The Business Case for Interoperability
Transmute believes that cross-vendor interoperability is critical for commercialization of decentralized identifier (DID) and verifiable credential (VC) technology. To interoperate means that a computer system or software has the ability to exchange and make use of data from a different system or software “via a common set of exchange formats.” But technical interoperability is difficult to achieve, and it’s definitely not the status quo when it comes to the systems our customers are using today. In fact, most of them are [frustratingly] locked into a single vendor when it comes to transaction management software — with no easy way to share data with parties in their ecosystem.
I’m often asked why we, as a start-up, would build so much out in the open. We aren’t afraid to put out the first reference implementation — although never without tests — because we’re keen to have a baseline to measure against and iterate on, especially when it comes to the technical foundations required for achieving interoperability. The more interesting question is why we work so hard to ensure interoperability with “competing” or ancillary DID-based products. The answer is that we view achieving interoperability as a requirement for market creation.
We are solving a business problem; achieving interoperability is a barrier to adoption.
As the world becomes increasingly hyperconnected, “connective tissue” products and services [like ride-shares, Slack, etc.] are in greater demand in order to bridge the last miles and information silos created between the multitude of disparate internet-enabled products and services we now rely on. For this product category, interoperability is required to create a market compelling enough to go after.
For instance, if you are loyal to a single ride-share brand today, your user experience suffers. It takes longer to find rides if you’re loyal, and transit time is a key metric in mobility. Additionally, a frustrating user experience limits adoption, and throws a major kink in customer retention. If riders have multiple apps and are willing to ride whatever brand is most convenient to them, their user experience massively improves, adoption accelerates, and the market expands for everyone. This example demonstrates market expansion due to interchangeability versus technical interoperability, but it highlights the same impact to customer adoption and retention given customers’ current attitude toward avoiding vendor lock-in.
Similarly, if my Texas issued digital driver license can’t be verified by my California-resident digital wallet, then I have not sufficiently solved the inefficiencies and traceability problems of physical licenses. In this scenario, a new, worse inconvenience is created since adoption of a solution that lacks interoperability means I’ll have to carry my physical license for interstate transit and my digital one. Furthermore, convincing state DMVs to offer a digital identity credential is a tremendous feat (it took Texas 3 legislative sessions to agree to a single pilot); imagine when you have to sell them on implementing 50 different versions. After all, my physical form Texas drivers license is already an acceptable identification credential across all 50 states.
One criticism of supply chain-focused solutions using blockchain is that in order to realize value, you have to convince all of the ecosystem players to adopt the same product — or at least the same technology stack. Not only is that a tough sell in terms of architecture investment (nobody wants to “rip-and-replace,” and everybody hates vendor lock-in), but it does not sufficiently address the data sharing challenges that logistics professionals face today. Efficiency gains are necessary, but not sufficient; customers want to share critical data in a provable form regardless of the underlying system.
If a brand uses software to create digital product credentials, but said credentials could not be effectively handed off to subsequent players in their supply chain, then the problem isn’t solved.
For Transmute, the foundations required to technically interoperate are considered pre-competitive, and our ability to interoperate widely is a strategic feature. This feature powers a competitive advantage that ensures Transmute customers’ critical trade documents are verifiable at every step in the supply chain, regardless of where they’re stored and what blockchain they’re anchored to. Transmute customers realize maximum confidence about data integrity and access far richer insights about the health of their supply chains as a result.
