blockchain adoption in industrial markets
TRANSCRIPT
2BLOCKCHAIN ADOPTION IN INDUSTRIAL MARKETSwww.abiresearch.com
1. A DYNAMIC MARKET POISED FOR GROWTH
Blockchain is on the cusp of the latest digital innovation wave, with growing interest in exploring blockchain applications beyond fintech. Its distributed ledger architecture is being successfully leveraged in a number of use cases, including media rights protection against piracy, real estate asset tokenization, electronic voting security, and record keeping of higher education degrees.
Importantly, these effective uses of blockchain have emerged to showcase the utility and value of the technology for business, despite recent major upheavals, not least of which is the Covid-19 pandemic. Such events have actually served to weed out speculative offerings, leaving the more useful applications to crystallize.
Among these, blockchain forays in industrial markets have proven particularly successful, spanning adoption from manufacturing to retail. Increased investments are focused on solu- tions that can create more streamlined operations and efficient processes, and eventually complement digital transformation strategies.
These endeavors are dynamizing the industrial blockchain market, which is set to reach US$500 million in revenue by the end of 2020 (see Chart XX). Despite a bleaker outlook in other blockchain applications (and notably, fintech), COVID-19 has whipped up interest in how blockchain could effectively tackle global trade disruptions engendered by the pandem- ic and the subsequent fallout (lockdowns, furloughed workforce, stalled manufacture, falling goods demand, economic downturn, etc.).
© 2020 ABI Research • abiresearch.com • The material contained herein is for the individual use of the purchasing Licensee and may not be distributed to any other person or entity by such Licensee including, without limitation, to persons within the same corporate or other entity as such Licensee, without the express written permission of Licensor.
10
CR-IBM-103: INDUSTRIAL BLOCKCHAIN WHITEPAPER
1. A DYNAMIC MARKET POISED FOR GROWTH Blockchain is on the cusp of the latest digital innovation wave, with growing interest in exploring blockchain applications beyond fintech. Its distributed ledger architecture is being successfully leveraged in a number of use cases, including media rights protection against piracy, real estate asset tokenization, electronic voting security, and record keeping of higher education degrees.
Importantly, these effective uses of blockchain have emerged to showcase the utility and value of the technology for business, despite recent major upheavals, not least of which is the Covid-19 pandemic. Such events have actually served to weed out speculative offerings, leaving the more useful applications to crystallize.
Among these, blockchain forays in industrial markets have proven particularly successful, spanning adoption from manufacturing to retail. Increased investments are focused on solutions that can create more streamlined operations and efficient processes, and eventually complement digital transformation strategies.
These endeavors are dynamizing the industrial blockchain market, which is set to reach US$500 million in revenue by the end of 2020 (see Chart XX). Despite a bleaker outlook in other blockchain applications (and notably, fintech), COVID-19 has whipped up interest in how blockchain could effectively tackle global trade disruptions engendered by the pandemic and the subsequent fallout (lockdowns, furloughed workforce, stalled manufacture, falling goods demand, economic downturn, etc.).
$0
$500
$1,000
$1,500
$2,000
$2,500
Retail & Consumer Transport & Storage Utilities
Healthcare
3BLOCKCHAIN ADOPTION IN INDUSTRIAL MARKETSwww.abiresearch.com
In many respects, existing issues in international supply chains have been long standing, but they are becoming more noticeable with the adoption of Industry 4.0, where new Industrial IoT (IIoT) data, and improved communication and analytics are much more easily quantifying such issues. Their costs are less easily ignored and this makes the case for addressing them as a priority. Blockchain’s primary attributes of immutability, transparency, and autonomy promise to do just that, propelling uptake toward a market opportunity of US$2.2 billion by 2024 for industrial blockchain. That is a Compound Annual Growth Rate (CAGR) of 48% over the forecast period, with the core of that growth driven by demand in the food and bever- age, transport and storage, retail and consumer, and healthcare sectors.
This growth is supported by myriad active stakeholders: a strong startup community, ven- ture capital funds, leading enterprise software and cloud giants, industrialists, international organizations, and government agencies. Industrial blockchain consortiums and partner- ships, such as the IBM Food Trust, TradeLens, the global shipping business network, the Blockchain in Transport Alliance, or even the Construction Blockchain Consortium, have proven particularly popular for exploring and supporting the most promising applications.
