Blockchain as a Service (BaaS) is a quick and easy way for startups and businesses to develop their own blockchain applications without hiring a development team. BaaS not only reduces costs, but risks as well. It allows a much faster time to market for testing and launching blockchain applications and smart contracts. For instance, Amazon AWS provides templates using Hyperledger or Ethereum for businesses who want to develop on a private or public network respectively.
The advent of BaaS has been a crucial milestone in the blockchain space. The concept has derived inspiration from and is very similar to that of Software as a Service (SaaS). Many organizations are becoming increasingly inclined towards BaaS. This is because many businesses find it difficult to acquire the resources required for complete blockchain implementation. Most of the time, they are hesitant in adopting costly blockchain solutions. BaaS offers the perfect solution to this problem.
According to Fortune Business Insights, the worldwide BaaS market size was estimated at USD 1.90 billion in 2019 and is projected to reach USD 24.94 billion by 2027.
This new business model comes as a gamechanger to several industries. Companies can save up on a lot of money by outsourcing blockchain development. They are generally provided with a BaaS team that sets up and maintains cloud-based blockchain networks. BaaS has been embraced by many cloud vendors like AWS, Azure, Microsoft, Alibaba, and Oracle.
In this article, we will take a closer look into what BaaS is, along with its top providers and associated benefits.
Blockchain as a Service forms the backbone of several blockchain applications. It enables businesses to focus on building blockchain applications by leveraging the managed services of a scalable blockchain cloud service infrastructure.
Blockchain as a Service (BaaS) lets you use cloud-based solutions to develop, host and use your own blockchain apps, smart contracts etc. Similar to SaaS, where software access is offered on a subscription basis, BaaS provides companies with access to a blockchain network of their required specifications without them needing to build their own blockchain. Essentially, it refers to third-party cloud-based infrastructure and management for organizations who want to develop and operate blockchain applications.
Through this, companies are provided with an outsourced service provider who will set up all the blockchain technology and infrastructure for a fee. Once everything has been set up, the vendor will continue to handle the complex back-end operations for the client. Generally, vendors will offer help with support activities, such as bandwidth management, suitable allocation of resources, hosting requirements, and data security features.
Several organizations have begun realizing the importance of incorporating emerging technologies like blockchain in their business. Unfortunately, this can be a tedious and expensive process. Since blockchain is still gaining traction, it can be challenging to find human resources with enough technical experience to manage such infrastructure. Additionally, the associated technical complexities, lack of domain expertise, operational overhead costs and infrastructure maintenance involved in building and operating the blockchain can discourage organizations from implementing the technology in their business.
By making use of a BaaS provider, companies will gain access to experienced blockchain developers who can help them with development and deployment of blockchain networks. The best part is that they won’t have to worry about startup and overhead costs at all. This makes it much easier for organizations to incorporate blockchain technology into their operations at low costs and greater efficiency.
When a company enters into a Blockchain as a Service agreement with an IT company, they are essentially agreeing to pay the vendor to take care of their blockchain infrastructure. The vendor will set up all the required Blockchain technology and infrastructure for the customer for a certain service fee that has been previously agreed upon. The BaaS provider deploys the necessary resources and leverages the appropriate technology and infrastructure to set up and maintain blockchain connected nodes on behalf of the customer.
Depending on the customer’s business requirements, the BaaS partner may configure the Blockchain network on any distributed ledgers such as Ethereum, Bitcoin, Hyperledger Fabric, R3 Corda, Quorum, Chain Core or BlockApps. Additionally, the BaaS partner takes responsibility for the maintenance of all the critical Blockchain-related artifacts and keeping the infrastructure up and running. By using this model, companies can focus on their core businesses and marketing strategies while depending on the BaaS partner to handle the Blockchain infrastructure and its performance.
Before choosing a Blockchain as a Service (BaaS) partner, you need to carefully analyse each provider to gauge the most suitable fit. This can be challenging due to the lack of guidelines available in the BaaS market. However, there are some major points that you should consider while choosing a vendor. These include-
While choosing a partner, make sure that they have sufficient experience in the BaaS field. You can do this by checking out their previous projects, portfolio of work etc. You can also have a look at the testimonials given by other clients about the work that they have done. Ask for credentials and recommendations wherever possible.
The quality of your blockchain infrastructure can make or break your business. This is why you should ensure that the vendor you work with prioritizes quality over all else. Take a look at their processes and standards during development. Analyze their previous work and try to assess the quality of their services through it.
Security is the most important consideration that needs to be taken into account in business. Look for any vulnerabilities in their implementation plans and make sure that you discuss all of your reservations with them.
Assess their expertise in the deployment of cloud-based solutions for operating systems that are like the ones that your organization uses. Ensure that the new blockchain infrastructure will be able to effortlessly integrate with your legacy systems.
Lastly, try to find a vendor that provides good value for money. Evaluate various pricing options and come to a decision based on your budget.
Microsoft sparked the BaaS revolution when it founded Azure Blockchain Service in 2015. They partnered with the blockchain development firm Consensys to develop Microsoft Azure, which is based on the Ethereum Blockchain. Azure enables users to develop public, private and consortium blockchain environments with industry-grade frameworks and bring their blockchain apps to market.
Features of Microsoft Azure:
Amazon offers a fully managed blockchain service focused on scalability. The managed service is available using Hyperledger and Ethereum as the underlying protocols. .
Features of Amazon Managed Blockchain:
ChainStack, a blockchain platform as a service, released its managed R3 corda service that gives enterprises access to the one-click deployment of cloud-based Corda nodes.
Features of R3 Corda Service:
4. SAP Cloud Platform Blockchain
SAP’s BaaS resides in the SAP Cloud Service and does not require any on-premise software or hardware. SAP’s Blockchain-as-a-service platform performs as a blockchain cloud service, machine learning service and provides support to IoT within a single ecosystem.
Features of SAP’s Leonardo:
IBM uses a permissioned blockchain infrastructure to provide a modular architecture, execution of smart contracts, configurable consensus and membership services.
BaaS makes it much easier for companies to adopt blockchain technology faster and in a more cost-effective manner. However, it is important for these companies to choose their BaaS providers wisely. If you need any help with blockchain development, feel free to contact us.