with the technology and then know that they have a technology that's reliable and that they can look at it from an SLA perspective, right? And then it has ability to pass, say-so audits, right? And security audits. And that's where we have a product that we call Azure blockchain service, and this is a managed service offering that looks at the most popular blockchain stacks in the market. We see that-
Reid Jackson: Okay.
Yorke Rhodes: So that includes, if they're invariants, the first one we have in there is called Quorum. And recently announced about Corda and Hyperledger Fabric as the two other, very popular blockchain stacks that enterprises are after. Right?
Reid Jackson: So anytime you do ... What are the top platforms? Those four always show up in the top five, from what I've seen.
Yorke Rhodes: Yeah. And we look at it from a developer audience, like the metrics, how do you evaluate that? Right? You look at it from, we have all these facts running in our cloud, so we can look at cloud signal who's using that. We look at just market, whose behind the protocols in the market, like the companies, what are they doing or the organizations like the Hyperledger project or the Assyrian foundation and the enterprise Ethereum Alliance on that side. And we also look at developer audience, right? And because as I said earlier in this conversation, if you create the technology stack, put it in front of consumers, whether they care or not, the developers will follow. So which stacks among all these are the developers interested in?
Yorke Rhodes: And so those are metrics that we look at to sort of evaluate where to make investments. There are about 40 different blockchain stacks running in our Azure cloud. We have to obviously pick and choose very carefully which ones we will actually try to put an SLA around because I can tell you that having gone through this experience with the blockchain engineering team, creating a service in a cloud that has an SLA where you have to worry about networking latency, disc base, VM uptime, regional connectivity, tenant to tenant conductivity across customers, VPN, [inaudible 00:38:13], every single part of the stack, if you're going to provide a service you have to worry about, right? That is not an easy [crosstalk 00:38:19]-
Reid Jackson: Yes. It's the Achilles heel that everyone misses. You know, it's like, I've been in these conversations many, many times and yet everybody is sold on the technology and then you get down to the operations bit of it, right? I've dealt with a lot of application folks and they know what their application does, but once it moves over to the enterprise operations, they don't realize, oh, I need backup services and I need identification services and I need three different, five different security layers services that they didn't build for that, they built their application to do things. So what, what's the third pillar? You talked about democratization of the tech, helping enterprises get to that comfortability with the SLAs. What's the third pillar?
Yorke Rhodes: So I would put this, so the terminology democratization is what we do across any technologies. Like we talk about in AI as well, right? Like making AI accessible. So from a blockchain portfolio perspective, I mentioned the developer experience and the stacks, like how do we have the managed service offering that allows CIO to be comfortable. The third pillar is how do we move up the stack, right? How do we actually make it possible now to build enterprise applications sensitively where blockchain is a part of that enterprise application stack. And so that's where, it's a horrible term. I hate the term, but there's a bunch of middleware services that we can take advantage of. You mentioned one of them, which is Azure active directory, which is, it gives you a permissioning layer of objects cloud.
Yorke Rhodes: And we have just recently shipped actually something called, two different things in the last month. One called Azure blockchain tokens, which I'll get to in a minute. Then Azure blockchain data manager, which, it allows us essentially as a service to reliably pull transactions off of the ledger so that we can do other things with them. And so what we're doing is we're basically feeding the streaming blockchain transactions that we have in a blockchain network onto any [inaudible 00:40:25] message bus. That is it pumps buses and then allows an application to decide what they want to subscribe to and what are they going to do with it, right? So it gives us tremendous utility and scalability of what we're going to do with the data from blockchain as we look at an application stack that we're building.
Yorke Rhodes: Couple that with something called logic apps, which is a component of Azure that's focused on interconnectivity between enterprise applications. It has existed for quite a while. There's about 200 different connectors in the logic apps, product and this allows us to, for example, publish a blockchain connector into that connector pool. And now we can cross connect to SAP, Dynamics, Salesforce and 200 other different systems just by plugging into that logic app middleware. And so that's tremendous when you think about a multi-party workflow scenario. For example, in supply chain where every member of that value chain is probably using some different nuanced enterprise system. So now they can all use their own integrations through this connector pool. So that for example, if one participant in this value chain is using SAP in a certain way, they can use the logic apps connected to SAP to be able to connect to the blockchain data that's coming off of the blockchain network that are participating in.
Yorke Rhodes: If another participant is using Salesforce for something or Dynamics for something, those connectors are there. And those integration points now don't have to be standard or don't have to be a lot of work for anybody. Right? And it's typical things that an enterprise is really good at, right? It's like thinking about how do I integrate my systems together, and not having to worry about how other people are integrating their systems together.