2. BUSINESS CASE: SOLVING REAL ISSUES
Having a strong technology development community and investment support ecosystem is key to the market success of any new application. Above all, however, is the need for that new technology to address existing issues and prove itself as a viable business solution. Industrial blockchain applications are no exception.
The dynamics of the global trade industry are complicated and volatile. Merchandise export, whether manufactured goods, fuel and mining products, or agricultural produce, alongside associated commercial services, are subject to numerous economic, political, and social movements, including market volatility, trade policies, political unrest, and economic con- tractions, among many others.
The global supply chain that underlies this trade is a complex behemoth that is opaque, slow, and inefficient, subject to high levels of fraud, and regularly incurring significant losses. Efforts to render the supporting infrastructure more adaptable to these various influences is continuously underway in order to respond quickly to and anticipate adverse conditions, thereby minimizing costs, losses, and risks.
4BLOCKCHAIN ADOPTION IN INDUSTRIAL MARKETSwww.abiresearch.com
Blockchain promises to be especially effective in resolving existing issues plaguing industrial markets, as well as optimizing processes. Research and testing over the last few years shows that blockchain can address operational inefficiencies, complex logistics, accountability, and auditing issues, as well as intellectual property theft.
• Operational Inefficiencies: Industrial operations can be complex and highly specific, with specialized, often proprietary solutions that are not always flexible. Digital adoption aims to overcome many of the barriers of legacy industry, such as slow or poor provisioning, time-consuming manual processing and errors, duplication of efforts across the value chain, inadequate maintenance, etc. Through blockchain technology, business logic and pre-determined actions can be programmed through smart contracts, and automatical- ly executed peer-to-peer when specific conditions are met. This provides a new level of autonomy, intelligence, and process optimization.
• Complex Logistics: Numerous players on a globalized supply chain, each centrally man- aging their specific assets and data, means little transparency beyond direct upstream/ downstream partners. Blockchain records transactions in the ledger, a copy of which resides with each participant. New data uploaded to one node’s ledger is refreshed syn- chronously across each node, providing transparency and visibility to participants in real time.
• Accountability and Auditing Issues: Traceability (e.g., history, origin, provenance) be- comes more difficult as the supply chain becomes more crowded. This can lead to fur- ther compliance issues as different regulation, ethics, and standards are applied across regions. A blockchain approach guarantees the integrity of data related to provenance, quality assurance, certification, etc. throughout to provide a clear and current picture of a product’s life cycle to date.
• Intellectual Property Theft: Whether in manufacturing, agriculture, or energy gener- ation, industries are transitioning from monolithic operations, controlled end-to-end, toward more fragmented markets, rife with outsourcing and third-party contractors. Difficulties in supply chain visibility, accountability, and auditing has seen a significant increase in intellectual property violations, counterfeiting, and cloning. Blockchain can pro- vide trust through immutability with the cementing of data and transactions, once verified and accepted, into blocks. Recorded information cannot be copied or forged later without the knowledge or consent of the participants, or in case of modification, without having to change each and every copy of the ledger and all of the transactions taking place after that point of change.
5BLOCKCHAIN ADOPTION IN INDUSTRIAL MARKETSwww.abiresearch.com
Undoubtedly, the use of blockchain can provide enhanced transparency and greater scal- ability, reduce risks, and improve security, as well as drive innovation. Blockchain is an economic technology—it is not just about a shared state where assets can be exchanged. It can effectively hold these assets, whether these be data, liabilities, value, goods, or services, allowing participants to build, fund, and own the infrastructure that holds them through distribution and decentralization.
Blockchain can be especially valuable when used alongside digital transformation strategies that aim to create agile and lean supply chain management systems. Innovative applications have successfully leveraged blockchain with new connectivity and automation technologies, Internet of Things (IoT) devices and platforms, cloud and edge computing, Machine Learning (ML) and Artificial Intelligence (AI) technologies, etc. Importantly, blockchain can also serve to enhance existing legacy operations by providing an additional layer of security and visibility into aging systems that may still be operational.
