Accelerating future value for telcos through blockchain
Blockchain is still an emerging technology – and CSPs urgently need an updated and informed strategy around it to drive real business value and avoid the use of the technology for its novelty value. All the indicators show that this focus will be worthwhile.
13 May 2019
Accelerating future value for telcos through blockchain
Sponsored by: Accenture
Download the related report: Blockchain: Where’s the value for telecoms?
This report shows clearly that blockchain is no longer in the aspiration or learning phase. Many proofs of concept and pilots are taking place, consortia have collaborated to develop industry use cases and platform solutions and implementation has begun.
Yet blockchain is still an emerging technology – and CSPs urgently need an updated and informed strategy around it to drive real business value and avoid the use of the technology for its novelty value. All the indicators show that this focus will be worthwhile.
Accenture’s latest research for our Technology Vision 2019 (in field Oct-Dec 2018), our annual checkpoint on the technology priorities which businesses should start planning for now, offers the first trend as “DARQ power”.
This research and our work with the leading CSPs across the globe mean that we firmly believe that distributed ledger technology, artificial intelligence (AI), extended reality (XR) and quantum computing will be the next set of new technologies to spark a step change in allowing the reimagination of entire industries.
D – Distributed ledgers will expand networks by eliminating the need for trusted third parties.
A – AI already plays a role in optimizing processes and influencing strategic decision making.
R – Extended reality creates entirely new ways for people to experience and engage with the world around them.
Q – Quantum technology will usher in novel ways to approach and solve the hardest computational problems.
The key here is the set. All four DARQ technologies are, or will be, powerful on their own. But as they advance, they will push each other forward further. And as DARQ technologies reach maturity, they will amplify the reach and capabilities of the business, creating new value from existing SMAC (social, mobile, analytics, cloud) investments.
This report shows clearly that blockchain is no longer in the aspiration or learning phase. Many proofs of concept and pilots are taking place, consortia have collaborated to develop industry use cases and platform solutions and implementation has begun.
Yet blockchain is still an emerging technology – and CSPs urgently need an updated and informed strategy around it to drive real business value and avoid the use of the technology for its novelty value. All the indicators show that this focus will be worthwhile.
DARQ Power: Beyond Digital Transformation
Accenture’s latest research for our Technology Vision 2019 (in field Oct-Dec 2018), our annual checkpoint on the technology priorities which businesses should start planning for now, offers the first trend as “DARQ power”.
This research and our work with the leading CSPs across the globe mean that we firmly believe that distributed ledger technology, artificial intelligence (AI), extended reality (XR) and quantum computing will be the next set of new technologies to spark a step change in allowing the reimagination of entire industries.
D – Distributed ledgers will expand networks by eliminating the need for trusted third parties.
A – AI already plays a role in optimizing processes and influencing strategic decision making.
R – Extended reality creates entirely new ways for people to experience and engage with the world around them.
Q – Quantum technology will usher in novel ways to approach and solve the hardest computational problems.
The key here is the set. All four DARQ technologies are, or will be, powerful on their own. But as they advance, they will push each other forward further. And as DARQ technologies reach maturity, they will amplify the reach and capabilities of the business, creating new value from existing SMAC (social, mobile, analytics, cloud) investments.
Accenture Research - Technology Vision 2019: A snapshot of CSP respondents’ thinking on DARQ
1. When asked to rank which of the DARQ technologies will have the greatest impact on their organization over the next 3 years, 43% of Communications industry executives ranked AI number one – with 19% ranking Distributed Ledgers/Blockchain as number one.
2. Some DARQ technologies will be more impactful today but exploring all four will be crucial to take advantage of combinatorial effects.
3. 91% of Communications industry executives are currently experimenting with one or more DARQ technologies – here’s their response on their organization’s stage of adoption for Distributed Ledgers/Blockchain today.
One thing is clear – the future value of blockchain needs to be considered in a much greater context than simply the technology on its own.
Read more about decision points for DARQ and other emerging technology trends in Tech Vision 2019.
Note: DLT and blockchain are synonymous but not the same. DLT is the umbrella category. Blockchain is the more common term. All blockchain’s are DLT. Not all DLTs are blockchain. The difference is the consensus mechanisms and management of the data. Check out this article from renowned Spanish Blockchain blogger @AlexPreukschat to learn more about the difference.
