IDC had the opportunity to participate in the Blockchain Summit 2018 in London on November 28. This represented a great opportunity to meet players and young entrepreneurs active in the sector across multiple domains, while having insightful conversations with some of first Blockchain adopters all over the globe. IDC European analysts also had the pleasure to moderate interactive panels in three different industries, the key takeaways of which are summarized below:
Music Industry – How to explain Blockchain to Lady Gaga
In this section we took a deep dive in the Music Industry, a sector completely re-shaped by technologies in the last two decades, from the CD explosion in the ’90s to recent internet-based streaming services that completely turned the industry upside down.
Together with us on stage, Matthew Lennox, musician and director of the production duo Mon Frere Limited, Jason Robert, co-founder of the blockchain-based Event Management platform HelloSugoi, and Hessel van Oorschot, co-founder of the Music Coaching and Coding company New Media Squad, animated the conversation.
While at the dawn of the new millennium the first peer-to-peer solutions decimated the industry, we could be now in the middle of a transition from p2p doom to decentralized rebirth, with Blockchain turning the spotlight on controversial industry themes and promising to tackle some industry barriers, such as lack of transparency, piracy, rights/royalties recognition, and artists-fans engagement.
One of the key target for early stage Blockchain attempts in the industry focuses on the music production and distribution flow scheme. A decentralized monetization chain tracking aims to disintermediate rights/royalties pipeline, undermining large industry gatekeepers’ role and giving product (and revenues) control back to musicians and composers.
In parallel, it will be interesting to follow Blockchain evolution and impact on the Event & Ticketing world. A few young platforms (e.g. HelloSugoi) are already active in this direction, showing how a distributed ledger-based approach could help the music industry to reduce ticketing fees, enable event organizes to participate in secondary markets, and eliminate fraud risk on tickets.
The title of this paragraph gets inspiration from one of the questions that drove panelists’ conversation “How to explain a sophisticate term, such as Blockchain, to non-tech expert musicians (e.g. Lady Gaga)?”. With no need to deepen into technology details, the best way to easily communicate what Blockchain is certainly consists in focusing on the main benefits and opportunities, such as transparency, security and trust, this technology and mindset could lead. A suggestion that perfectly fits end-users approach across all industry sectors.
Blockchain in the Supply Chain – The point of no return
Supply chains are no longer traditional networks of OEMS and suppliers, but vast, globally dispersed ecosystems involving a galaxy of different parties. This has made the tracking and tracing of assets (including money, assets, patents, information, goods, etc.) across the whole value chain elusive. Until Blockchain came along.
Guided by the question “Is Blockchain the solution for supply chain transparency?” the panel, composed of Joe Wreford, Strategy Consultant at Accenture, Christophe Ozcan, Credits Advisor & CEO of Crypto4All, Nick Williamson, Founder of Qadre and Jody Cleworth, Founder of Marine Transport International, discussed promising use cases and pilots for this domain. Here are some key highlights from the panel discussion:
- A network based on Blockchain technology can take over functions, which, until now, could only be enabled by an appointed intermediary or centralized database. This sort of set up not only creates more transparency but also eliminates middlemen. In the case of container logistics, a market desperate for cost cutting schemes, Blockchain is already reshaping the supply chain and cutting out/replacing traditional players.
- Immutable, time stamped and accessible, Blockchain also offer proof about how exactly materials or goods were sourced. In the pharmaceuticals industry for instance, where up to 30% of medication globally are counterfeit, Blockchain has major application areas. But Blockchain also helps restore trust in the food and beverage industry. Take the example of the wine industry, which has also been exposed to fraud. Here, Blockchain can help proof authenticity, too.
- Blockchain offers a good opportunity for different industries to rethink their business models and create new use cases. At the moment, consortia, a popular means for enterprises to work together on Blockchain technology, are forming globally. Some of these have attracted significant investments. And unlike common belief, Blockchain doesn’t have to be expensive to deploy.
- To start Blockchain-based networks, companies will need to hire for a new type of talent, which extends beyond the job role of the traditional software developer. They will need to look for technical consultants, data scientists, software engineers, cyber security strategists, project managers, and many other new emerging job roles.