Critically, blockchain is not about ripping out and replacing existing systems, whether new or legacy; on the contrary, it is about complementing and improving existing operations. Regardless of whether a company is improving simply with Radio Frequency Identification (RFID) sticker tags or deploying a brand-new fleet of 5G IoT modules, blockchain can serve to augment tracking and tracing capabilities, securely storing and sharing the data in a pre-de- fined manner.
Key to unlocking the value of blockchain is identifying realistic deployment strategies for industrial applications, and understanding the costs and the potential Return on Investment (ROI) that will result in a successful implementation. The best way to understand these chal- lenges is to look at those successful use cases in the market today.
6BLOCKCHAIN ADOPTION IN INDUSTRIAL MARKETSwww.abiresearch.com
3. JUMPSTARTING BLOCKCHAIN
Despite being an emerging technology, blockchain is ripe for productization. Though prom- ising, it can be complex to understand and implement. Increasingly, however, a range of platforms and deployment options exists to suit even the most novice adopters served by a maturing and highly competitive ecosystem. Solution providers are offering cloud-based in- frastructure plays based on Capital Expenditure (CAPEX) models, a broad range of developer tools (including templates, libraries, code) that are ready for use, and supporting services to help implementers build, test, and deploy as quickly and efficiently as possible.
Many of these solutions are catering to industrial applications, including construction, phar- maceutical and life sciences, manufacturing, utilities, automotive, distribution, energy, and agriculture. When considering a blockchain partner, a number of factors should be weighed to find the most suitable collaborator for a particular use case:
• Experience: Industrial Proofs of Concept (PoCs), pilots, commercial launches, and net- works in production.
• Integration with Industrial Internet: Application of blockchain alongside Industry 4.0 concepts, integration with digital industrial platforms, cyber-physical systems, IIoT, indus- trial cloud computing, etc.
• Integration with Industrial Legacy Systems: Integration of blockchain platform to exist- ing industrial control systems, operational technologies, industrial software systems, etc.
• Industrial Ecosystem Support: Industrial blockchain application advancement through partnerships, consortia, alliances participating in industrial standards development, refer- ence architectures, guidelines, and best practices.
• Platform Choice: Blockchain architecture availability (Hyperledger Fabric, R3 Corda, Dig- ital Asset, Ethereum, Quorum, etc.) and interoperability with other blockchain platforms and technologies.
• Developer Resources: Test networks, setup of peers/nodes, smart contract develop- ment, integrated development environments, software development kits, application programming interfaces, templates, documentation, tutorials—notably for industrial inte- gration.
• Management Tools: Administration and management (including troubleshooting) of network, peers, nodes, ledgers, channels, transactions, smart contracts, decentralized applications, security, access, authentication, etc.
7BLOCKCHAIN ADOPTION IN INDUSTRIAL MARKETSwww.abiresearch.com
Other metrics that should be assessed include pricing (the payment structure may change radically from testnet to production, and scaling costs should be closely scrutinized) and geographic reach (especially where cross-border use cases are being implemented that may be affected by regional/national constraints; e.g., regulation, data center presence, etc.).
Many partners offer appealing and competitive blockchain solutions today. IBM is a leader in this space and can be an ideal partner for implementers starting their blockchain journey. ABI Research ranked IBM first in its 2020 competitive assessment of industrial blockchain providers.
The IBM Blockchain is an integrated business-ready solution for the development, gover- nance, and operation of a multi-organization blockchain networks. IBM has been working on blockchain technology since 2015, and this experience has allowed it to explore and test numerous applications and use cases.
Today, the IBM Blockchain is open to a broad range of industrial verticals, offering business applications for supply chain management, trade finance, and provenance, among others.
Alibaba
Amazon
IBM
Microsoft
0
10
20
30
40
50
60
70
80
90
100
0 10 20 30 40 50 60 70 80 90 100
IN N
O VA
TI O
Integration with industrial internet.
