The blockchain technology industry is growing, and open blockchains are not the only types of distributed ledgers. Indeed, some companies require for their projects the implementation of private blockchains whose users are identified. These private blockchains notably allow faster execution of transactions but require technical qualities to be implemented. Companies, therefore, offer services for setting up personalized private blockchains, which can be called “Blockchain as a Service”. Today I invite you to explore this sector, often unloved by the community but allows relevant applications for companies.

What Does Blockchain As a Service mean?

The term BaaS (Blockchain as a Service) comes from the name of the types of IT services currently offered. Indeed, it is common to refer to SaaS, or Software as a Service, to define services between companies (“B2B”) offering management or accounting software, for example. It can also be cloud computing services or any other IT service. In particular, this allows customers to avoid having to deploy internal teams to develop and maintain these IT systems. The latter can therefore focus on their specific products without having to develop expertise in distributed ledgers.

BaaS services generally relate to the deployment of private blockchains on cloud computing solutions. They make it possible to deploy a personalized blockchain according to customer criteria in a few minutes. Once implemented, the blockchain requires certain management, particularly dedicated to the maintenance of nodes as well as the payment of infrastructure costs. Blockchains are delivered with different modules dedicated to security and the management of its use and interactions. These functionalities can cover general needs, such as a backend that can be integrated into the existing architecture, potentially composed of an interface.

There are many preferred platforms in the BaaS sector: you will recognize some of them, but others might not ring a bell since they are dedicated to private enterprise blockchains. They are Ethereum, Bitcoin, Chain Core, Hyperledger, Corda, BlockApps and Quorum. Each of these platforms and their implementations has different characteristics such as support, smart contracts, the management of user permissions, e.t.c. Therefore, many possibilities are available to customers who can define the service that suits them according to their needs.

Who are the Different Players in the Sector?

The BaaS market is currently young, but many major players have already positioned themselves in the sector. Indeed, companies like Amazon or Microsoft, which are already leaders in the cloud computing market, regularly add so-called “blockchain” services to their catalogs. But let’s find out together which players make up this ecosystem of blockchains deployed in the minute, configured according to customer needs.

Amazon Web Services (AWS)

The branch of Amazon dedicated to cloud computing services is already a leader in the cloud market and manages the infrastructure of many companies. The company has gradually developed services related to blockchain technology and today has companies such as T-Mobile and PwC in its client portfolio. These customers use these BaaS to test or develop their current infrastructures, but also the management of their human resources or their supply chains. AWS mainly offers Ethereum and Hyperledger Fabric platforms to their customers to benefit from user management and smart contracts. Amazon has also forged partnerships with major players in blockchain technology, such as R3 or ConsenSys.

IBM

Suppose IBM is also a major player in the BaaS sector, which develops its own blockchain architecture dedicated to the needs of companies. IBM has entered into numerous partnerships with various major companies in their sectors in order to offer them blockchain services to support them in their test or production projects. We find IBM products mainly used in the supply chain or traceability sector during the transport of goods. It is particularly with their IBM Food Trust product that the company has collaborated with players in the food industry, such as Carrefour and Nestlé.

Microsoft Azure

Azure is the branch dedicated to the cloud of Microsoft, a direct competitor of AWS in the sector. Little wonder then that Microsoft is also working on deploying BaaS among their already extensive catalog of services. Since 2016 Azure has been working on a catalog of products that have allowed Microsoft to sign partnerships with companies like BitPay, Ripple and Openchain.

Baidu

You will not necessarily recognize the name of this company, which is still little known in Europe, but Baidu is a leader in its market in Asia. Indeed Baidu is the most used search engine in China, which rejects the use of Google. Before the beautiful speeches of the Chinese president, the actors of IT innovation had already developed blockchain projects. Baidu offers developers an open platform to develop blockchain-related services. This allows Chinese project leaders to focus on the performance of these services and their user experience. Baidu’s open blockchain platform, therefore, supports the very many startups that make up the Chinese innovative ecosystem.

Oracle

The Oracle company also has its platform dedicated to BaaS, Oracle Blockchain Cloud Service, created in 2018 and which wishes to offer its customers solutions to digitize their operations through the use of blockchains. The services offered by Oracle are developed on the Hyperledger Fabric project that we presented and are mainly dedicated to private networks.

However, there are many other large groups that are developing BaaS solutions or wish to develop them in the near future, as well as some younger projects such as start-ups with more limited funding. There are indeed other Chinese companies like Alibaba and SaaS giants like Saleforce that are also working on BaaS services. A booming sector, therefore, is like the different ecosystems that are developing around blockchain technologies.

BaaS Use Cases

The main demands of customers of BaaS services are related to the sharing of data between different partners and clearly identified users, as well as the tokenization of goods or assets. But the long-term use cases are potentially numerous depending on the technological advancements of these services. Indeed the limit between a private blockchain and more traditional software is relatively thin, and very often, blockchain technology is not used wisely. It should not be forgotten that a blockchain is a heavier, slower and more expensive technology of a centralized architecture. But there are still use cases that seem relevant in the context of private networks.

This mainly concerns interactions with partners being opposites. These are, therefore, sectors with problems related to traceability, maritime transport and contract management. BaaS notably makes it possible to test a blockchain solution to these issues and to the framework of the company in question. Going through a service like those offered by players in the sector makes it possible to set up applications without spending large sums or a lot of time while obtaining results quickly.

The Limits of BaaS

The Blockchain as a Service sector is not well regarded by the open blockchain community, which does not select its users or the nodes participating in the network. The arrival of large centralized players in a sector currently dominated by open blockchains is indeed a contradiction. In addition, the use of these services is often linked to applications with controversial use cases. Indeed, sectors such as traceability or medical data management are very often cited as those that could be revolutionized by blockchain technology, despite the reluctance of some experts in distributed ledgers.

But these are not the only use cases for Base, and these services can also be used for the development of decentralized applications. Indeed they can make it possible to easily deploy PoC (proofs of concept) but also certain functional applications related to the tokenization of goods, for example. Deploying its smart contracts on an architecture similar to Ethereum in a private way would make it possible to test innovations underwater, while the test networks are very public.

So much for this presentation of the Blockchain as a Service sector and the main players in this ecosystem. Despite the youth of this market, we note that it is very mature players accustomed to offering these services that currently dominate. Will Amazon, Microsoft and the Chinese giants end up dominating blockchain-related markets like they do for the cloud? If you have any comments or questions about this article, please let us know in the comments or on social media.