ORACLE AND LIVEPLEX - BRINGING WEB 3.0 BUSINESS MODELS TO ENTERPRISE CUSTOMERS
Liveplex: Hi everybody. We're back again with another episode of Metaphor Liveplex’s own podcast. And in this podcast, we normally talk about concepts in Web 3 and blockchain. We talk about how businesses are adopting it. We talk about new concepts. But today we have with us the Oracle, Mark Rakhmilevich. And Mark is going to talk to us about how Oracle looks at blockchain, how enterprises will be adopting blockchain, and how the partnership between Liveplex and Oracle is going to change the way businesses operate. So Mark, welcome to the show!
Mark: Thanks. Mara, thanks for having me.
Liveplex: Now let's talk about how Oracle is looking at blockchain as a product and how you think businesses are going to adopt it.
Mark: We have been looking at providing blockchain capabilities to our customers, and our customers, from Oracle's perspective, are large enterprises, government organizations, medium enterprises, and sometimes small enterprises. But companies—we are not a bit to see companies by any means. So when we started down this path, and this is going back over 5-6 years, we saw that the value proposition is that a company can join to do business transactions together and share data in a trusted ledger to solve the ecosystem challenges that you typically see with B2B transactions. The supply chain is a great example. There are a lot of inconsistencies and data reconciliation that happens after the fact, whether it's financial transactions, product inventory, shipments, product history, traceability, or provenance, This comes from many other things where companies have had to work together in the past, as this was usually done in an API driven manner. Point to point in the best cases. In the worst cases, this was done by exchanging spreadsheets that somebody had attached to an e-mail. It was very common for customers to extract data from their ERP system, maybe from their database, put it in spreadsheets, and send it to somebody else. Get an update as an e-mail response with a spreadsheet attached, and then go into this system and manually enter the data. So you have all of the challenges of the fact that the data was not verified. It created opportunities for human error, fraud, and mistyping. And at the end of the day, somebody had to get on the phone and reconcile things that didn't match. So we saw that as a great opportunity when we introduced our blockchain platform, which is enterprise-focused based on Hyperlogger Fabric from the Linux Foundation, in 2018, so it's been 6 years and so 5 years now, and we have a number of customers that have started to pass, and so enterprise blockchain has been a strong focus for us. But lately, we have seen some changes as well, and we can talk about how customers are beginning to think about Web 3 capabilities, the centralized capabilities, and take advantage of them, particularly in B2C enterprises but also in some B2B cases.
Liveplex: Absolutely. And we've seen that change through our process of selling Web 3 APIs as well. What we've seen is that there is a greater understanding of Web 3 and how it will solve a lot of bottlenecks that exist today in a Web 2 environment. Now, when customers approach you, I think a lot of them are still emerging to understand this technology. How does Oracle take it to the customer base? How do Oracle, and its teams position it with their legacy customers? Oracle's been around for many decades inside these accounts. But then, when you go and change the way these accounts are operating or tell them that there's a better way of operating, how do your businesses and these enterprises look at it?
Mark: Absolutely. So there are sort of two main approaches, I would say, that we see. There are customers who come to us because they are interested in doing things on the blockchain. They've already found some examples in the industry, maybe from their competitors. And they're curious about how they could get started in this space. So they might have some understanding and a use case in mind that's relevant to the industry. So that's a great starting point because it then helps them to explore that they have sort of this overall methodology that starts with the discovery, trying to understand the customer use case in mind, as well as educating them on what's happening relevant to the industry. Oracle operates across 20-30 industries, which is very broad. And so we try to be very vertically oriented in those conversations, and then we can help customers figure out how to do a design, or set of capabilities that blockchain can enable, integrate with the existing systems, create and own a board, create an ecosystem of partners, and so on. And that kind of evolves into building an actual prototype and MVP, perhaps, and taking it from there. There are other situations where we actually begin the conversation from our end by helping the customers visualize how a blockchain enable capability can solve the particular problems here. So they might have some issues with mismatches in the shipping information or in financial transactions. Let's say, a conglomerate that does a lot of intercompany transactions buys and sells different lines of business. We had a great example of a story that was actually publicized by General Electric based on the project on which we worked with them. They operate G Aviation, G Helds, G Power, and G Renewables. There are a lot of different businesses, and many of them buy and sell from each other and from corporations, to the tune of 4 million intercompany transactions a year. And they have a centralized system that they built on the mainframe-based 25 years ago to help manage that and reconcile because each of those lines of business has not one but multiple ERP systems. They all grew out of different companies, and they operate across the world. So there are separate legal entities, and aviation alone has 55-60 different legal entities around the world. So having those transactions all be available in the shared ledger and being able to reconcile portraits, doors, invoices, and whatever receipt information, shipping information, and, in the case of services, some kind of documentation around service delivery in a way that smart contracts can verify. They can check and make sure that it matches the company standards, and whatever intercompany agreements exist around particular transactions, amounts, dates—those kinds of things were very helpful. And so they actually started the conversation with them about modernizing that in the company building system. And we very quickly got to the point where it became clear that the distributed ledger and smart contracts were the best approaches for that. And so we went down the path and educated them on the capabilities and worked with the enterprise architects in the finance team, who were driving this primarily, to help implement. There are multiple ways of doing POCs and pilots, and all of that went into that exploratory process. So in some cases, we bring the concepts and the value proposition of the blockchain into the conversation, and we try to do that. Of course, from a product management perspective, I try to enable our sales teams around the world and business development folks to be capable of those conversations, share with them examples across different industries and types of use cases, and enable them to have a conversation with a customer. In other cases, the customer comes in and says, I have some interest in understanding better how to leverage blockchain, and I've done some research. Maybe I've tried something and it didn't quite work out because it's a complex technology. There are a lot of moving parts. So can you guys help me? I heard that articles were doing some things in that area.