• Food safety • Healthcare • Manufacturing • Pharma and Life Sciences • Provenance • Supply Chain • Trade Finance • Utilities
8BLOCKCHAIN ADOPTION IN INDUSTRIAL MARKETSwww.abiresearch.com
IBM has run numerous pilots and PoCs in the last 5 years, resulting in a number of success- ful commercial launches. It is also spearheading some of the largest collaborative blockchain networks in the supply chain, including Food Trust, TradeLens, Trust Your Supplier, and Responsible Sourcing.
• Food Trust: Includes 30+ projects and more than 100 industry leaders to ensure food safety, to reduce waste, and to add transparency to the agricultural supply chain from farm to store.
• TradeLens: Partnership with Maersk, CMA CGM, MSC Mediterranean Shipping Company, and others to enable an efficient cross-border supply chain network, tracking the prove- nance of shipping crates that move across global ports, securely sharing shipment events and documents with permissioned parties across six continents.
• Trust Your Supplier: A joint effort between IBM and Chainyard, Trust Your Supplier is a blockchain-based supplier life cycle management solution for IBM’s Procurement organization (with thousands of suppliers) and for external companies. Business out- comes include 90% real-time updates to supplier information, a 70% to 90% reduction in cycle time to onboard a new supplier, and a 50% reduction in cost. TYS network members include Cisco, UPS, JetBlue, SAP Ariba, BHP, GSK, ABInBev, Nokia, Flex, Lenovo, Dun & Bradstreet, and more. Rapid Supplier Connect, an IBM platform that enables buyers and suppliers to quickly find each other, and accelerate verification and onboarding processes is now also part of TYS.
• Responsible Sourcing Blockchain Network (RSBN): Working with Ford, Volvo, FCA, LG Chem, Volkswagen, IBM, Glencore, Huayou Cobalt, RCS Global, and more to address human rights and environmental and labor violations from the mining to the Original Equipment Manufacturer (OEM) supply chain. For this network, IBM started initially with cobalt and will work alongside consortium partners and a supply chain auditor to track cobalt (moving to 3TG afterward) from the mine to the smelter to the OEM.
IBM’s commitment to the industrial ecosystem, support for industrial collaborative efforts, and integration with industrial internet and legacy applications has enabled it to build successful use cases in numerous industrial sectors:
Agriculture • Farmer Connect: A platform designed to help increase traceability, efficiency and fairness
in the coffee supply chain.
Aquaculture/Fishing • Atea: Sharing supply chain data throughout Norway’s seafood industry to provide safer,
better seafood to consumers worldwide.
9BLOCKCHAIN ADOPTION IN INDUSTRIAL MARKETSwww.abiresearch.com
Automotive • Vinturas: A consortium of leading European automotive logistics service providers aiming
to reduce supply chain costs for manufacturers, while improving the car-buying experi- ence for customers and enabling end-to-end visibility in the finished vehicle supply chain.
Healthcare • Digital Health Pass: Launched in tandem with IBM Watson Health, this tool is aimed at
helping individuals to return to work or school by sharing their verified health pass, estab- lished on criteria, such as COVID-19 test results.
Pharmaceuticals • Federal Drug Administration (FDA): Partnership with KPMG, Merck, and Walmart in the
U.S. FDA blockchain pilot program in support of the U.S. Drug Supply Chain Security Act to address requirements to identify, track, and trace prescription medicines and vaccines.
Energy • Equigy: A platform joining European electricity grid operators providing an accounting
system for consumers charging their electric vehicles and for the ability of home batteries to interact with transmissioning systems.
Oil and Gas • Vertrax: Total liquid asset visibility for the oil & gas supply chain.
Labor • Learning Credential Network: Enables skilled workers to store and manage their earned
credentials and share them with employers, licensing boards, and regulatory agencies, among others.
IBM has achieved this level of success by offering a comprehensive enterprise solution through the IBM Blockchain, rich with features and development and management tools, capable of bringing that enterprise blockchain vision from planning to reality.