According to Gartner:
“Gartner’s business value forecast methodology quantifies the value of technology innovation rather than the dollars spent on it. The business value-add of blockchain will grow to slightly more than $176 billion by 2025, and then it will exceed $3.1 trillion by 2030.”
(Forecast: Blockchain Business Value, Worldwide, 2017-2030 Published: 02 March 2017 ID: G00325744; Analyst(s): John-David Lovelock | Martin Reynolds | Bianca Granetto | Rajesh Kandaswamy).
And institutional digital assets observer, Diar, notes that, as of October 2018, venture capital investment in blockchain was reported as up by more than 280% than the year prior, meaning that there are ever more technology assets emerging.
(Read more: Venture capital companies go deep and wide with Blockchain Investments).
From Accenture’s perspective, recent projects have demonstrated that blockchain/DLT can scale and is ready for the next phase of the journey to production. The key is to educate the wider group of business leaders, being selective across the potential use cases focusing on the actual value cases and to focus the discussion on operating model possibilities and ecosystem governance rather than the technology.
As examples - the Internet of Things and Artificial Intelligence cannot reach their full capabilities without taking blockchain into consideration.
And the rise of 5G networks offers a further example of future possibility.
Blockchain’s ability to securely expand an AI implementation’s access to data across organizations will drive a whole new set of insights and value.
Each AI system, and each algorithm within, is dependent upon training and acting upon trustworthy data to which it has access; limited to the organization implementing it.
Simultaneously, blockchain is redefining business processes and systems of record, enabling secure and confident access to shared data between organizations and increased trust and confidence in the data. Together, AI and blockchain will enable organizations to exceed their current boundaries and gain access to significant amounts of trapped value.
Blockchain doesn’t cure bad data, but it does improve our ability to share and more importantly, trust the data used. In addition, as AI works through its complex decision trees, this “learning process” can be captured on a blockchain, in a tamper-evident fashion, and shared so its decisions may be evaluated and trusted.
Security is perhaps the most critical element of this combination. AI-based applications must process huge amounts of data. Having the highest level of certainty that the data has not been altered or tampered with is critical for AI to achieve its potential. Currently, it’s extremely difficult to identify data that has been modified or “poisoned” by an attacker. Using blockchain with AI against data vaults allows analysts to determine when a breach has occurred.
Blockchain also makes hacking systems and stealing sensitive data and information difficult and the combination of the two forms a “double shield” against cyberattacks. Organizations can train machine-learning algorithms to automate real-time threat detection and continuously learn about the behavior of attackers.
Read more: AI & Blockchain synergies
Building on their opportunity in digital identity management (referred to in the earlier research chapter), CSPs have a closely related opportunity to facilitate IoT disintermediation and address the challenges associated with data authenticity and ownership, security and privacy, and the upfront and ongoing costs of deployment.
This growth is also giving rise to increased devices autonomy, shifting focus from a single central authority and monolithic infrastructure to a new, decentralized architectural approach. Recent attacks on IoT devices have demonstrated that unsecure devices/routers can be the vehicle of massive digital denial-of-service (DDoS) outages, with huge societal and economical damage. Security is hence a priority and will be even more critical as telcos increasingly seek to become more highly valued platform players, with a need to authenticate a connected ecosystem of value-added services offered by players from multiple industries.
CSPs are already engaged in the IoT ecosystem and, through blockchain, could deliver a value-added trust capability through digital identity validations and assuring the integrity of device transactions. They could also displace traditional centralized IoT cloud infrastructures by establishing a peer-to-peer communication model that allows for the lower- cost processing of billions of transactions between IoT devices, positioning themselves as the trusted authority for digital identity.
Read more: Blockchain plays to telcos’ strengths
We have identified a number of potential options for value propositions using Blockchain in 5G networks.
For example, Blockchain is a potential technology for enabling reliable 5G services. To realize these services, CSPs will need to handle heterogeneous access notes and diverse access mechanisms.
Blockchain has the capability to assist in 5G wireless access technology deployments by providing seamless access across a diverse number of networks to devices and endpoints. For example,with 5G, CSPs will be required to manage access to rules, agreements and transactions across an increasing number of access points and mechanisms. Blockchain will play a reinforcing role, for example, in auditing agreements.