Liveplex: Absolutely. And this has been a big challenge for everybody in this new industry. And you know, when I look at this, I think it is a digital transformation process, and there's a lot of consulting required to get the customer to not only experiment with new technology but also adapt to it. But when you see the results, the amount of money that they will save, the effort they will save, and how they will modernize their technology, and upgrade to what is possible by using technology. I think this is a great avenue for enterprises to look at. Now Oracle also offers its blockchain on-premises as well as in the cloud, and that is another big reason why we, as Liveplex, partnered with Oracle as well. Of course, there are so many blockchains, there's absolute interoperability, and Liveplex integrates with most blockchains that are public or private. However, the fundamental thing for Oracle is the flexibility, and ease with which a blockchain network can be created. How You can literally move into an open, interoperable, and multi-cloud blockchain as well, and, of course, the APIs work throughout the process.
Now Liveplex APIs integrate into the Oracle chain, and this is a partnership that we have led over the last few months, and now it's finally live. So, can we talk a little bit more about how you see this partnership growing? But also, how do you see enterprises benefiting from the new world of digital assets, and the new world of smart contracts?
Mark: Absolutely. So I just said flexibility and the use of adoption here have been sort of our mantra from day one. We want to make blockchain easy and quick, and simple to adopt. We want to make it easy for people to experiment with use cases. They need to be able to quickly, without a lot of cost or time, explore various things. So we've done a lot of work, whether it's local development tools that can automatically generate the smart contracts from specifications or ease of deployment as a managed service that takes you 10-15 minutes and you can set up the full environment in Oracle Cloud. It takes a little bit longer, perhaps using our on-premises version, which has a blockchain platform manager that kind of simulates a cloud environment. But you have to provide your own hardware, your own infrastructure, network connectivity, and all that, and you can bring the two of them together. You can operate in a hybrid mode where you have both on-premise nodes and cloud nodes, and different partners in the organizations in the ecosystem can decide how they operate. And even if they want to bring in a non-Oracle hypology fabric node, we can do that as well, and we can interoperate. This was one of our marquee highlights. When we launched in 2018, we said we would be interoperable with other high-pledge fabric nodes out there from other vendors and other clouds, and so multi-clouds have been there from day one. That flexibility is very important because companies operate in different ecosystems. Sometimes they have the ability to say, You're going to do things in a particular way because we're going to kind of mandate it. In other cases, they have to fit in with the IT preferences, clouds, etc. of their partners, and sometimes they operate in countries where data sovereignty requirements do not allow them to go into a public cloud in another country. So Oracle cloud infrastructure is now available in something like 40 regions around the world. But there are 150-160 countries. So we're not in every country, and some countries say that you have to deploy the data and blockchain nodes locally for data sovereignty requirements. You can link it to us and know it's in other countries; it has to be local here. So we have this on-premise capability as well. So all of those things are meant to remove the barriers.
When we want customers to think about blockchain technology, we want them to think about the use case and the value proposition. And we'll take care of removing all of the barriers and complexity, simplifying this, and setting up the environment for them. Whether it's on-premises, or in the cloud, they even started with Party Cloud. For that matter, one of the interesting things that we have seen is that as we started removing a lot of barriers from an infrastructure perspective, but the remaining barrier has always been the complexity of creating applications. So let's say I got those infrastructures, they're great, scalable, and performant, I can do it hybrid, or I can deploy it in the Oracle cloud. Whatever that means, I can expand my ecosystem partners. How am I going to get value without having an application sitting on top of the blockchain and doing something specific to the industry? I mean, whether it's a supply chain or other things, we began seeing the concept of digital assets. Portable digital assets and tokens have essentially become really important in the last couple of years from an enterprise perspective because they see that as a way to standardize approaches. What is a token? It's basically a way to represent certain objects in a digital world on the blockchain, and have certain masses at the standard. You can mint it, burn it, or transfer it, but it's fungible or nonfungible in certain operations. So you can essentially take an approach, as I'm going to treat some document exchange using NFT tokens because I like what NFT tokens provide out-of-the-box, and then whatever delta I have to customize on top of that for my document exchange is minimal. We have examples of doing that.