For more information on how to start your blockchain journey, visit www.ibm.com/blockchain
About ABI Research
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© 2020 ABI Research. Used by permission. Disclaimer: Permission granted to reference, reprint or reissue ABI products is expressly not an endorsement of any kind for any company, product, or strategy. ABI Research is an independent producer of market analysis and insight and this ABI Research product is the result of objective research by ABI Research staff at the time of data collection. ABI Research was not compensated in any way to produce this information and the opinions of ABI Research or its analysts on any subject are continually revised based on the most current data available. The information contained herein has been obtained from sources believed to be reliable. ABI Research disclaims all warranties, express or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose.
1. A DYNAMIC MARKET POISED FOR GROWTH
Blockchain is on the cusp of the latest digital innovation wave, with growing interest in exploring blockchain applications beyond fintech. Its distributed ledger architecture is being successfully leveraged in a number of use cases, including media rights protection against piracy, real estate asset tokenization, electronic voting security, and record keeping of higher education degrees.
Importantly, these effective uses of blockchain have emerged to showcase the utility and value of the technology for business, despite recent major upheavals, not least of which is the Covid-19 pandemic. Such events have actually served to weed out speculative offerings, leaving the more useful applications to crystallize.
Among these, blockchain forays in industrial markets have proven particularly successful, spanning adoption from manufacturing to retail. Increased investments are focused on solu- tions that can create more streamlined operations and efficient processes, and eventually complement digital transformation strategies.
These endeavors are dynamizing the industrial blockchain market, which is set to reach US$500 million in revenue by the end of 2020 (see Chart XX). Despite a bleaker outlook in other blockchain applications (and notably, fintech), COVID-19 has whipped up interest in how blockchain could effectively tackle global trade disruptions engendered by the pandem- ic and the subsequent fallout (lockdowns, furloughed workforce, stalled manufacture, falling goods demand, economic downturn, etc.).
© 2020 ABI Research • abiresearch.com • The material contained herein is for the individual use of the purchasing Licensee and may not be distributed to any other person or entity by such Licensee including, without limitation, to persons within the same corporate or other entity as such Licensee, without the express written permission of Licensor.
10
CR-IBM-103: INDUSTRIAL BLOCKCHAIN WHITEPAPER
1. A DYNAMIC MARKET POISED FOR GROWTH Blockchain is on the cusp of the latest digital innovation wave, with growing interest in exploring blockchain applications beyond fintech. Its distributed ledger architecture is being successfully leveraged in a number of use cases, including media rights protection against piracy, real estate asset tokenization, electronic voting security, and record keeping of higher education degrees.
Importantly, these effective uses of blockchain have emerged to showcase the utility and value of the technology for business, despite recent major upheavals, not least of which is the Covid-19 pandemic. Such events have actually served to weed out speculative offerings, leaving the more useful applications to crystallize.
Among these, blockchain forays in industrial markets have proven particularly successful, spanning adoption from manufacturing to retail. Increased investments are focused on solutions that can create more streamlined operations and efficient processes, and eventually complement digital transformation strategies.
These endeavors are dynamizing the industrial blockchain market, which is set to reach US$500 million in revenue by the end of 2020 (see Chart XX). Despite a bleaker outlook in other blockchain applications (and notably, fintech), COVID-19 has whipped up interest in how blockchain could effectively tackle global trade disruptions engendered by the pandemic and the subsequent fallout (lockdowns, furloughed workforce, stalled manufacture, falling goods demand, economic downturn, etc.).
$0
$500
$1,000
$1,500
$2,000
$2,500
Retail & Consumer Transport & Storage Utilities
Healthcare
3BLOCKCHAIN ADOPTION IN INDUSTRIAL MARKETSwww.abiresearch.com
In many respects, existing issues in international supply chains have been long standing, but they are becoming more noticeable with the adoption of Industry 4.0, where new Industrial IoT (IIoT) data, and improved communication and analytics are much more easily quantifying such issues. Their costs are less easily ignored and this makes the case for addressing them as a priority. Blockchain’s primary attributes of immutability, transparency, and autonomy promise to do just that, propelling uptake toward a market opportunity of US$2.2 billion by 2024 for industrial blockchain. That is a Compound Annual Growth Rate (CAGR) of 48% over the forecast period, with the core of that growth driven by demand in the food and bever- age, transport and storage, retail and consumer, and healthcare sectors.
