What is series (#11): what is Blockchain as a Service (BaaS)?

In recent years testing and deploying blockchain applications has become easier and less risky with the advent of a new generation of cloud services that offer the infrastructure, tools, application possibilities and blockchain network support enabling organizations to deploy and manage a blockchain project without the complexity, overhead and required time that is usually associated with blockchain development. A look at the meaning and role of these services, known as Blockchain as a Service.

In my book Digitize or Die, I explain why blockchain technology promises to be a key accelerator of the evolution of the Internet of Things (IoT). Organizations have understood how both technologies are natural allies, as I describe in a blog post.

And the results are there: end 2019 Gartner found that blockchain adoption in combination with IoT adoption is higher than expected in the US: 75 percent of IoT technology adopters either adopted blockchain or were planning to do so by the end of this year.

Blockchain as a Service is rapidly becoming the first priority regarding blockchain infrastructure for the large majority of organizations when implementing blockchain initiatives

Yet, in other areas, the adoption of blockchain is not that high, and most projects are still in a proof-of-concept or pilot stage. This has different causes and doesn’t mean that blockchain is and will be less disruptive than previously thought.

Blockchain technology, in general, isn’t mature yet, and many organizations still try to get their heads around the true significance of blockchain: what it really is and, more importantly, what it enables to do. While some use cases are clear with solutions in, for instance, financial services and supply chains, others are less evident.

Blockchain as a Service: testing and rolling out blockchain networks faster

Moreover, deploying blockchain applications isn’t easy, takes quite some infrastructure, can be expensive, and requires resources and skills that are often not available. The technologies also aren’t mature enough for adoption at scale.

For enterprise blockchain adoption, all these factors certainly have led to some disappointment and ‘fatigue,’ further enhanced by the fact that blockchain had to deal with a lot of hype in recent years, certainly with regards to cryptocurrencies and ICOs. However, many CIOs and business leaders start seeing the benefits of blockchain.

With the rise of Blockchain as a Service, they can start testing or rolling out their blockchain networks faster and with less hassle. Blockchain as a Service enables organizations to leverage the benefits of cloud computing in building and deploying their blockchain initiatives.

It offers a low-risk approach without the need for in-house development and expensive infrastructure. BaaS is a perfect way to overcome many of the challenges in setting up a project, also on the level of skills.

No wonder that Blockchain as a Service is rapidly becoming the first priority regarding blockchain infrastructure for the large majority of organizations when implementing blockchain initiatives this year, according to IDC.

The ITU defines Blockchain as a Service as follows: ‘a cloud service category in which the capabilities provided to the cloud service customer are to deploy and manage a blockchain network enabling the ability of consensus, smart contract, transaction, crypto engine, block record storage, peer-to-peer connectivity and management using blockchain.’

In other words: all of the blockchain functions are available for organizations to get going and overcome a lot of the complexity of blockchain. The first hyper-scale cloud provider of Blockchain as a Service was Microsoft with its Azure Blockchain, followed by IBM’s Blockchain Platform. In the meantime, there are various players in the market, including all hyperscalers, companies like HPE, and several startups.

BaaS initially was most suited for proofs-of-concept. However, the market of Blockchain as a Service is evolving fast, even if it’s not mature either yet.

Blockchain as a Service (BaaS) represents a service offering for many market segments as a mean of blockchain solution introduction and scalability via a cloud services model

Blockchain as a Service providers all come with their specific backgrounds, enabling applications in their environment and at the same time making it easier to use blockchain networks such as Ethereum or Hyperledger Fabric. The precise networks which are supported differ per vendor as do the services and applications built upon the core infrastructure.

So, compare the offers of various providers and certainly ask for their roadmap since several are preparing to add more blockchain networks, and in this fast-growing market, many continue to add functions and applications.