There is a project rolling out in India right now in the trade finance space called Secure Document Exchange. We're working with Robert Borsch, some local companies in India, and some banks that are using essentially our NFT implementation to create a document exchange for trade finance. So banks can exchange documents that they used to exchange on paper before. There are other cases where somebody wants to monetize certain transactions, creating an ecosystem, and they want to charge for services. Our blocking platform does not support transaction-based pricing. We have it based on the consumption of the size and the scale of the number of cores that you deploy. But some customers want to operate their network and charge, so they use the fungible token support that we've created on top of the Hyper Ledger fabric to be able to monetize the services cost and charge and then apportion the charges across different participants. There are also perfect examples, in central bank digital currency, which is another area where we participate. It's all based on fungible tokens, and digital currency is created based on that under the auspices of the central bank. Working with commercial banks in an intercompany use case, so we're beginning to see the importance of tokenization as an enabler of doing things in the most standardized way, and standardized really means it's cheaper, easier, and faster, and you can get people to get around it by understanding the concept because they already understand the tokenization, and you can help developers and add value in those unique areas, rather than worrying about how to represent the data, how to make sure everybody calls the same methods, and all of that is built into the work capability. So what Liveplex brings to this partnership is another set of APIs and capabilities that standardize how you manage NFTs and how you create and set up an NFT platform. And then you can add immersive capabilities in the metaverse as well, for various use cases. And so that's how we're together working to make it easier, ultimately, for enterprises to stand up solutions around NFT platforms and metaverse capabilities in a variety of areas, whether it's fan engagement or custom engagement loyalty and rewards programs. It's a great case of tokenization, and many companies that have traditionally been very strong in loyalty and rewards are leveraging tokenization to support multi-brand loyalty. Systems where you can easily exchange loyalty points online. You don't have to wait 60 days for your loyalty points from one company to show up in another company's balance. And you can then extend that to create, for example, NFT-based rewards for certain levels of achievement in the loyalty program, rewards for certain amounts of spending, or other things that are becoming very popular. Access to events, special VIP passes—it's a very broad and, I think, very open-ended world out there when it comes to using organizations.
Liveplex: Absolutely. And we have together approached many, many such business verticals. For example, we approach media and entertainment with loyalty rewards. We approach corporate training as a separate model. Utilities are a very big example of how to integrate and how the future of utilities is going to be driven through exchanges based on blockchain. Telcos, of course; in the fashion industry, we have e-sports gaming, which is again game-fi in a future where interoperability and digital assets can be taken out of the game and owned. And IP managed insurance is another such vertical that we're looking at in a very subjective way but also in a way that innovates the insurance processes by using smart contracts, digitization, and tokenization. Healthcare, real estate, and retail are other big examples of how you can not only manage the supply chain in retail but also develop immersive experiences for customers wherever they are in the world. The public sector, again, is another big example, as is hospitality, and education, but one of the biggest ones has also been banking and finance, as we said with currencies, with the development of immersive lounges for banks. But also virtual branches, which is the future of banking and finance, a bank that's available all the time with AI assistance.
Mark: And there is sort of this interesting concept that we've seen about embedded banking. So Oracle provides a lot of applications, ERP systems, point of sale, supply chain management, and on and on. And many of them at some point involve a financial transaction. So we've been working with a lot of banks to basically have a bank inside the application and embedded through APIs. Financial services and the partners and banks to do that. We're now beginning to see something analogous from a metaverse perspective, where certain banks in some countries want to be able to exist as virtual branches and not just stand alone. But for example, there is a conversational approach going on. There's a bank in India that wants a virtual bank in every car dealership in the country. So they become embedded in a car dealership. So there are virtual branch avatars, and basically, they can go in and set up their car loan and other things, or they want to be embedded in every real estate office. So you're buying a house, and there is a virtual bank right there to help. You do not just go into the portal and have to figure out how to navigate and what options are available, but you have a more immersive guided experience with an avatar that can take you through, whether it's using high capabilities or sometimes human-assisted stuff to actually be present there. So you're just expanding the reach and taking those things that you used to think of as standalone and making them more embedded.
Liveplex: Absolutely. And we've seen this happen. We've seen this change come through with a lot of customers, and a lot of business enterprises don't want to be labeled as being behind the curve in terms of technology. And the more enterprises we talk to together and otherwise, the more we feel that everybody wants to be here but doesn't have a path to be here. And I think what our partnership does together is that we are actually not only consulting them on that path but also bringing them to a very easy way of moving to Web 3. Mark, How do you think the adoption is going to be? Is it going to be as slow as Web 1 to Web 2 was, or is this going to be accelerated because our world has changed after the pending?
Mark: No, the world has definitely changed. I mean, we have seen, you know, as a result of the pandemic, people working remotely and so on. A lot of digital transformation initiatives that had a kind of 10-year vision got compressed into 1 or 2 years. So we are much for the head as a result of that, you know, but I think it's going to depend on industry by industry. Some industries tend to be more innovative. For example, if you look at financial services, they always need a very competitive environment. So they know by definition they have to be extremely innovative, and they have to really cater to sort of the new generation, right? I'm at the beginning of talking to people.
Liveplex: Absolutely, and what we've seen with banking and finance as an industry is that a lot of innovation has happened in banking and finance over the last 4 to 5 years, but none of it has been in banks. All the innovation has happened with startups that are actually not real banks.