This growth is supported by myriad active stakeholders: a strong startup community, ven- ture capital funds, leading enterprise software and cloud giants, industrialists, international organizations, and government agencies. Industrial blockchain consortiums and partner- ships, such as the IBM Food Trust, TradeLens, the global shipping business network, the Blockchain in Transport Alliance, or even the Construction Blockchain Consortium, have proven particularly popular for exploring and supporting the most promising applications.
2. BUSINESS CASE: SOLVING REAL ISSUES
Having a strong technology development community and investment support ecosystem is key to the market success of any new application. Above all, however, is the need for that new technology to address existing issues and prove itself as a viable business solution. Industrial blockchain applications are no exception.
The dynamics of the global trade industry are complicated and volatile. Merchandise export, whether manufactured goods, fuel and mining products, or agricultural produce, alongside associated commercial services, are subject to numerous economic, political, and social movements, including market volatility, trade policies, political unrest, and economic con- tractions, among many others.
The global supply chain that underlies this trade is a complex behemoth that is opaque, slow, and inefficient, subject to high levels of fraud, and regularly incurring significant losses. Efforts to render the supporting infrastructure more adaptable to these various influences is continuously underway in order to respond quickly to and anticipate adverse conditions, thereby minimizing costs, losses, and risks.
4BLOCKCHAIN ADOPTION IN INDUSTRIAL MARKETSwww.abiresearch.com
Blockchain promises to be especially effective in resolving existing issues plaguing industrial markets, as well as optimizing processes. Research and testing over the last few years shows that blockchain can address operational inefficiencies, complex logistics, accountability, and auditing issues, as well as intellectual property theft.
• Operational Inefficiencies: Industrial operations can be complex and highly specific, with specialized, often proprietary solutions that are not always flexible. Digital adoption aims to overcome many of the barriers of legacy industry, such as slow or poor provisioning, time-consuming manual processing and errors, duplication of efforts across the value chain, inadequate maintenance, etc. Through blockchain technology, business logic and pre-determined actions can be programmed through smart contracts, and automatical- ly executed peer-to-peer when specific conditions are met. This provides a new level of autonomy, intelligence, and process optimization.
• Complex Logistics: Numerous players on a globalized supply chain, each centrally man- aging their specific assets and data, means little transparency beyond direct upstream/ downstream partners. Blockchain records transactions in the ledger, a copy of which resides with each participant. New data uploaded to one node’s ledger is refreshed syn- chronously across each node, providing transparency and visibility to participants in real time.
• Accountability and Auditing Issues: Traceability (e.g., history, origin, provenance) be- comes more difficult as the supply chain becomes more crowded. This can lead to fur- ther compliance issues as different regulation, ethics, and standards are applied across regions. A blockchain approach guarantees the integrity of data related to provenance, quality assurance, certification, etc. throughout to provide a clear and current picture of a product’s life cycle to date.
• Intellectual Property Theft: Whether in manufacturing, agriculture, or energy gener- ation, industries are transitioning from monolithic operations, controlled end-to-end, toward more fragmented markets, rife with outsourcing and third-party contractors. Difficulties in supply chain visibility, accountability, and auditing has seen a significant increase in intellectual property violations, counterfeiting, and cloning. Blockchain can pro- vide trust through immutability with the cementing of data and transactions, once verified and accepted, into blocks. Recorded information cannot be copied or forged later without the knowledge or consent of the participants, or in case of modification, without having to change each and every copy of the ledger and all of the transactions taking place after that point of change.
5BLOCKCHAIN ADOPTION IN INDUSTRIAL MARKETSwww.abiresearch.com
Undoubtedly, the use of blockchain can provide enhanced transparency and greater scal- ability, reduce risks, and improve security, as well as drive innovation. Blockchain is an economic technology—it is not just about a shared state where assets can be exchanged. It can effectively hold these assets, whether these be data, liabilities, value, goods, or services, allowing participants to build, fund, and own the infrastructure that holds them through distribution and decentralization.