Possible use case of blockchain powering the
5G networks:
Further possibilities include - for MVNOs – and MNOs - that might struggle to afford billion-dollar 5G buildouts, blockchain-enabled microtransactions and smart contracts could be an option. In this scenario, they could lease high-frequency spectrum from larger players, or even the government, in real time or on a pay-as-you-go basis.
As another example, with new complexity inherent in 5G, CSPs will be open to new vulnerabilities and blockchain as a digital ledger will help control and protect against unauthorized changes. Meanwhile, complexities and speed may also allow for hyper personalization of offerings, which could be best tracked by using blockchain.
Read more: 5G Acceleration
For 5G to meet the performance goals of very low latency and massive broadband, it requires edge computing. There is a time lag when data travels over the fiber networks connecting the radios on the towers to the network core, where edge computing can help by moving the application or content closer to the radio at the edge of the network, thereby reducing overall latency. The integration between blockchain and edge computing can bring the following benefits:
Blockchain causes new business networks to form that join up players within industry sectors and can be a major enabler as well as disruptor for many businesses.
This is not just a technology play: Accenture approaches blockchain from the point of view of an operating model transformation.
Our approach has 3 underlying principles:
With a new and fast evolving technology, we are yet to see the emergence of a dominant, all-purpose platform. As such, it is important to support the blockchain ecosystem in their effort both to innovate as well as to standardize. With such objectives in mind we are very active in the ecosystem and are founding members of Hyperledger, a Linux Foundation Project1 and the Enterprise Ethereum Alliance2. We help our clients to optimize solutions by selecting the right blockchain platform for the right use case.
Coming together to collaborate, establish standards and frameworks, and share innovation and knowledge, is critical to blockchain’s adoption and growth. Accenture is well positioned across the ecosystem because of its relationships and technology independence. We have been at the forefront of founding and structuring the largest consortia of the ecosystem and continue to drive their missions forward. In addition, we are convening ecosystem consortia around particular use cases to shape and build networks.
Moreover, industry analysts acknowledge there will likely be more than one successful DLT platform, that different platforms will succeed in different business ecosystems and that over time those ecosystems will see value in connecting with each other. Concern about picking the “wrong system” has been a hinderance in moving the technology forward. Having the ability to “interoperate” DLT systems mitigates some of these concerns – we have developed an integration solution which establishes a trusted “interoperability node” that sits between the target DLT systems and further enhancements will support multiple platforms and direct transfers between requestors.
Read more: Connecting Ecosystems: Blockchain Integration
Blockchain becomes more powerful as the network grows and we have positioned ourselves to convene key stakeholders across the blockchain ecosystem.
Our ecosystem relationships include enterprises across industries, major tech players (such as Microsoft, IBM, AWS, HPE, Intel), platform vendors, start-ups (including Ripple, R3, Digital Asset, MultiChain), consortia (including Hyperledger, Enterprise Ethereum Alliance, ID2020, Chamber of Digital Commerce, Hashed Health), regulators, governments and academic institutions (including MIT, Blockchain Research Institute and Cambridge University).
As a leading independent technology organization, Accenture is able to bring the right combination of capabilities to each of our clients’ unique challenges – and to provide an innovation framework to scale emerging tech solutions to enterprise strength.
Read more: Blockchain services, alliances and partners
Accenture has undertaken practical production deployments of DLT solutions on a global scale and holds a vendor agnostic approach, with the expertise to deliver from a technical and strategic position across all platforms.
We advise on architectures and solutions that are designed to work seamlessly with existing systems and maximize blockchain’s benefits. We also offer a portfolio of plug-in components to enhance flexibility, security and privacy (redaction, HSM, Evaluation Framework).
Emerging technologies are catalysts for change, offering new business capabilities. Accenture has made Blockchain one of our strategic technology priorities; to make blockchain a reality for our clients, driving end-to-end business transformation across business ecosystems to deliver real value and open up new business growth opportunities.
Our Blockchain team is distributed around the globe, supported by our 5 businesses: underpinning our leadership position in the marketplace.
Read more about decision points for DARQ and other emerging technology trends in Tech Vision 2019.
