What is Oracle's strategy?
Oracle is always looking into leveraging (disruptive) emerging technologies. They are currently investing in cloud and mobile integration, artificial intelligence (data analytics, conversational AI/chatbots, machine learning), and the Internet of Things (IoT). In the summer of 2017, Oracle cemented their interest in Blockchain, but as you will learn in a moment, they actually started investing in it at the beginning of 2016.
On May 31, 2016, a U.S. patent application under the registration number US 15/169,622 was filed by Maurice P. Herlihy and Mark S. Moir of Oracle Labs with the title Accountability and Trust in Distributed Ledger Systems. This was published on August 17, 2017 under number US20170236120 A1. The patent can be found at https://www.google.com/patents/US20170236120. The patent describes a distributed ledger system for enhanced accountability and trust. It is based on the ideas behind the open source consensus protocol Tendermint (https://tendermint.com/), which itself is based on the previously explained PBFT consensus. The following quote is a reference to sections 0056 to 0058 of the patent:
[0057] Ideally, a proposer should not be able to (1) pretend it has not received a transaction that it received, (2) control which received transactions to include in its proposed block, (3) control their order in the block, or (4) inject transactions ahead of those it has received. Any such attempt should result in undeniable proof of misbehavior, or at least produce evidence that can be accumulated and analyzed after-the-fact.
[0058] In some embodiments, fairness violations may be made much more difficult to achieve without detection by imposing deterministic rules governing the order in which transactions are propagated (making "missing" transactions apparent), which transactions are included in each proposed block, and the order in which they appear. This may be achieved by requiring nodes to regularly disclose auditable state information.
Just one week before the patent was published, on August 10, 2017, Oracle announced on their corporate blog that they had joined the Hyperledger consortium (https://blogs.oracle.com/cloud-platform/oracle-joins-hyperledger-consortium). Hyperledger is an open source global collaboration project hosted by the Linux foundation at https://hyperledger.org/. Its objective is to create advanced cross-industry blockchain technologies. The consortium includes leaders in finance, banking, technology (including the IoT), supply chain, and manufacturing. Oracle joined because they see the potential in the approach of the consortium in building blockchain technology using open source collaboration, modular architecture, horizontal/cross-industry technology support, and support for enterprise needs.
One of the projects developed by the consortium is Hyperledger Fabric. It is one of the blockchain framework implementations, and it can be used as a foundation for developing applications or solutions with a modular architecture. Fabric permits pluggable (plug-and-play) components, such as the consensus protocol and membership services, so your network can easily adjust to new technologies. Hyperledger Fabric leverages container technology to host smart contracts, the application logic of the system, called chaincode. Oracle is using it as the backbone for their own PAAS offering, Autonomous Blockchain Cloud Service (ABCS). Oracle's goal is to offer a more advanced and enterprise-level distributed ledger cloud platform that will differentiate it from its competitors. The platform might be an interesting offer for customers who are seeking to build new blockchain-based applications and/or extend their current SaaS, PaaS, IaaS, and on-premises applications. Oracle's focus is to strengthen the fundamental technology foundations of distributed ledgers, simplify and accelerate deployment of blockchains, and support customer use cases.
One of the main reasons why Oracle is investing in blockchain technology, and why I became interested in the technology in 2016, is due to the problems it can solve through cross-enterprise transactions. Some of these challenges that we need to deal with include the following:
- The lack of real-time information visibility within a trading ecosystem
- Error-prone information exchange and processes across enterprise boundaries
- The high cost and delays associated with offline reconciliations
- The high risk and costs associated with fraud in cross-company transactions
These issues can lead to a higher risk of legal settlements due to a poor ability to audit records and the accountability for actions owing to cross-ERP discrepancies. Normally, to avoid this, a trusted intermediary is used as a message broker to enable trust in peer-to-peer transactions, which, in return, brings about extra costs and the risk of data leakage.
From my personal experience with traditional B2B transactions and software used to perform such transactions, for example, Axway, I recognize these challenges and I'm convinced that blockchain can help overcome them. Traditional B2B transactions use a trusted intermediary to act as a message broker. This increases the challenge, since that broker can also make mistakes when routing messages. When messages get lost, you need to do manual research to determine what went wrong and why a message was not received or was rejected. So, instead of every entity having its own B2B gateway and point of truth for incoming and outgoing transactions, with blockchain you have one distributed ledger that holds a single point of truth that provides complete visibility and real-time information across your company's ecosystem.
Oracle's strategy is to build an easy-to-use DLT (Distributed Ledger Technology) cloud platform by pursuing the following objectives:
- It offers an industry-neutral and enterprise-ready permissioned, highly secure blockchain platform with built-in privacy and confidentiality to address needs including scalability, robustness, and performance. It also provides built-in backups and recoverability of the data.
- The platform makes it easy for you to deploy, configure, manage, and monitor your blockchain and reduce the cost of deploying and running an enterprise blockchain. The platform is a preassembled and ready-to-use, managed PaaS cloud solution, so that you, or any of your developers, can focus on the business logic behind the transactions.
- The platform provides tools and templates to start developing applications within minutes, which should accelerate the development and integration of blockchain applications by supporting API-driven development and facilitating quick experimentation of new business processes.
- It enables you to extend your enterprise ERP, SCM, and other business processes, including trade and accounting, to share data and conduct distributed transactions in a secure fashion with other organizations. The platform also offers built-in integrations with SaaS, PaaS, and on-premises applications, and can interact with other blockchain networks.
More information about Hyperledger Fabric can be found in Chapter 8, Ethereum Versus Hyperledger, or visit the Hyperledger website at https://hyperledger.org/projects/fabric.