Reid Jackson: That's such a great point. I really want ... I want to interrupt you. One, I could talk to you all morning long and we don't have infinite amount of time, so I want to be respectful of the time. But two, GS1, a month ago, we actually ran a hackathon in San Francisco and we called it a Trace-a-thon, and we were looking for folks to help us with what's the next best way to do this, right? Like we supplied a bunch of different problems and asked folks to address those. And we actually handed out $10,000 to the first place winner. And we have to educate them a bit on supply chain and standards for some of them, some of them were fully embedded and knew everything about it. But the big thing that came, that bubbled up is there's a significant, and we're talking about enterprise and business and contracts and just the way the world goes around, there's a huge difference between transparency and traceability.
Reid Jackson: So transparency is, I have full vision. I can see everything. That doesn't work when you have a supply chain, it's the one up one down scenario. So I'm a middleman, if you will and I could get cut out of the deal, but I'm working super hard. I'm a vital part of this business, so I want to have traceability so people know that I have good authenticity and I have good service. And what I do is what I say and what I say is what I do and all of those aspects. But I can't afford as a businessman to give you full transparency. And that was the thing that just got them like the developers were like this super cool. And then they're like, oh wait, we can't give transparency all the way up to those other guys. So where do you see blockchain helping out specific to supply chain in this traceability piece?
Yorke Rhodes: So I want to make sure I sort of make one statement that's an important value statement of which is at some point, middlemen who don't provide value get cut out. Right?
Reid Jackson: Absolutely.
Yorke Rhodes: I think blockchain is a transformational technology, which actually will help people reevaluate the members of their value chain.
Reid Jackson: That's right.
Yorke Rhodes: So there is absolutely, if you look at the businesses of companies like, business transformation companies like Accenture, that's what they do, right? As an expertise. They look at how do we help you transform your business to make it better because we now have a new tool, right?
Reid Jackson: Yeah, but to your point, I'm sorry to interrupt, but to your point, like even today, if you're a really good business person, you're going to look at your supply chain and you're going to interview those folks and you're going to look beyond it and you're going to ask tough questions. Right? So it's not, this isn't something new. And if they're providing a good service, they're going to stay there.
Yorke Rhodes: That's right. Yeah. Then that's why I use the terms I did, right? If there's a value proposition for someone to be in your value chain, that's why they're there.
Reid Jackson: That's right.
Yorke Rhodes: So there are a chance even without jumping over or removing middlemen, there's still value in technology like blockchain because of the difficulties that have been demonstrated through things like, trying to get EDI implemented as an example of a sender. Right? It's been around since the 70s. And I think you're right about transparency and traceability. There's another term I would use, which you didn't say, which is how do we ensure that the appropriate parties have the necessary visibility, enhance their business while not providing visibility to others. And that falls from a technical perspective under a category called privacy. Right?
Yorke Rhodes: And so, when we design value chain networks, privacy and I always start actually with a data privacy matrix as one of the first exercises of the party's wait, is like what is the stuff that's okay for you to share with anybody? What's the stuff that's okay for you to share with just the end customer for example, like a retailer. What is the stuff that's okay to be shared with XYZ, right? Parties in this particular value chain, and that actually helps set the foundation around, okay, so if we know that this is the dataset that we need in order to improve the entire value chain, but we also know that certain data elements need to remain private, we have to implement that from a technical perspective. Right? And that is basically, from my perspective, it's actually quite helpful because it starts to get everybody who is participating in this discussion beyond their concerns about data privacy, right?
Yorke Rhodes: If we give them comfort that we are addressing that to a data privacy matrix discussion and that we have, we're very comfortable with the technology and we can show them that data privacy will be applied and implemented. Then it actually eases the follow on discussions, which are, okay, how do we figure out now how to actually get these things connected?
Reid Jackson: That's a good ... That's a great point. I mean it's a much bigger challenge than most people realize as you're going through it and first off, I just want to thank you again for your time here. We are running out of time and I have like a whole sheet of other questions I wanted to get you, but this conversation has just been amazing for me and I hope the listeners are appreciating it as well. But we do have to, we do have to wrap this up, but I want you to answer one final question for us. And the question is, what do you think is required of industry for blockchain to scale across industry? What do we have to do as members of the community for this to really start to hit mainstream? And our second second part to that is what timeline do you think we're at for it to be mainstream, middle of the road adopters?
