What is Block Chain As A Service BaaS

What is Blockchain As A Service (BaaS)?

Interest in using the blockchain is increasing, with a report by Netscribes Inc projecting compound growth of 43% per year with the market reaching a 13.96 billion market by 2022. Once an organisation has chosen to deploy a blockchain the next step will be to choose a deployment method, one option is Block Chain` As A Service (BaaS). In this article we look to understand what is BaaS, what are the advantages and disadvantages of BaaS and who are the main players in this area. If you want a reminder on what blockchain is, check out what is the blockchain?

Why use the Blockchain?

First before jumping in and deploying a blockchain organisations need to assess if this is the correct solution for them.  Previously we discussed the primary factors that would drive the decision to use a Blockchain v Database, in summary an organisation would look to a blockchain when the data being gathered was coming from multiple untrusted parties and immutability was important.

What is Block Chain As A Service (BaaS)

In a traditional enterprise blockchain deployment you would need to purchase servers, physically rack kit, then install and then configure the system.  BaaS offers a radically simplified route to blockchain by paying a company to setup and configure the system on your behalf, this make blockchain a software offering like Gmail. With Gmail rather than setting up your own e-mail servers and infrastructure you just logon and can get started straight away, similarly BaaS allows you to consume blockchain as a service without the time to deployment and ongoing management expected in a traditional deployment.

Advantages of BaaS

Blockchain as a service is quickest way to deploy a blockchain solution since all the necessary infrastructure and initial configuration are completed by the cloud services provider. This means you don’t have to wait for purchasing, delivery, installation and configuration, you are ready to hit the ground running.  Some of the other advantages of BaaS include:

  • Skills – One of the first challenges a business will face wishing to deploy blockchain will be finding the necessary skills and staff to deploy and maintain the solution, since blockchain is such a new technology. BaaS takes away the burden of the initial setup and ongoing infrastructure maintenance
  • No upfront costs – As BaaS is consumed as a service generally there will be no large upfront cost as there would be with self-owned kit.
  • Predictable costs – Costs will generally be based on a monthly billing model that can be projected. There should be no unexpected costs such as managing a hardware failure
  • Elastic – The cloud based hosting and monthly OPEX costing model allow projects to be quickly scaled up or down to meet requirements
  • Accuracy of deployments – Since most BaaS deployments are template driven they can be deployed accurately and in a repeatable manner with no differences
  • Risk – the OPEX model and speed of deployment allow companies to quickly test if a blockchain is suitable for them without a large upfront investment
  • Resilient and secure infrastructure – cloud providers are able to pool resources and provide datacentres with far greater capabilities than the standard company.

Disadvantages of BaaS

  • Centralization – A key aspect of blockchains is that they are a decentralized infrastructure. By hosting it in a single cloud provider this does create a degree of centralization
  • Restrictions / policy – Some organisations may be governed by internal policy or legal requirements that require all data is kept on company property
  • Lock-in – You do not own or control the infrastructure you are putting your total trust in the cloud provider. Organizations may find it difficult to migrate their services from one vendor to another
  • Cost – Whilst BaaS removes the pain of a large initial investment cloud computing is often more expensive than onsite when assessed over the longer term. Organizations wishing to use the blockchain should compare costs between self-hosting and BaaS
  • Limited control – As the infrastructure is controlled by the service provider there is limited flexibility in the backend infrastructure and the customer can just manage blockchain

Blockchain as a service providers

The next step for an organization who has selected to deploy blockchain through BaaS will be to select a service provider, there are several key players in this area:

 Oracle Blockchain Cloud Service

Oracle have been known as a key player in the database area for many years. They have continued their tradition of databases with the announcement of a blockchain service as part of their Cloud offering.

hyperledger logo

Oracle’s blockchain is based on open source Hyperledger Fabric . Hyperledger is an opensource blockchain first developed by the Linux foundation in 2015.  The open source nature of the project allows users to directly contribute to its development and allows a clear view of the roadmap. Also being based on the opensource Hyperledger means there is no cloud vendor lock-in since the blockchain network can be extended to on premise and other clouds based on Hyperledger.

Functions are easily exposed via API, to allow developers to make application integration. Oracle have further enhanced integration by offering out-of-the-box connectors and sample smart contracts for other Oracle SaaS applications

IBM Blockchain

IBM blockchain is also based on Hyperledger Fabric, there is no surprise here since IBM were a significant contributor of code in the early days of the opensource project. IBM offer a number of monthly packages including what they call Starter Membership Plan which is free for the first 30 days.  Their starter plan includes a one click setup and industry code samples. IBM also offers integration with its other services such as big data platform Watson to allow in-depth analytics analysis.

Microsoft Blockchain

Microsoft were early to market first offering BaaS in 2015 Like IBM and Oracle they have an offering based on Hyperledger. But they offer enterprises the most choice of blockchain technology by also supporting Corda and Ethereum. No matter which blockchain is chosen Microsoft offers a simple single click deployment that allows you to get up and running in minutes

R3 Corda blockchain available on microsofts platform

Corda like Hyperledger is opensource distributed ledger technology developed by R3 with a focus on financial and regulated transactions. Key features:

  • Privacy – transaction propagate only to necessary nodes
  • Built for financial markets
  • Smart contract capable
  • Regulator – sled regulator / supervisor nodes
  • Integration – query and join the ledger to existing DB with SQL and language such as Java

R3 are working with over 200 banks and financial institutions to develop the product.

AWS Blockchain Templates

AWS were late to the game just launching their service in April 2018. AWS are offering Ethereum and Hyperledger based blockchains. Both blockchain are deployed via templates which allow the blockchains to be stood up in minutes in just a few clicks, this AWS blog post shows the exact steps to get an Ethereum network up and running.

Conclusion

Blockchain as a service office companies an exciting opportunity to be able to dip their toe into the water with blockchain technology to experiment and see how they could harness in their business without large upfront costs capital investment and employee training.

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