To date, R3 has successfully helped to deliver blockchain technology and worked with a broad ecosystem of more than 350 participants on over 130 projects across multiple industries. So where did it all start? The digitialization opportunity presented by blockchain and distributed ledger technologies drove a review and validation cycle that was led by R3 as a consortium of banks back in 2015.
It has since developed into one of the leading enterprise software firms, by delivering its blockchain platform, Corda, which is its open-source distributed ledger platform launched in 2016. A commercial version of Corda, Corda Enterprise, was rolled out in 2018 and it harnesses the core elements of Corda, fine-tuning them to meet the service and network infrastructure requirements of today’s highly regulated industries.
Brown, who is one of the world’s leading authorities on distributed ledger systems and architectures, joined R3 in September 2015 just as the company was hitting news headlines around the buzz of blockchain, Bitcoin and cryptocurrencies. “We began as a consortium primarily of the sell side in financial services and investment banking, but we’ve grown, expanded and broadened our horizons considerably since then,” he tells Capacity. There was a huge amount of hype around blockchain being transformational and the CTO tells me R3 was formed with one main objective: “This was to cut through the hype and figure out what, if anything, might be the real opportunities with blockchain for banking in particular and business in general.”
“This claim was always made without justification. It was merely asserted and people were expected to nod sagely as if they understood why it was true and no one challenged it,” he says. “However, none of these technologies in their first guise, like the original cryptocurrencies, were designed to solve problems for banks and businesses. It was quite the reverse. So our objective was to crystallise an answer to what the applicability might be and why.
Because R3 began as a collaborative consortium focused on understanding the technology, it meant they had the space to explore the questions and come to a clear answer. “We realised through a vigorous process of architectural, technological and use case evaluations that this technology had much applicability to business in general. The idea of bringing disparate, maybe competing or adversarial groups to a common understanding about some set of ‘facts’ they care about is powerful – and very generalisable. But we also had a problem. Our work had been heavily inspired by the existing blockchain platforms, but it turned out that none of them had answers for the additional requirements we uncovered that businesses have, such as the need for privacy, identity, finality and confirmation of transaction. So we developed Corda,” adds the CTO, who was previously the executive architect for banking and financial markets industry innovation at IBM UK.
Corda was open sourced to facilitate open collaboration. “Then this really unexpected, almost serendipitous, thing happened. People in other industries all around the world, first insurance, government, then in oil and gas, discovered this software and we realised that rather than quite a narrow thing that we thought we had developed just for banking it turned out to be far more broadly applicable,” Brown says.
In 2017, the company realised the platform it had built was potentially the real future of this company. “So we went through this process of reimagining and transforming ourselves away from being a consortium into what we now are, which is an enterprise software company that maintains and develops Corda and its commercial variant, Corda Enterprise, and we sell into a whole range of industries, including telecommunications.
The Telco Space
You may have previously heard of R3 in Capacity, as it was one of the selected technologies of the Communication Business Automation Network (CBAN), which officially launched in mid-January. The CBAN’s launch marks an exciting and critical period of blockchain software in the telecommunications space and inter-carrier opportunities.
The CBAN launched as a consortium with 13 global carriers collaborating with 11 technology providers to launch a transformational interoperability and settlement platform for the global ICT service provider industry. The project has been managed by the ITW Global Leaders’ Forum (GLF).
R3 has been involved since the start, says Spencer, who is responsible for business development, partnerships, and strategy to support carriers and CSPs to deliver the future of blockchain on Corda. “Amid a broader wave of investigation and adoption into blockchain use cases across industries, we set up an industry business unit and identified key verticals and use cases to support, including the telecoms space,” he explains.
“We engaged the sector with a lean start-up approach and identified very quickly the high value problems that the industry needs to solve. These are around long term trends such as falling voice revenues and growing data consumption, as well as trends that have been exacerbated by recent Covid-19 related changes in the way we work such as enterprise customers relying on connectivity for business applications now more than ever.”
So the ability for carriers to orchestrate and automate services across their federated network is driven by a real pain point form their enterprise customers. “The entire industry is looking much closer at how they can monetise their enterprise customers more efficiently and move from not just being telecoms providers but technology and digital service providers as well,” adds Spencer. He explains that one thing we learnt was a lot of the requirements we saw for Corda in other industries are shared across telecoms as well. Such as, having reliable and secure real-time automated transactions and processes across multiple organisations and carriers, which supports interoperability with the above and lower layers and has strong privacy requirements is a real game-changer for our industry.
“Most carrier relationships are done on a bilateral basis and when you try and apply blockchain technology it’s often quite difficult to make compatible because some blockchain protocols have global broadcast of transactions,” explains Spencer, who adds that carriers have historically really struggled with ensuring the nature of their transactions remain private bilaterally when trying to implement them on a blockchain platform.
The CBAN
R3 has been a key supporter and player in the development of the CBAN from its inception. As a company that was initially founded as a consortium itself and has a wealth of experience in setting up enterprise blockchain networks and bringing them to market, we ask for its take on the CBAN’s progress.
“Firstly, we’re big supporters of the CBAN,” says Spencer. “It’s an incredibly ambitious endeavour kicked off by the Global Leaders’ Forum (GLF). Setting up consortiums is never easy but they’ve made a huge amount of progress and we’re really excited to work and support them.”
“We’ve been involved since about April 2019 and we were selected amongst a group of vendors to be invited to support it at that stage. Since then, we’ve been taking part in the workshops and active calls and have been very active participants.”
R3 has shared its technical skills and capabilities to help advise the CBAN through the process of trying to define what technical requirements the CBAN has, which were outlined in the initial whitepaper and reference architecture published in January 2020.
He adds. “From day one we shared a lot of our experience in deploying blockchain networks previously that we have set up to support wide adoption from industry participants, such as setting up Corda Network, which is a global blockchain network governed by an independent board of users, Corda Network Foundation, and is available for users and application vendors to utilise if they want to deploy their applications on any infrastructure connected to a global internet of Corda nodes.” We have certainly tried to share our experiences and lessons learnt from past projects which are now live as much as possible.
In such a short amount of time, R3 has helped to debunk many blockchain myths and helped guide carriers, software providers, and the CBAN to collaborate and be successful early adopters of blockchain software. R3 is also looking at the convergence of industries across use cases, such as IoT, and the benefits of bringing different vertical providers together to benefit from shared resources and scale. This could be a game-changer.
As many businesses re-evaluate blockchain technologies on their drive to become digital technology providers, R3 may well be the answer to the TMT blockchain conundrum.