Note: DLT and blockchain are synonymous but not the same. DLT is the umbrella category. Blockchain is the more common term. All blockchain’s are DLT. Not all DLTs are blockchain. The difference is the consensus mechanisms and management of the data. Check out this article from renowned Spanish Blockchain blogger @AlexPreukschat to learn more about the difference.
Analyst observations
According to Gartner:
“Gartner’s business value forecast methodology quantifies the value of technology innovation rather than the dollars spent on it. The business value-add of blockchain will grow to slightly more than $176 billion by 2025, and then it will exceed $3.1 trillion by 2030.”
(Forecast: Blockchain Business Value, Worldwide, 2017-2030 Published: 02 March 2017 ID: G00325744; Analyst(s): John-David Lovelock | Martin Reynolds | Bianca Granetto | Rajesh Kandaswamy).
And institutional digital assets observer, Diar, notes that, as of October 2018, venture capital investment in blockchain was reported as up by more than 280% than the year prior, meaning that there are ever more technology assets emerging.
(Read more: Venture capital companies go deep and wide with Blockchain Investments).
Blockchain: So where are we and what is next?
From Accenture’s perspective, recent projects have demonstrated that blockchain/DLT can scale and is ready for the next phase of the journey to production. The key is to educate the wider group of business leaders, being selective across the potential use cases focusing on the actual value cases and to focus the discussion on operating model possibilities and ecosystem governance rather than the technology.
Identification of future value from blockchain opportunities requires meeting the right criteria
As examples - the Internet of Things and Artificial Intelligence cannot reach their full capabilities without taking blockchain into consideration.
And the rise of 5G networks offers a further example of future possibility.
- Powered by blockchain: realizing AI’s full potential
Blockchain’s ability to securely expand an AI implementation’s access to data across organizations will drive a whole new set of insights and value.
Each AI system, and each algorithm within, is dependent upon training and acting upon trustworthy data to which it has access; limited to the organization implementing it.
Simultaneously, blockchain is redefining business processes and systems of record, enabling secure and confident access to shared data between organizations and increased trust and confidence in the data. Together, AI and blockchain will enable organizations to exceed their current boundaries and gain access to significant amounts of trapped value.
Blockchain doesn’t cure bad data, but it does improve our ability to share and more importantly, trust the data used. In addition, as AI works through its complex decision trees, this “learning process” can be captured on a blockchain, in a tamper-evident fashion, and shared so its decisions may be evaluated and trusted.
Security is perhaps the most critical element of this combination. AI-based applications must process huge amounts of data. Having the highest level of certainty that the data has not been altered or tampered with is critical for AI to achieve its potential. Currently, it’s extremely difficult to identify data that has been modified or “poisoned” by an attacker. Using blockchain with AI against data vaults allows analysts to determine when a breach has occurred.
Blockchain also makes hacking systems and stealing sensitive data and information difficult and the combination of the two forms a “double shield” against cyberattacks. Organizations can train machine-learning algorithms to automate real-time threat detection and continuously learn about the behavior of attackers.
Read more: AI & Blockchain synergies
- Blockchain and IoT Disintermediation
Building on their opportunity in digital identity management (referred to in the earlier research chapter), CSPs have a closely related opportunity to facilitate IoT disintermediation and address the challenges associated with data authenticity and ownership, security and privacy, and the upfront and ongoing costs of deployment.
This growth is also giving rise to increased devices autonomy, shifting focus from a single central authority and monolithic infrastructure to a new, decentralized architectural approach. Recent attacks on IoT devices have demonstrated that unsecure devices/routers can be the vehicle of massive digital denial-of-service (DDoS) outages, with huge societal and economical damage. Security is hence a priority and will be even more critical as telcos increasingly seek to become more highly valued platform players, with a need to authenticate a connected ecosystem of value-added services offered by players from multiple industries.
CSPs are already engaged in the IoT ecosystem and, through blockchain, could deliver a value-added trust capability through digital identity validations and assuring the integrity of device transactions. They could also displace traditional centralized IoT cloud infrastructures by establishing a peer-to-peer communication model that allows for the lower- cost processing of billions of transactions between IoT devices, positioning themselves as the trusted authority for digital identity.
Read more: Blockchain plays to telcos’ strengths
- 5G and Blockchain
We have identified a number of potential options for value propositions using Blockchain in 5G networks.
