Deconstructing the construction industry

15

October

2017

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The construction sector is ripe for disruption. Construction of the One World Trade Center (also known as The Freedom Tower) in New York started in 2006 and was completed in 2014. A year later, the Chinese managed to finish a 57-storey skyscraper in only 19 days. Admittedly, the latter building is significantly less complex than the first, but 19 days is still an impressive feat.

Traditional construction practices have dominated the industry for decades. This inhibited the adoption of innovative solutions. The sector’s R&D expenditures of less than 1% are among the lowest and bear testimony to poor performance outcomes. Luckily, the landscape is changing and the industry is starting to adopt new technologies for the better. In this blog, we’ll focus on three of the most prominent ones: BIM, drones and 3-d printing:

BIM (No, not Business Information Management, but Building Information Modelling): is thé platform technology for the construction industry. It is a shared knowledge resource for information regarding the project at hand. The construction value chain consists of many organizations and stakeholders. BIM shows a digital representation of the construction and allows each organization to enter data related to their respective field of expertise. Contractors can, for example, synchronize the activities of countless subcontractors (there could be a subcontractor for the windows, another one for the doors and so on..) while simultaneously, show the end result to the customer.

Drones: As buildings are becoming increasingly complex, executing common construction tasks prove more difficult. Manual inspections and surveyor tasks are likely to be replaced by drones. They do not carry the concern for human safety, cover a much wider area in less time and provide real-time data. Such advantages are wanted not only by the company, but also by the construction workers as well. Image a project revolving the construction of a mountain path near the cliff.

3-D printing (also called additive printing): this technology is still limited to complex components as scaling proves difficult. However, 3-D printing has proven to be much faster and less costly compared to traditional techniques with fixed molds. For a company to create all the necessary molds for a specific building can sometimes even double the total construction period.

These technologies are only a handful of the disruptive forces that are going to disrupt the construction industry. One thing is sure, skyscrapers will erupt from anywhere, everywhere.

Bibliography

 

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Blockchain hype illustrated: from cloud to ground

26

September

2017

5/5 (9)

Imagine that your personal data is not up there in the clouds, but down here, on our own computers. This fundamental change in storing data is facilitated by blockchain, the technology underpinning Bitcoin. Instead of uploading every file to a central data storage facility, the cloud, it is shredded into infinite pieces and spread throughout the blockchain network, our own computers. Such a decentralized approach offers countless of benefits, which is the main reason why blockchain is gaining so much traction nowadays.

First, decentralized data storage is private. The organizations behind the cloud have access to all our personal files. By allowing blockchain to take care of our data, we regain control. The shredded pieces of the files we upload are distributed to whoever in the network has storage space available. Hacking such a shredded file would mean that one has to go tremendous efforts, just to obtain a single piece of that specific file. Not only is this single piece useless by itself, this piece of data is randomly distributed to another computer (node) on a continuous basis. Your shredded files stay on the network and only you can glue the pieces back together with a unique key.

Secondly, decentralized data storage is cheaper. Not only is the decentralized nature of blockchain more secure, but cheaper as well due to efficiency. Physical data centers are inherently associated with costs and data companies have to make a sizeable profit as well. Blockchain, on the other hand, can compensate computers in the network that offer the available space for a much lower price. As the blockchain organization implements their own currency for transactions, they are not bound to the currencies of the physical world. Granted, instability is high, but so are the benefits. Blockchain storage costs approximately $2 per TB per month, while Amazon’s S3 costs $25 for the same product (Herbert, 2017).

Thirdly, decentralized data storage is redundant. The shredding process does not carry the risk of physical failure. In case all computers in one region beak down, the network simply transfers all the data to another region. This is an automatic process. All the scattered pieces of information are continuously sent to other devices (nodes) within the blockchain.

Prominent altcoins (other cryptocurrencies than Bitcoin) such as MaidSafeCoin, Storj and Siacoin are working towards this ambition. Actual products are already on the market and although these products are still in their initial stages, the aforementioned benefits are clearly visible.

Is the demise of present data storage companies then set in stone? No one can fully predict the future, but incumbents are sure to be disrupted. Their current offerings are in many ways inferior. Even if incumbents were to adopt blockchain technology, they could offer only two of the three aforementioned advantages. A much lower price would cannibalize current revenue, which in turn, is required to finance existing operations. Altcoins (new entrants) do not face this issue (Granados, Kauffman & King, 2008). They have more freedom due to their compact teams and years of blockchain development experience.

An alternative strategy is then to integrate blockchain technology with current operations, as recommended for internet disruptions (Porter, 2001). But how does one profitably exploit data centers that blockchain deems obsolete? One thing is sure, tomorrow’s weather forecast is sunny.

References:

• Granados, N., Kauffman, R.J. and King, B. 2008. How has electronic travel distribution been transformed? A test of the theory of newly vulnerable markets. Journal of Management Information Systems, 25(2): 73-96.
• Herbert, Z. 2017. Why blockchains are the future of cloud storage. Retrieved from https://blog.sia.tech/why-blockchains-are-the-future-of-cloud-storage-91f0b48cfce9.
• MaidSafeCoin. 2017. Retrieved from https://maidsafe.net/.
• Porter, M.E. 2001. Strategy and the Internet. Harvard Business Review, 79: 62-78.
• Siacoin. 2017. Retrieved from http://sia.tech/.
• Storj. 2017. Retrieved from https://storj.io/.

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