Mark: Yeah, absolutely. And some banks say that there's a threat. So they want to outcompete fintech. Sometimes they want to buy them, incorporate them, and so on. But the younger generation has two daughters who have grown out of the house; they're working, and so on. And they have their financial lives, but they've never stepped inside a bank branch. They've never been physically in the bank branch.
Liveplex: 62% of Gen. Z consumers do not have a bank account.
Mark: Well, okay, that's even worse. So they basically do things you know with Zaps and you know Venmos and you know Zella exactly and so on.
Liveplex: Exactly; that's where they store and use the money. That's how they do finance.
Mark: Exactly! So that's where I think, you know banks want to reach out to their generation and offer services that will be compelling and that's where some of the, you know, website capabilities come in. Immersive capabilities are going to be important in customer service and those kinds of customer onboarding. And I think what we're going to see is an increase when it comes to content digitization and standardized means of managing content, distributing content, sharing content, monetizing content, and so on. And so it is for B2C companies that live and die by content. And it's not just media and entertainment; there is a lot of content in other B2C industries or B2C-focused companies that are increasingly going to have to be present there as part of that world.
So tokenization is important, and centralized identity in other areas is going to be quite important. We're beginning to do some work and see some strong interest. And interestingly enough, that is coming not only from organizations that you would expect, in the BTC space but also from government organizations at the state level. There are some initiatives that we recently worked on around centralized identity, validating credentials, and all of that stuff.
An effort going on, for example, in the state of Utah that recently got approved through the legislative process over the spring is going to be going forward, creating some capabilities in that space and many others. So we also begin to see how enterprises want to bring those capabilities into their own environments, and even in B2B situations, they begin to see value in using Web 3. Tokenization is a great example of a token in a product organization. So, for example, if you have a production chain that may be outsourced or certain ingredients being used to create an intermediate product, another intermediate product, and ultimately some final products. We have a company we're working with right now in the textile space, and there are multiple steps involved, but from the time zero ingredients become a finished product you buy in the store. A garment of some sort. And they want to track that because it provides certified materials and they collect royalties as part of the process, but they want to be able to track it on a blockchain and have visibility, or was it a process? And there are multiple companies, and multiple organizations involved in creating what are essential product tokens that allow them to transform and consume. And that helps with traceability, that helps with financial record keeping, and so on.
We're beginning to see that there is a case in Europe where the Ministry of Defense is looking to track some parts going into the next generation, of jets, and in the production and design process. They want to hear about the full traceability of all the components and where they came from. My people are now very conscious of sourcing, and the countries they depend on. So they want to make sure that they have traceability. If you can't trace it, you can't measure it, and you can't manage it right. So managing it is very critical now for all kinds of reasons, including national priorities, national security reasons, and the like. Sustainability, and ethical sourcing, are other cases if you can trace things. And again, tokenization is a great way to trace raw materials and then finish products. That's becoming important, particularly not a motive industry, but for many other electric vehicle batteries, for example.
Liveplex: With the retailer, they want to ensure that even every element of their supply chain is traceable so that not only can they manage the temperature using IT devices linked to the blockchain, but they can also manage the shelf life of the food products that come to them through various supply chain mechanisms. So there are so many big examples of how people are using the blockchain, tokenization, and Web 3. But honestly, for any enterprise with the need to efficiently manage its records, performance, or data. Securely store it. Access it. Ensure data integrity and confidentiality. Manage data flows. Automate repetitive tasks using smart contracts. This could just free up a lot of company time and make the entire process very efficient and transparent. And that's exactly what every enterprise is striving to do. But cutting costs is making efficient processes happen, and I think blockchain is the way forward for businesses to really optimize their resources.
Mark: Right, absolutely. Now I agree very much. We have seen transformations inside companies, ERP systems, enterprise resource planning, and the like, and that helps you automate the processes inside the company. But companies now don't work by themselves. They are so dependent on the ecosystem, distributors, suppliers, and everybody else, and insurance companies and what have you, financial services, all of that is so dependent that just being able to manage well inside the company is not good enough. You now need to be able to manage across your ecosystem and all of your partners. And that's where blockchain, distributed ledger technologies, and tokenization come in and provide some very strong capabilities.
Liveplex: So here we are with this week's podcast with Mark Rakhmilevich from Oracle, and we've spoken about how blockchain can really transform business processes and make it more efficient, and how Liveplex and Oracle together approach the market to create this partnership. That's a win-win not only for us but also for anybody that works with us in the enterprise space because we end up helping enterprises reduce costs and optimize their processes using the technology. That is not only going to be a new technology, but it's going to be transformative in a very new realm and how the customers, your customers of tomorrow, are going to approach the brands that they work with because the customers of tomorrow not only want their data secure, but they also want the flexibility of their metaverses to be interoperable. They want privacy and security, and they want to be able to walk into immersive experiences that are working, and they support brands that have a commitment to data security and privacy. So all of that is possible using Web 3 technologies.
Mark: Right. Thanks. Thank you so much. I appreciate it.
Liveplex: Thank you. It is absolutely our pleasure, and we hope to work with you more on
a win-win situation for not only ourselves but our customers as well.