Blockchain can be especially valuable when used alongside digital transformation strategies that aim to create agile and lean supply chain management systems. Innovative applications have successfully leveraged blockchain with new connectivity and automation technologies, Internet of Things (IoT) devices and platforms, cloud and edge computing, Machine Learning (ML) and Artificial Intelligence (AI) technologies, etc. Importantly, blockchain can also serve to enhance existing legacy operations by providing an additional layer of security and visibility into aging systems that may still be operational.
Critically, blockchain is not about ripping out and replacing existing systems, whether new or legacy; on the contrary, it is about complementing and improving existing operations. Regardless of whether a company is improving simply with Radio Frequency Identification (RFID) sticker tags or deploying a brand-new fleet of 5G IoT modules, blockchain can serve to augment tracking and tracing capabilities, securely storing and sharing the data in a pre-de- fined manner.
Key to unlocking the value of blockchain is identifying realistic deployment strategies for industrial applications, and understanding the costs and the potential Return on Investment (ROI) that will result in a successful implementation. The best way to understand these chal- lenges is to look at those successful use cases in the market today.
6BLOCKCHAIN ADOPTION IN INDUSTRIAL MARKETSwww.abiresearch.com
3. JUMPSTARTING BLOCKCHAIN
Despite being an emerging technology, blockchain is ripe for productization. Though prom- ising, it can be complex to understand and implement. Increasingly, however, a range of platforms and deployment options exists to suit even the most novice adopters served by a maturing and highly competitive ecosystem. Solution providers are offering cloud-based in- frastructure plays based on Capital Expenditure (CAPEX) models, a broad range of developer tools (including templates, libraries, code) that are ready for use, and supporting services to help implementers build, test, and deploy as quickly and efficiently as possible.
Many of these solutions are catering to industrial applications, including construction, phar- maceutical and life sciences, manufacturing, utilities, automotive, distribution, energy, and agriculture. When considering a blockchain partner, a number of factors should be weighed to find the most suitable collaborator for a particular use case:
• Experience: Industrial Proofs of Concept (PoCs), pilots, commercial launches, and net- works in production.
• Integration with Industrial Internet: Application of blockchain alongside Industry 4.0 concepts, integration with digital industrial platforms, cyber-physical systems, IIoT, indus- trial cloud computing, etc.
• Integration with Industrial Legacy Systems: Integration of blockchain platform to exist- ing industrial control systems, operational technologies, industrial software systems, etc.
• Industrial Ecosystem Support: Industrial blockchain application advancement through partnerships, consortia, alliances participating in industrial standards development, refer- ence architectures, guidelines, and best practices.
• Platform Choice: Blockchain architecture availability (Hyperledger Fabric, R3 Corda, Dig- ital Asset, Ethereum, Quorum, etc.) and interoperability with other blockchain platforms and technologies.
• Developer Resources: Test networks, setup of peers/nodes, smart contract develop- ment, integrated development environments, software development kits, application programming interfaces, templates, documentation, tutorials—notably for industrial inte- gration.
• Management Tools: Administration and management (including troubleshooting) of network, peers, nodes, ledgers, channels, transactions, smart contracts, decentralized applications, security, access, authentication, etc.
7BLOCKCHAIN ADOPTION IN INDUSTRIAL MARKETSwww.abiresearch.com
Other metrics that should be assessed include pricing (the payment structure may change radically from testnet to production, and scaling costs should be closely scrutinized) and geographic reach (especially where cross-border use cases are being implemented that may be affected by regional/national constraints; e.g., regulation, data center presence, etc.).
Many partners offer appealing and competitive blockchain solutions today. IBM is a leader in this space and can be an ideal partner for implementers starting their blockchain journey. ABI Research ranked IBM first in its 2020 competitive assessment of industrial blockchain providers.
The IBM Blockchain is an integrated business-ready solution for the development, gover- nance, and operation of a multi-organization blockchain networks. IBM has been working on blockchain technology since 2015, and this experience has allowed it to explore and test numerous applications and use cases.
Today, the IBM Blockchain is open to a broad range of industrial verticals, offering business applications for supply chain management, trade finance, and provenance, among others.
Alibaba
Amazon
IBM
Microsoft
0
10
20
30
40
50
60
70
80
90
100
0 10 20 30 40 50 60 70 80 90 100
IN N
O VA
TI O
Integration with industrial internet.