- Sharing of faster and regulated local connectivity for reliable service to devices.
- Instant monetization of diverse connection types through smart contracts.
- Local connection prices purely based on supply and demand in the area.
- New business models to use idle capacity for nonprioritized traffic.
For example, Blockchain is a potential technology for enabling reliable 5G services. To realize these services, CSPs will need to handle heterogeneous access notes and diverse access mechanisms.
Blockchain has the capability to assist in 5G wireless access technology deployments by providing seamless access across a diverse number of networks to devices and endpoints. For example,with 5G, CSPs will be required to manage access to rules, agreements and transactions across an increasing number of access points and mechanisms. Blockchain will play a reinforcing role, for example, in auditing agreements.
Possible use case of blockchain powering the
5G networks:
- Infrastructure sharing in 5G small cell networks - Blockchain can enable network carriers to dynamically transfer infrastructure elements among themselves or other parties on demand via secure, auditable transactions.
- 5G network slicing broker - Blockchain can create a secure and automatic broker of network slicing, adding the following benefits:
- Superior level of security for 5G network slice transactions;
- Higher efficiency in 5G network slice operations;
- Opex cost saving.
Further possibilities include - for MVNOs – and MNOs - that might struggle to afford billion-dollar 5G buildouts, blockchain-enabled microtransactions and smart contracts could be an option. In this scenario, they could lease high-frequency spectrum from larger players, or even the government, in real time or on a pay-as-you-go basis.
As another example, with new complexity inherent in 5G, CSPs will be open to new vulnerabilities and blockchain as a digital ledger will help control and protect against unauthorized changes. Meanwhile, complexities and speed may also allow for hyper personalization of offerings, which could be best tracked by using blockchain.
Read more: 5G Acceleration
- Edge Computing
For 5G to meet the performance goals of very low latency and massive broadband, it requires edge computing. There is a time lag when data travels over the fiber networks connecting the radios on the towers to the network core, where edge computing can help by moving the application or content closer to the radio at the edge of the network, thereby reducing overall latency. The integration between blockchain and edge computing can bring the following benefits:
- Edge computing solves computational problems of the blockchain process: IoT devices are low powered, geographically distributed and mobile. Limited computing resource and energy supply of IoT devices become major barriers when blockchain is applied to IoT systems specifically. Mobile edge computing can supply computing and communication resources for mobile blockchain.
- Blockchain ensures data security: When blockchain is applied to edge computing, it ensures that data are tamper-resistant and traceable.
Blockchain & Distributed Ledger Technologies are driving business transformation
Blockchain causes new business networks to form that join up players within industry sectors and can be a major enabler as well as disruptor for many businesses.
This is not just a technology play: Accenture approaches blockchain from the point of view of an operating model transformation.
Our approach has 3 underlying principles:
- Platform independent
With a new and fast evolving technology, we are yet to see the emergence of a dominant, all-purpose platform. As such, it is important to support the blockchain ecosystem in their effort both to innovate as well as to standardize. With such objectives in mind we are very active in the ecosystem and are founding members of Hyperledger, a Linux Foundation Project1 and the Enterprise Ethereum Alliance2. We help our clients to optimize solutions by selecting the right blockchain platform for the right use case.
Coming together to collaborate, establish standards and frameworks, and share innovation and knowledge, is critical to blockchain’s adoption and growth. Accenture is well positioned across the ecosystem because of its relationships and technology independence. We have been at the forefront of founding and structuring the largest consortia of the ecosystem and continue to drive their missions forward. In addition, we are convening ecosystem consortia around particular use cases to shape and build networks.
Moreover, industry analysts acknowledge there will likely be more than one successful DLT platform, that different platforms will succeed in different business ecosystems and that over time those ecosystems will see value in connecting with each other. Concern about picking the “wrong system” has been a hinderance in moving the technology forward. Having the ability to “interoperate” DLT systems mitigates some of these concerns – we have developed an integration solution which establishes a trusted “interoperability node” that sits between the target DLT systems and further enhancements will support multiple platforms and direct transfers between requestors.
Read more: Connecting Ecosystems: Blockchain Integration
- Enabling the ecosystem
Blockchain becomes more powerful as the network grows and we have positioned ourselves to convene key stakeholders across the blockchain ecosystem.