Mark: Yeah, absolutely. I mean, at the end of the day, you know, the customers have to see some tangible benefits, right? This is not just something you play with and explore as an educational experience. It has to be some real ROI, some win-win for the customers and their partners in the ecosystem.
Liveplex: Absolutely. And that's basically what blockchain really brings to the table always.
Alright, thanks. Thank you.
Mark: Thanks. Mara, thanks for having me.
Liveplex: Now let's talk about how Oracle is looking at blockchain as a product and how you think businesses are going to adopt it.
Mark: We have been looking at providing blockchain capabilities to our customers, and our customers, from Oracle's perspective, are large enterprises, government organizations, medium enterprises, and sometimes small enterprises. But companies—we are not a bit to see companies by any means. So when we started down this path, and this is going back over 5-6 years, we saw that the value proposition is that a company can join to do business transactions together and share data in a trusted ledger to solve the ecosystem challenges that you typically see with B2B transactions. The supply chain is a great example. There are a lot of inconsistencies and data reconciliation that happens after the fact, whether it's financial transactions, product inventory, shipments, product history, traceability, or provenance, This comes from many other things where companies have had to work together in the past, as this was usually done in an API driven manner. Point to point in the best cases. In the worst cases, this was done by exchanging spreadsheets that somebody had attached to an e-mail. It was very common for customers to extract data from their ERP system, maybe from their database, put it in spreadsheets, and send it to somebody else. Get an update as an e-mail response with a spreadsheet attached, and then go into this system and manually enter the data. So you have all of the challenges of the fact that the data was not verified. It created opportunities for human error, fraud, and mistyping. And at the end of the day, somebody had to get on the phone and reconcile things that didn't match. So we saw that as a great opportunity when we introduced our blockchain platform, which is enterprise-focused based on Hyperlogger Fabric from the Linux Foundation, in 2018, so it's been 6 years and so 5 years now, and we have a number of customers that have started to pass, and so enterprise blockchain has been a strong focus for us. But lately, we have seen some changes as well, and we can talk about how customers are beginning to think about Web 3 capabilities, the centralized capabilities, and take advantage of them, particularly in B2C enterprises but also in some B2B cases.
Liveplex: Absolutely. And we've seen that change through our process of selling Web 3 APIs as well. What we've seen is that there is a greater understanding of Web 3 and how it will solve a lot of bottlenecks that exist today in a Web 2 environment. Now, when customers approach you, I think a lot of them are still emerging to understand this technology. How does Oracle take it to the customer base? How do Oracle, and its teams position it with their legacy customers? Oracle's been around for many decades inside these accounts. But then, when you go and change the way these accounts are operating or tell them that there's a better way of operating, how do your businesses and these enterprises look at it?
Mark: Absolutely. So there are sort of two main approaches, I would say, that we see. There are customers who come to us because they are interested in doing things on the blockchain. They've already found some examples in the industry, maybe from their competitors. And they're curious about how they could get started in this space. So they might have some understanding and a use case in mind that's relevant to the industry. So that's a great starting point because it then helps them to explore that they have sort of this overall methodology that starts with the discovery, trying to understand the customer use case in mind, as well as educating them on what's happening relevant to the industry. Oracle operates across 20-30 industries, which is very broad. And so we try to be very vertically oriented in those conversations, and then we can help customers figure out how to do a design, or set of capabilities that blockchain can enable, integrate with the existing systems, create and own a board, create an ecosystem of partners, and so on. And that kind of evolves into building an actual prototype and MVP, perhaps, and taking it from there. There are other situations where we actually begin the conversation from our end by helping the customers visualize how a blockchain enable capability can solve the particular problems here. So they might have some issues with mismatches in the shipping information or in financial transactions. Let's say, a conglomerate that does a lot of intercompany transactions buys and sells different lines of business. We had a great example of a story that was actually publicized by General Electric based on the project on which we worked with them. They operate G Aviation, G Helds, G Power, and G Renewables. There are a lot of different businesses, and many of them buy and sell from each other and from corporations, to the tune of 4 million intercompany transactions a year. And they have a centralized system that they built on the mainframe-based 25 years ago to help manage that and reconcile because each of those lines of business has not one but multiple ERP systems. They all grew out of different companies, and they operate across the world. So there are separate legal entities, and aviation alone has 55-60 different legal entities around the world. So having those transactions all be available in the shared ledger and being able to reconcile portraits, doors, invoices, and whatever receipt information, shipping information, and, in the case of services, some kind of documentation around service delivery in a way that smart contracts can verify. They can check and make sure that it matches the company standards, and whatever intercompany agreements exist around particular transactions, amounts, dates—those kinds of things were very helpful. And so they actually started the conversation with them about modernizing that in the company building system. And we very quickly got to the point where it became clear that the distributed ledger and smart contracts were the best approaches for that. And so we went down the path and educated them on the capabilities and worked with the enterprise architects in the finance team, who were driving this primarily, to help implement. There are multiple ways of doing POCs and pilots, and all of that went into that exploratory process. So in some cases, we bring the concepts and the value proposition of the blockchain into the conversation, and we try to do that. Of course, from a product management perspective, I try to enable our sales teams around the world and business development folks to be capable of those conversations, share with them examples across different industries and types of use cases, and enable them to have a conversation with a customer. In other cases, the customer comes in and says, I have some interest in understanding better how to leverage blockchain, and I've done some research. Maybe I've tried something and it didn't quite work out because it's a complex technology. There are a lot of moving parts. So can you guys help me? I heard that articles were doing some things in that area.