• Food safety • Healthcare • Manufacturing • Pharma and Life Sciences • Provenance • Supply Chain • Trade Finance • Utilities
8BLOCKCHAIN ADOPTION IN INDUSTRIAL MARKETSwww.abiresearch.com
IBM has run numerous pilots and PoCs in the last 5 years, resulting in a number of success- ful commercial launches. It is also spearheading some of the largest collaborative blockchain networks in the supply chain, including Food Trust, TradeLens, Trust Your Supplier, and Responsible Sourcing.
• Food Trust: Includes 30+ projects and more than 100 industry leaders to ensure food safety, to reduce waste, and to add transparency to the agricultural supply chain from farm to store.
• TradeLens: Partnership with Maersk, CMA CGM, MSC Mediterranean Shipping Company, and others to enable an efficient cross-border supply chain network, tracking the prove- nance of shipping crates that move across global ports, securely sharing shipment events and documents with permissioned parties across six continents.
• Trust Your Supplier: A joint effort between IBM and Chainyard, Trust Your Supplier is a blockchain-based supplier life cycle management solution for IBM’s Procurement organization (with thousands of suppliers) and for external companies. Business out- comes include 90% real-time updates to supplier information, a 70% to 90% reduction in cycle time to onboard a new supplier, and a 50% reduction in cost. TYS network members include Cisco, UPS, JetBlue, SAP Ariba, BHP, GSK, ABInBev, Nokia, Flex, Lenovo, Dun & Bradstreet, and more. Rapid Supplier Connect, an IBM platform that enables buyers and suppliers to quickly find each other, and accelerate verification and onboarding processes is now also part of TYS.
• Responsible Sourcing Blockchain Network (RSBN): Working with Ford, Volvo, FCA, LG Chem, Volkswagen, IBM, Glencore, Huayou Cobalt, RCS Global, and more to address human rights and environmental and labor violations from the mining to the Original Equipment Manufacturer (OEM) supply chain. For this network, IBM started initially with cobalt and will work alongside consortium partners and a supply chain auditor to track cobalt (moving to 3TG afterward) from the mine to the smelter to the OEM.
IBM’s commitment to the industrial ecosystem, support for industrial collaborative efforts, and integration with industrial internet and legacy applications has enabled it to build successful use cases in numerous industrial sectors:
Agriculture • Farmer Connect: A platform designed to help increase traceability, efficiency and fairness
in the coffee supply chain.
Aquaculture/Fishing • Atea: Sharing supply chain data throughout Norway’s seafood industry to provide safer,
better seafood to consumers worldwide.
9BLOCKCHAIN ADOPTION IN INDUSTRIAL MARKETSwww.abiresearch.com
Automotive • Vinturas: A consortium of leading European automotive logistics service providers aiming
to reduce supply chain costs for manufacturers, while improving the car-buying experi- ence for customers and enabling end-to-end visibility in the finished vehicle supply chain.
Healthcare • Digital Health Pass: Launched in tandem with IBM Watson Health, this tool is aimed at
helping individuals to return to work or school by sharing their verified health pass, estab- lished on criteria, such as COVID-19 test results.
Pharmaceuticals • Federal Drug Administration (FDA): Partnership with KPMG, Merck, and Walmart in the
U.S. FDA blockchain pilot program in support of the U.S. Drug Supply Chain Security Act to address requirements to identify, track, and trace prescription medicines and vaccines.
Energy • Equigy: A platform joining European electricity grid operators providing an accounting
system for consumers charging their electric vehicles and for the ability of home batteries to interact with transmissioning systems.
Oil and Gas • Vertrax: Total liquid asset visibility for the oil & gas supply chain.
Labor • Learning Credential Network: Enables skilled workers to store and manage their earned
credentials and share them with employers, licensing boards, and regulatory agencies, among others.
IBM has achieved this level of success by offering a comprehensive enterprise solution through the IBM Blockchain, rich with features and development and management tools, capable of bringing that enterprise blockchain vision from planning to reality.
For more information on how to start your blockchain journey, visit www.ibm.com/blockchain
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