Blockchain is a distributed database that allows the distribution and sharing of digital data or information by millions of users or nodes through a decentralized mechanism. Initially, blockchain technology was designed to manage the list of records called blocks for Bitcoin, a type of cryptocurrency. Blockchain-as-a-service allows its users to take advantage of cloud-based services and solutions in order to build, host or use their own blockchain applications and functions on the blockchain, while all the complicated backend work is managed by the cloud service provider.
Bitcoin uses blockchain technology as it acts like an immutable ledger and offers the entire trail for any transaction that took place till date. This gives the technology a tremendous potential in offering services to almost every industry and is prognosticated to register rapid growth in the forecast period. According to The IBM Institute for Business Value, by 2018, blockchain solutions will witness investment for ‘deposit-taking’ from about 91% banks out of 200 surveyed banks of 16 countries. In the BFSI sector, banks are searching for ways and means to share financial data and customer information in a secured manner across their company and BaaS (Blockchain as a Service) is expected to play a leading role in the mechanism. All these factors are expected to propel the growth of BaaS as one of the modern software as a service offering in the coming years.
Individual clients or companies can use the blockchain technology to stay competitive in the market making the blockchain-as-a-service platform more advantageous. Implementation of BaaS model in smart payments is fueling the growth of the blockchain-as-a-service market. For instance, recently a new blockchain payments solution based on IBM blockchain technology was unveiled to provide both clearing and settlements of financial transactions on a single network by IBM, KlickEx Group, and Stellar.org. Whereas, complication involved in handling the infrastructure as well as the complex mathematical calculations in blockchain can restrain the blockchain-as-a-service market growth. Integration of the technology with the internet of things (IoT) to offer technologically advanced and efficient solutions across verticals is anticipated to pave the way for numerous opportunities in the blockchain-as-a-service market.
The global blockchain-as-a-service market segmentation is based on application, component, vertical, and region. The application segment is fragmented into payment, smart contracts, supply chain management, governance, risk and compliance management, identity management, and others. A smart contract is anticipated to have a substantial share in the global blockchain-as-a-service market. The component segment is bifurcated in tools and services. The vertical segment is categorized into BFSI, IT & telecom, healthcare, retail, manufacturing, logistics, government sector, media & entertainment, energy and utilities, and others (travel and hospitality & real estate). Owing to a high penetration rate of BaaS application in the banking and financial sector, BFSI segment is expected to register the highest share in the overall blockchain-as-a-service market. Regional segmentation of the blockchain-as-a-service market includes Asia Pacific, North America, Europe, Latin America, and the Middle East and Africa.
Major players operating in the global blockchain-as-a-service market are Microsoft, Ardor Nxt Group, IBM, SAP, AWS, HPE, Consensys, Deloitte, Infosys, Huawei, Accenture, and Oracle. Partnering with other leading firms is one of the business strategies incorporated by global players. Recently, Microsoft partnered with two Asian firms on blockchain platform for enterprises namely China Binary Sale Technology and High Cloud.