According to the recently published IDC Worldwide Supply Chain 2018 Predictions, one third of global manufacturers will be tracking goods using Blockchain by 2021, resulting in an improvement of delivered product quality of up to 20%. So while adoption will not be sudden but gradual, Blockchain will be a major disruptor, and significantly redefine processes in the supply chain.
Utilities – Crowdfunding your solar panels
The Energy Industry session set off to answer the seminal question: “should energy utilities avoid or embrace Blockchain technology?” Not a trivial question as it would appear on the surface for IDC and its guests on stage, David Ferguson (EDF Energy), Diego Dal Canto (Enel) and Zdenek Pekarek (CEZ).
Peer-to-peer trading of self-generated electricity is the “Blockchain talk of the town” in the industry. Technically, it allows electricity prosumers (producers-consumers) to exchange excess production without the need for an energy retailer or even an energy market, effectively cutting the energy middleman out. This is the single most experimented use case, with many well-funded initiatives and promising startups across the world.
So, utilities should be worried about the onset of Blockchain, right? Well, it depends…
- First, asset-based industries are not expected to be disrupted by Blockchain the same way platform operators in the service industries are. Yes, there is a long-term risk of disintermediation in the terminal segments of the value chain (e.g., retail, aggregation). However, prosumers will still need copper wires to exchange electricity and backup generation when the sun doesn’t shine.
- Second, utilities know all too well that the commodity business is under pressure and have been on the lookout for new business models for years. The “energy as a service” business model, for example, will see utilities move from mere commodity supply to energy management platforms and services, and Blockchain may well be a part of the mix.
- Last, but not least, Blockchain has the potential to materially improve some industry processes and enable utilities to offer new services. Many utilities are busy experimenting with Blockchain well beyond peer-to-peer trading, with wholesale trading, electric mobility, market data management and demand response being only a few promising areas of work.
So, although the market is teeming with grassroot initiatives, initial coin offerings (ICOs), demos and pilots, it’s not just a startup world. Incumbent are driving significant initiatives, often banding together across borders around specific use cases, or to develop common regional or global standards. The Enerchain Project, Oslo2Rome and the Energy Web Foundation were mentioned on stage as examples of contrasting approaches to co-innovation with Blockchain.
Speaking of standards, participants insisted that co-innovation initiatives should have a technology-neutral, use case and customer-driven approach, lowering entry barriers to the technology for stakeholders. “It should not be about Blockchain per se, but about the lowest-cost technology offering the best user experience” – said one participant. Pure technology platforms, on the other hand, pose a significant risk of vendor lock-in at a stage when the technology is still very immature.
Finally, when time to market is concerned, the utilities on stage said they expect the first mass-scale Blockchain use cases to come to commercial fruition between three and five years from now, with select high-profile large-scale trials already happening in 2018.
The future ahead
Although Blockchain is still at a very early stage, both in terms of industry familiarity and adoption (according to the recent IDC European Vertical Markets Survey, among a sample of 2,000 European companies, almost 60% of them have never heard the term Blockchain), its application across multiple domains and industry sectors is rapidly expanding. It is undeniable that the technology focus is currently still in financial services and the cryptocurrency sphere, as witnessed by the majority of event exhibitors. Nevertheless, as confirmed by the sessions we had the pleasure to moderate, crisp examples of successful non-financial Blockchain applications are disruptively emerging, giving a glimpse of the potential this technology could have across verticals.
Doubts around Blockchain business models and standard/platform proliferation still remain, but we believe that many of the industry challenges discussed at the event didn’t need to wait for Blockchain to arrive in the first place, but at least in some cases, could have been addressed with already existing technologies.
Nevertheless, it’s undeniable that the excitement accompanying this rising technology is giving the opportunity to discuss and re-think the approach to atavistic themes, still hampering specific industry sectors’ evolution and growth.
Discover more about IDC European Blockchain Team research in the recently published IDC Market Presentation “Blockchain and Distributed Ledger Technologies: Use Cases and Impacts on Market in Europe” and don’t hesitate to reach out to get in touch with some of the IDC European experts on the theme.
We would love to hear your comments and look forward to continuing the Blockchain conversation with you.