Liveplex: Absolutely. And this has been a big challenge for everybody in this new industry. And you know, when I look at this, I think it is a digital transformation process, and there's a lot of consulting required to get the customer to not only experiment with new technology but also adapt to it. But when you see the results, the amount of money that they will save, the effort they will save, and how they will modernize their technology, and upgrade to what is possible by using technology. I think this is a great avenue for enterprises to look at. Now Oracle also offers its blockchain on-premises as well as in the cloud, and that is another big reason why we, as Liveplex, partnered with Oracle as well. Of course, there are so many blockchains, there's absolute interoperability, and Liveplex integrates with most blockchains that are public or private. However, the fundamental thing for Oracle is the flexibility, and ease with which a blockchain network can be created. How You can literally move into an open, interoperable, and multi-cloud blockchain as well, and, of course, the APIs work throughout the process.
Now Liveplex APIs integrate into the Oracle chain, and this is a partnership that we have led over the last few months, and now it's finally live. So, can we talk a little bit more about how you see this partnership growing? But also, how do you see enterprises benefiting from the new world of digital assets, and the new world of smart contracts?
Mark: Absolutely. So I just said flexibility and the use of adoption here have been sort of our mantra from day one. We want to make blockchain easy and quick, and simple to adopt. We want to make it easy for people to experiment with use cases. They need to be able to quickly, without a lot of cost or time, explore various things. So we've done a lot of work, whether it's local development tools that can automatically generate the smart contracts from specifications or ease of deployment as a managed service that takes you 10-15 minutes and you can set up the full environment in Oracle Cloud. It takes a little bit longer, perhaps using our on-premises version, which has a blockchain platform manager that kind of simulates a cloud environment. But you have to provide your own hardware, your own infrastructure, network connectivity, and all that, and you can bring the two of them together. You can operate in a hybrid mode where you have both on-premise nodes and cloud nodes, and different partners in the organizations in the ecosystem can decide how they operate. And even if they want to bring in a non-Oracle hypology fabric node, we can do that as well, and we can interoperate. This was one of our marquee highlights. When we launched in 2018, we said we would be interoperable with other high-pledge fabric nodes out there from other vendors and other clouds, and so multi-clouds have been there from day one. That flexibility is very important because companies operate in different ecosystems. Sometimes they have the ability to say, You're going to do things in a particular way because we're going to kind of mandate it. In other cases, they have to fit in with the IT preferences, clouds, etc. of their partners, and sometimes they operate in countries where data sovereignty requirements do not allow them to go into a public cloud in another country. So Oracle cloud infrastructure is now available in something like 40 regions around the world. But there are 150-160 countries. So we're not in every country, and some countries say that you have to deploy the data and blockchain nodes locally for data sovereignty requirements. You can link it to us and know it's in other countries; it has to be local here. So we have this on-premise capability as well. So all of those things are meant to remove the barriers.
When we want customers to think about blockchain technology, we want them to think about the use case and the value proposition. And we'll take care of removing all of the barriers and complexity, simplifying this, and setting up the environment for them. Whether it's on-premises, or in the cloud, they even started with Party Cloud. For that matter, one of the interesting things that we have seen is that as we started removing a lot of barriers from an infrastructure perspective, but the remaining barrier has always been the complexity of creating applications. So let's say I got those infrastructures, they're great, scalable, and performant, I can do it hybrid, or I can deploy it in the Oracle cloud. Whatever that means, I can expand my ecosystem partners. How am I going to get value without having an application sitting on top of the blockchain and doing something specific to the industry? I mean, whether it's a supply chain or other things, we began seeing the concept of digital assets. Portable digital assets and tokens have essentially become really important in the last couple of years from an enterprise perspective because they see that as a way to standardize approaches. What is a token? It's basically a way to represent certain objects in a digital world on the blockchain, and have certain masses at the standard. You can mint it, burn it, or transfer it, but it's fungible or nonfungible in certain operations. So you can essentially take an approach, as I'm going to treat some document exchange using NFT tokens because I like what NFT tokens provide out-of-the-box, and then whatever delta I have to customize on top of that for my document exchange is minimal. We have examples of doing that.