Yorke Rhodes: Well, I think back to what I said before about democratizing technology, I think we've actually, at least from of a Microsoft perspective. We feel like we've gotten there because the conversations that we have with customers now are not so much about the underlying base protocol, but actually what's the problem I'm trying to solve? And so therefore the base protocol becomes somewhat less important if we can give them the characteristics of a solution to a problem they're trying to solve. I think that type of conversation for enterprises is dramatically accelerating. Right? And it is an accelerant to getting enterprises to go further and obviously there's going to continue to be, base protocol, advocates for a little while until we get to some kind of consolidation.
Yorke Rhodes: But in terms of where we see the conversations have turned to in the enterprise, and I think this is why we're seeing more CIO office conversations happening is it's just really like, okay, well if I'm trying to solve for the sustainability or VP of supply chain, a business problem and I use this technology sack, that seems to make sense to me and I can plug this into my existing systems with [inaudible 00:50:22], then I'm comfortable, right? And I can move forward. And so to me that is a very, actually positive signal for the next couple of years in terms of enterprise adoption. So, we're definitely seeing that from a, what I would call an accelerant perspective.
Reid Jackson: Awesome. Awesome. And what do you think the timeline is for blockchain and enterprise to be kind of mainstream? Right now we're early adopters. Is this a two year run, a five year run?
Yorke Rhodes: Okay. I never looked past two years because I think it's too hard in the blockchain world.
Reid Jackson: In ITA period.
Yorke Rhodes: Yeah. I do think, again we have enough examples in the market. So your point about early adopters and bleeding edge doctors that have proven the things that enterprises need to see proven there. So my feeling is that if we are in like the two to five year horizon for sure. Right? And so my message basically back to CIO's and enterprises, we're well beyond the question of the technology, right? It is now a question or ability to transform as an organization and to think about the opportunity to transform as an organization. And guess what, the organizations that we're in the future are the ones that don't sit out on the sideline now.
Reid Jackson: Yeah, no, I agree wholeheartedly with you there. I mean, the technology has been proven where we're kind of past that part. It's what's the reality, what's the applicability and what are the use cases that are going to give you an ROI?
Reid Jackson: Well, Yorke, I want to thank you again for being on the show today, there's so much more we could talk about, but this has really been a great conversation. I really appreciate it. Check out Yorke Rhodes, principal program manager, blockchain engineering at Microsoft Azure. We'll have information in our show notes here, more information about GS1, Microsoft and the blockchain offerings that they have. There'll be links there. There'll be information about our startup lab, where we're giving away another $10,000 to a startup, and to help them get access to GS1 members. We have over 330,000 in the US and we get you exposure to large corporations and ideas, and then vice versa. Get our members exposed to you guys, your startups that are out there. So look for that in the show notes as well. And until next time, thanks for listening. Appreciate it.
Episode Summary
Is blockchain scalable? How can it transform your organization? Hear from Yorke Rhodes III, Co-founder of Blockchain at Microsoft and Principal Program Manager Azure Blockchain Engineering, as he discusses the company's blockchain journey and how CIOs of today must recognize the value of blockchain in a way never seen before.
The views, information, or opinions expressed during DeCoded by GS1 US podcast series are solely those of the individuals involved and do not necessarily represent those of GS1 US, its employees or member companies. The podcast series is provided by GS1 US as a convenience and does not constitute or imply an endorsement, recommendation, or favoring by GS1 US of any of the identified companies, products, or services. GS1 US does not warrant or guarantee any of the products or services identified here, nor does it assume any legal liability or responsibility with respect to them.
About Yorke E. Rhodes III
Yorke E. Rhodes III is Co-founder of Blockchain @Microsoft and Principal Program Manager Azure Blockchain Engineering. He is a passionate technologist with broad interests, always drawn to the next shiny object. He earned a B.S. in Computer Science from NYU's Courant Institute of Mathematical Sciences. He has worked in industry for over 20 years, in enterprises such as Microsoft and IBM, and startups in wireless, mobile, digital marketing, and e-commerce. At Goldman Sachs Investment Bank he built their first wireless internet ingress and advised bankers in wireless, telecom, and media. As a young developer he saw the beginnings of client server databases, obscure languages like ada, lisp, and paradox, and the birth of the internet. Blockchain piqued his interest in the summer of 2015 with the launch of Ethereum. An Adjunct Professor at NYU, he has taught digital marketing, e-commerce and intrapreneurship.
About Reid Jackson
As Vice President, Corporate Development, Reid Jackson helps leads the investigation of new technologies, partnerships and business opportunities to increase the relevance and reach of GS1 Standards. Drawing on his extensive IT background and experience implementing solutions for both large and small corporations in retail, grocery, healthcare and manufacturing, Mr. Jackson helps lead the exploration of collaboration opportunities to help businesses leverage emerging technologies including the Internet of Things (IoT), blockchain, artificial intelligence, machine learning and computer vision.
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