Our ecosystem relationships include enterprises across industries, major tech players (such as Microsoft, IBM, AWS, HPE, Intel), platform vendors, start-ups (including Ripple, R3, Digital Asset, MultiChain), consortia (including Hyperledger, Enterprise Ethereum Alliance, ID2020, Chamber of Digital Commerce, Hashed Health), regulators, governments and academic institutions (including MIT, Blockchain Research Institute and Cambridge University).
As a leading independent technology organization, Accenture is able to bring the right combination of capabilities to each of our clients’ unique challenges – and to provide an innovation framework to scale emerging tech solutions to enterprise strength.
Read more: Blockchain services, alliances and partners
- World class integration and operability
Accenture has undertaken practical production deployments of DLT solutions on a global scale and holds a vendor agnostic approach, with the expertise to deliver from a technical and strategic position across all platforms.
We advise on architectures and solutions that are designed to work seamlessly with existing systems and maximize blockchain’s benefits. We also offer a portfolio of plug-in components to enhance flexibility, security and privacy (redaction, HSM, Evaluation Framework).
- Accenture DLT Readiness Assessment and Value Exploration (B-RAVE) - Accenture has developed an assessment toolkit to explore the fit of DLT technology to solve business problems and gauge the business value at stake. It is also used to evaluate the readiness of our clients’ current enterprise IT environments.
- Accenture DLT Platform Selection Methodology - There are various flavours/options of DLT platforms (private or public, permissioned or permissionless, etc.). A consistent methodology to match functional and non-functional requirements of a network ecosystem to the most well-suited DLT platform is required.
- Accenture Distributed Ledger Reference Architecture - a platform agnostic Distributed Ledger Technology (DLT) Reference Architecture provides guidance and best practices. The DLT reference architecture is part of the wider Accenture Delivery Architecture (ADA v4) framework which is used to guide e.g. the integration into the CSP’s legacy estate, exploiting standardization and its natural consequence - TM Forum Open APIs - as a key enabler of digital transformation.
- Accenture have set the gold standard in conjunction with Thales in developing an industrial grade HSM which creates scalable, efficient and highly secure solutions.
- Accenture are utilizing Software Guard Extension and Sawtooth Lake to protect blockchain code and data from disclosure or modification.
- Accenture, in conjunction with a leading Investment Bank, have combined a LightWeight Wallet and HSM device for portable blockchain security.
In summary
Emerging technologies are catalysts for change, offering new business capabilities. Accenture has made Blockchain one of our strategic technology priorities; to make blockchain a reality for our clients, driving end-to-end business transformation across business ecosystems to deliver real value and open up new business growth opportunities.
Our Blockchain team is distributed around the globe, supported by our 5 businesses: underpinning our leadership position in the marketplace.
Authors: George Nazi: Global Industry Lead and Adriano Poloni: Global Technology Lead, Accenture Communications & Media Industries.
We’d be delighted to discuss further!
Please do get in touch.
Email: commsindustry@accenture.com
Twitter: @AccentureComms
LinkedIn: Accenture Communications, Media & Technology
About Accenture
Accenture is a leading global professional services company, providing a broad range of services and solutions in strategy, consulting, digital, technology and operations. Combining unmatched experience and specialized skills across more than 40 industries and all business functions—underpinned by the world’s largest delivery network Accenture works at the intersection of business and technology to help clients improve their performance and create sustainable value for their stakeholders. With 477,000 people serving clients in more than 120 countries, Accenture drives innovation to improve the way the world works and lives.
Visit us at www.accenture.com/telecoms.
We’d be delighted to discuss further!
Please do get in touch.
Email: commsindustry@accenture.com
Twitter: @AccentureComms
LinkedIn: Accenture Communications, Media & Technology
About Accenture
Accenture is a leading global professional services company, providing a broad range of services and solutions in strategy, consulting, digital, technology and operations. Combining unmatched experience and specialized skills across more than 40 industries and all business functions—underpinned by the world’s largest delivery network Accenture works at the intersection of business and technology to help clients improve their performance and create sustainable value for their stakeholders. With 477,000 people serving clients in more than 120 countries, Accenture drives innovation to improve the way the world works and lives.
Visit us at www.accenture.com/telecoms.