There is a project rolling out in India right now in the trade finance space called Secure Document Exchange. We're working with Robert Borsch, some local companies in India, and some banks that are using essentially our NFT implementation to create a document exchange for trade finance. So banks can exchange documents that they used to exchange on paper before. There are other cases where somebody wants to monetize certain transactions, creating an ecosystem, and they want to charge for services. Our blocking platform does not support transaction-based pricing. We have it based on the consumption of the size and the scale of the number of cores that you deploy. But some customers want to operate their network and charge, so they use the fungible token support that we've created on top of the Hyper Ledger fabric to be able to monetize the services cost and charge and then apportion the charges across different participants. There are also perfect examples, in central bank digital currency, which is another area where we participate. It's all based on fungible tokens, and digital currency is created based on that under the auspices of the central bank. Working with commercial banks in an intercompany use case, so we're beginning to see the importance of tokenization as an enabler of doing things in the most standardized way, and standardized really means it's cheaper, easier, and faster, and you can get people to get around it by understanding the concept because they already understand the tokenization, and you can help developers and add value in those unique areas, rather than worrying about how to represent the data, how to make sure everybody calls the same methods, and all of that is built into the work capability. So what Liveplex brings to this partnership is another set of APIs and capabilities that standardize how you manage NFTs and how you create and set up an NFT platform. And then you can add immersive capabilities in the metaverse as well, for various use cases. And so that's how we're together working to make it easier, ultimately, for enterprises to stand up solutions around NFT platforms and metaverse capabilities in a variety of areas, whether it's fan engagement or custom engagement loyalty and rewards programs. It's a great case of tokenization, and many companies that have traditionally been very strong in loyalty and rewards are leveraging tokenization to support multi-brand loyalty. Systems where you can easily exchange loyalty points online. You don't have to wait 60 days for your loyalty points from one company to show up in another company's balance. And you can then extend that to create, for example, NFT-based rewards for certain levels of achievement in the loyalty program, rewards for certain amounts of spending, or other things that are becoming very popular. Access to events, special VIP passes—it's a very broad and, I think, very open-ended world out there when it comes to using organizations.
Liveplex: Absolutely. And we have together approached many, many such business verticals. For example, we approach media and entertainment with loyalty rewards. We approach corporate training as a separate model. Utilities are a very big example of how to integrate and how the future of utilities is going to be driven through exchanges based on blockchain. Telcos, of course; in the fashion industry, we have e-sports gaming, which is again game-fi in a future where interoperability and digital assets can be taken out of the game and owned. And IP managed insurance is another such vertical that we're looking at in a very subjective way but also in a way that innovates the insurance processes by using smart contracts, digitization, and tokenization. Healthcare, real estate, and retail are other big examples of how you can not only manage the supply chain in retail but also develop immersive experiences for customers wherever they are in the world. The public sector, again, is another big example, as is hospitality, and education, but one of the biggest ones has also been banking and finance, as we said with currencies, with the development of immersive lounges for banks. But also virtual branches, which is the future of banking and finance, a bank that's available all the time with AI assistance.
Mark: And there is sort of this interesting concept that we've seen about embedded banking. So Oracle provides a lot of applications, ERP systems, point of sale, supply chain management, and on and on. And many of them at some point involve a financial transaction. So we've been working with a lot of banks to basically have a bank inside the application and embedded through APIs. Financial services and the partners and banks to do that. We're now beginning to see something analogous from a metaverse perspective, where certain banks in some countries want to be able to exist as virtual branches and not just stand alone. But for example, there is a conversational approach going on. There's a bank in India that wants a virtual bank in every car dealership in the country. So they become embedded in a car dealership. So there are virtual branch avatars, and basically, they can go in and set up their car loan and other things, or they want to be embedded in every real estate office. So you're buying a house, and there is a virtual bank right there to help. You do not just go into the portal and have to figure out how to navigate and what options are available, but you have a more immersive guided experience with an avatar that can take you through, whether it's using high capabilities or sometimes human-assisted stuff to actually be present there. So you're just expanding the reach and taking those things that you used to think of as standalone and making them more embedded.
Liveplex: Absolutely. And we've seen this happen. We've seen this change come through with a lot of customers, and a lot of business enterprises don't want to be labeled as being behind the curve in terms of technology. And the more enterprises we talk to together and otherwise, the more we feel that everybody wants to be here but doesn't have a path to be here. And I think what our partnership does together is that we are actually not only consulting them on that path but also bringing them to a very easy way of moving to Web 3. Mark, How do you think the adoption is going to be? Is it going to be as slow as Web 1 to Web 2 was, or is this going to be accelerated because our world has changed after the pending?
Mark: No, the world has definitely changed. I mean, we have seen, you know, as a result of the pandemic, people working remotely and so on. A lot of digital transformation initiatives that had a kind of 10-year vision got compressed into 1 or 2 years. So we are much for the head as a result of that, you know, but I think it's going to depend on industry by industry. Some industries tend to be more innovative. For example, if you look at financial services, they always need a very competitive environment. So they know by definition they have to be extremely innovative, and they have to really cater to sort of the new generation, right? I'm at the beginning of talking to people.
Liveplex: Absolutely, and what we've seen with banking and finance as an industry is that a lot of innovation has happened in banking and finance over the last 4 to 5 years, but none of it has been in banks. All the innovation has happened with startups that are actually not real banks.
Mark: Yeah, absolutely. And some banks say that there's a threat. So they want to outcompete fintech. Sometimes they want to buy them, incorporate them, and so on. But the younger generation has two daughters who have grown out of the house; they're working, and so on. And they have their financial lives, but they've never stepped inside a bank branch. They've never been physically in the bank branch.
Liveplex: 62% of Gen. Z consumers do not have a bank account.
