Blockchain as a Service (BaaS) is a cloud services offering that allows customers to leverage cloud-based solutions to build, host and use their own blockchain apps, smart contracts and functions on the blockchain. All the while the cloud-based service provider manages all the necessary tasks and activities to keep the infrastructure agile and operational.
As a Cloud Architect I find that BaaS is an interesting development in the blockchain ecosystem that is indirectly aiding the blockchain adoption across businesses.
BaaS is based on, and works similar to, the concept of Software as A Service (SaaS) model.
Blockchain-as-a-service market is expected to grow significantly, owing to its increasing applications in the commerce sector. International business transactions are getting more secure, fast, and reliable along with the BaaS model coming into the picture. As all the database is distributed and the trail of every transaction is available, blockchain-as-a-service is eliminating obstacles in international payment processes.
Delay in verification and invoice processing, triggers the cost of business activities, this can be nullified or reduced by using blockchain technology. The technology provides a common chain of information visibility that will be shared across vendors and purchasers.
Use of BaaS in international business transactions may very well reduce processing time and reduce costs significantly.
In a nutshell, the BaaS model allows companies to access a blockchain provider ‘s services where they can then access, develop and deploy blockchain based applications.
Figure 1 shows the significant growth of blockchains plans.
Figure Blockchain Adoption, Worldwide. Source: Gartner (May 2018)
The growth of blockchain is clear and along with that will likely be the increased utilization of Blockchain as a Service on platforms such as IBM, AWS and Azure. Other players such as Oracle, Alibaba, Baidu, Hewlett Packard Enterprise (HPE), Huawei, and Tencent all have BaaS potential.
Bill Fearnley Jr, IDC research director of Worldwide Blockchain strategies, stated, “One advantage of partnering with a BaaS provider is how users can leverage the lessons learned by the provider to help make their systems more secure.”
One of the main benefits of using a BaaS vendor is that they provide all the necessary software deployments for blockchain and the infrastructure to a customer in generally a subscription model. The vendor is then responsible for setting up and maintaining the back-end of the blockchain’s infrastructure.
Now to clarify, there are certainly some BaaS platforms such as IBM Cloud Blockchain that are efficient in the setup. Essentially, with IBM BaaS it’s a Platform as Service model where you can deploy a sandbox of blockchain services around Hyperledger Fabric. IBM BaaS creates your business network automatically with a minimum deployment of nodes.
On the other hand, some Blockchains as a Service are really Infrastructure as a Service where you deploy templates. However, for example with AWS Blockchain Templates in the AWS Marketplace to help your company create and deploy blockchain networks on AWS using different blockchain frameworks. You would need to create your Security Groups, CloudFormation and networking configs for example
Benefits of Using a Blockchain as a Service (BaaS)
Cloud Computing has been around since the early days of Amazon Web Services who essentially created the market for Cloud Computing. Cloud Computing has numerous benefits for an enterprise, startup or even a home user. The reality is that IT Infrastructure is expensive to procure, expensive to maintain and finding talented people can be a challenge on a limited budget. Cloud Computing has essentially leveled the playing for both a consultant in Jacksonville, FL or a large multinational bank in New York City.
This is due to the fact that a Blockchain as a Service is deployed on Cloud Computing infrastructure that is managed by the cloud vendor whose shared services benefits just the same as if you would have with your virtual machines in the cloud would be the same essentially with a Blockchain.
Some of the main benefits of using a Blockchain Cloud Service are:
- Lower startup costs over traditional on premises solutions which support OPEX funding
- Faster time to market by no infrastructure lead time requirements
- Services are managed by provider reducing your management responsibilities.
- Support and expertise of service is provided by the provider
- Scalability is greatly improved by provider services
- Immediate data security benefits can be realized and managed by the provider.
- Compatibility with current cloud services that the enterprise may be utilizing such as monitoring
Cloud Services run blockchain applications and it’s clear that the benefits are similar to what you would experience running perhaps your databases or virtual machines in the cloud.
Negatives of Using a Blockchain as a Service (Baas)
Cloud Computing as we know has many benefits of which some enterprises may or may not fully realize. Secondly, not all uses cases may realize the benefits due to the application frameworks, cost models or development models utilized.
For example, while working as a pre-sales architect in the data storage and cloud markets I can certainly say that customers that do not generally manage resources in house will likely not manage resources in the cloud well. Resource management is a must in cloud resources. I have seen cloud spend skyrocket by over 300% in just a few months and the cloud engineers have no idea why sometimes.
Some of the main negatives of using a Blockchain Cloud Service are:
- Cloud spending costs are not managed appropriately.
- Resources are centralized and blockchains by definition should not be centralized for solid use cases.
- Limited support for blockchain/ledger services on your provider of choice.
- Experienced professionals are in high demand and hard to find.
- Applications may not be portable once placed on a cloud provider
Cloud Services run blockchain applications and it’s clear that the negative is similar to what you would experience running perhaps your databases or virtual machines in the cloud.
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Want to learn how to install Hyperledger Fabric on AWS? Check out this post.