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Report of IBM withdrawal from blockchain is wrong

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Last week Coindesk reported that “there is not really going to be a blockchain team any longer” at IBM. An IBM spokesperson branded the piece as “inaccurate”. 

Our research found that there were layoffs, but they will have limited impact on IBM’s blockchain activities, if at all. The blockchain consulting side continues to expand. That is evidenced by recent hires, current job ads, and an internal IBM email from the heads of the two IBM Blockchain teams circulated after the “misleading media reports”. The email states that “we wanted to reiterate that blockchain remains an important priority for the IBM Corporation.”

Staff cuts were within the IBM Cloud team, which houses IBM Blockchain Platform and Hyperledger Fabric. However, the vast majority of the layoffs were business people rather than developers, leaving the core substantially untouched.

The Coindesk article was based on reports by startups who were interviewing laid off staff plus former IBM team members who left years ago. Instead, we went directly to the source and targeted people who worked on the January Fabric release. 

To put the layoffs in context, one could view IBM’s blockchain activities in two buckets. Firstly, the development teams that focus on core technology and IBM owned applications like IBM Food Trust, which both sit within IBM Cloud. And secondly, Global Business Services (GBS), the consulting arm. 

What happened?

IBM recently merged the IBM Cloud blockchain teams with its supply chain area, IBM Sterling, which is also home to the IBM Food Trust project. On the one hand, housing the Fabric open-source team in this group may raise eyebrows as there’s significant scope for applications beyond supply chain. But some might say it’s a sign of maturity given that enterprise blockchain is just one aspect of a solution that will include IoT, ERP and other technology integrations.

Two weeks ago, every team within IBM Cloud that isn’t directly related to the ‘hybrid cloud’ strategy was told to cut 30-50% of their staff. Hence, IBM let go almost all of the non-technical blockchain staff in the IBM Cloud division, so marketing, finance, and ‘offering management’ which are like intra-preneurs. That’s also in part because the Sterling supply chain team already had plenty of personnel in those areas.

There were zero developers let go on IBM Platform. One Fabric developer was laid off as well as three other technical staff working on an enterprise security project. 

So in some ways, the Coindesk statement that “there is not really going to be a blockchain team any longer” is tenuously true because of the organization chart rejig. But it’s entirely false in terms of substance.

Meanwhile, Jerry Cuomo has been the blockchain team leader from the start and is now responsible for the whole of automation. This change was characterized as a sideways move, but it’s a massive promotion. In a December interview, Cuomo explained how blockchain plays a key role in his vision.

Fabric is still entirely dependent on IBM

For this article, to find current developers, we investigated the January Hyperledger Fabric release.

One of Hyperledger’s key features is its vibrant developer community. There’s the old bible saying ‘Give, and you shall receive’. But it seems like IBM is still doing an awful lot of giving. When it comes to Fabric, we were surprised to find the ongoing complete dependence on IBM.

79% of code commits came from the 13 most active people. Twelve of the 13 were IBMers and the thirteenth person was focused on documentation rather than code. While this could just be optics, one of our sources confirmed the ongoing dependence on IBM.

Apparently, there are active plans to broaden the Fabric developer base and perhaps the inaccurate IBM news might be a wake-up call. However, we’ve previously seen criticisms of R3 and its lack of a broad developer base from the Hyperledger community. At the time, the observations seemed reasonable, but now they ring a little hollow.