Mark: Well, okay, that's even worse. So they basically do things you know with Zaps and you know Venmos and you know Zella exactly and so on.
Liveplex: Exactly; that's where they store and use the money. That's how they do finance.
Mark: Exactly! So that's where I think, you know banks want to reach out to their generation and offer services that will be compelling and that's where some of the, you know, website capabilities come in. Immersive capabilities are going to be important in customer service and those kinds of customer onboarding. And I think what we're going to see is an increase when it comes to content digitization and standardized means of managing content, distributing content, sharing content, monetizing content, and so on. And so it is for B2C companies that live and die by content. And it's not just media and entertainment; there is a lot of content in other B2C industries or B2C-focused companies that are increasingly going to have to be present there as part of that world.
So tokenization is important, and centralized identity in other areas is going to be quite important. We're beginning to do some work and see some strong interest. And interestingly enough, that is coming not only from organizations that you would expect, in the BTC space but also from government organizations at the state level. There are some initiatives that we recently worked on around centralized identity, validating credentials, and all of that stuff.
An effort going on, for example, in the state of Utah that recently got approved through the legislative process over the spring is going to be going forward, creating some capabilities in that space and many others. So we also begin to see how enterprises want to bring those capabilities into their own environments, and even in B2B situations, they begin to see value in using Web 3. Tokenization is a great example of a token in a product organization. So, for example, if you have a production chain that may be outsourced or certain ingredients being used to create an intermediate product, another intermediate product, and ultimately some final products. We have a company we're working with right now in the textile space, and there are multiple steps involved, but from the time zero ingredients become a finished product you buy in the store. A garment of some sort. And they want to track that because it provides certified materials and they collect royalties as part of the process, but they want to be able to track it on a blockchain and have visibility, or was it a process? And there are multiple companies, and multiple organizations involved in creating what are essential product tokens that allow them to transform and consume. And that helps with traceability, that helps with financial record keeping, and so on.
We're beginning to see that there is a case in Europe where the Ministry of Defense is looking to track some parts going into the next generation, of jets, and in the production and design process. They want to hear about the full traceability of all the components and where they came from. My people are now very conscious of sourcing, and the countries they depend on. So they want to make sure that they have traceability. If you can't trace it, you can't measure it, and you can't manage it right. So managing it is very critical now for all kinds of reasons, including national priorities, national security reasons, and the like. Sustainability, and ethical sourcing, are other cases if you can trace things. And again, tokenization is a great way to trace raw materials and then finish products. That's becoming important, particularly not a motive industry, but for many other electric vehicle batteries, for example.
Liveplex: With the retailer, they want to ensure that even every element of their supply chain is traceable so that not only can they manage the temperature using IT devices linked to the blockchain, but they can also manage the shelf life of the food products that come to them through various supply chain mechanisms. So there are so many big examples of how people are using the blockchain, tokenization, and Web 3. But honestly, for any enterprise with the need to efficiently manage its records, performance, or data. Securely store it. Access it. Ensure data integrity and confidentiality. Manage data flows. Automate repetitive tasks using smart contracts. This could just free up a lot of company time and make the entire process very efficient and transparent. And that's exactly what every enterprise is striving to do. But cutting costs is making efficient processes happen, and I think blockchain is the way forward for businesses to really optimize their resources.
Mark: Right, absolutely. Now I agree very much. We have seen transformations inside companies, ERP systems, enterprise resource planning, and the like, and that helps you automate the processes inside the company. But companies now don't work by themselves. They are so dependent on the ecosystem, distributors, suppliers, and everybody else, and insurance companies and what have you, financial services, all of that is so dependent that just being able to manage well inside the company is not good enough. You now need to be able to manage across your ecosystem and all of your partners. And that's where blockchain, distributed ledger technologies, and tokenization come in and provide some very strong capabilities.
Liveplex: So here we are with this week's podcast with Mark Rakhmilevich from Oracle, and we've spoken about how blockchain can really transform business processes and make it more efficient, and how Liveplex and Oracle together approach the market to create this partnership. That's a win-win not only for us but also for anybody that works with us in the enterprise space because we end up helping enterprises reduce costs and optimize their processes using the technology. That is not only going to be a new technology, but it's going to be transformative in a very new realm and how the customers, your customers of tomorrow, are going to approach the brands that they work with because the customers of tomorrow not only want their data secure, but they also want the flexibility of their metaverses to be interoperable. They want privacy and security, and they want to be able to walk into immersive experiences that are working, and they support brands that have a commitment to data security and privacy. So all of that is possible using Web 3 technologies.
Mark: Right. Thanks. Thank you so much. I appreciate it.
Liveplex: Thank you. It is absolutely our pleasure, and we hope to work with you more on
a win-win situation for not only ourselves but our customers as well.
Mark: Yeah, absolutely. I mean, at the end of the day, you know, the customers have to see some tangible benefits, right? This is not just something you play with and explore as an educational experience. It has to be some real ROI, some win-win for the customers and their partners in the ecosystem.
Liveplex: Absolutely. And that's basically what blockchain really brings to the table always.
Alright, thanks. Thank you.