VMware is getting closer to commercializing its research project that uses blockchain distributed ledger technology. In an interview with SDxCentral, VMware Chief Research Officer David Tennenhouse said the company will likely trial the technology with a small group of customers in 2018.

VMware first revealed that its research department was working on a blockchain prototype at its VMworld 2017 conference earlier this year. At the time, Tennenhouse hinted that the technology could become a new business area for the company.

VMware has been conducting research on blockchain for the past three years. Last May, it appointed VMware veteran Michael DiPetrillo as senior director of blockchain and tasked him with determining how the company might develop blockchain into a proof-of-concept (PoC) project for customers.

DiPetrillo said the problem VMware is hoping to solve with blockchain involves scenarios where some type of third party is needed to federate information or data. For example, telecom companies that have to share customer phone records for portability use a third party to moderate and handle those records. “But that adds latency to the whole process,” DiPetrillo said. “And it adds costs to the customer.”

Instead, blockchain technology could be used as a foundation topped with software and systems so that whenever a company needs to federate information or data with another company, it could instead use blockchain.

But Tennenhouse and DiPetrillo admit there are still a lot of questions about how blockchain will work in this scenario. For example, which parties will be able to add to the blockchain? Will it require certain permissions? And how can VMware avoid some of the downfalls of blockchain; such as making sure that it doesn’t result in compute cycles that waste energy, make the network “chatty,” and drive up costs.

“We think we have solved that problem,” DiPetrillo said. The company has developed an algorithm that it believes will result in less chatter in the network. He said that VMware’s algorithm is currently included in several academic papers that are currently up for peer review.

At the Money 20/20 conference in October, VMware demonstrated its first blockchain PoC targeted at the financial services industry. DiPetrillo said the company used the PoC as a way to engage with customers across industry verticals and find out what problems they are encountering that blockchain might be able to solve.

Besides its blockchain work in the company’s research department, VMware is also involved in the Hyperledger open source collaborative project hosted by the Linux Foundation. Hyperledger’s goal is to advance cross-industry blockchain technologies.

In July, Hyperledger issued its first release, Hyperledger Fabric 1.0, which is the company’s most active project. In October, it added a sixth sub-project named Quilt that is intended to facilitate transactions across ledgers. The first five projects are: Fabric, Sawtooth, Indy, Burrow, and Iroha. Here’s a recap of those projects.