Microsoft and IBM want to own your blockchain

Blockchain-as-a-Service (BaaS) is one of the newest and most intriguing trends in the blockchain ecosystem. In recent months, Microsoft and IBM have launched new BaaS offerings to incorporate blockchain technologies as part of their cloud offerings. Beyond the strong validation, the entrance of incumbents like Microsoft and IBM can have a profound impact for the blockchain market.

Blockchain graphic

A few days ago, Microsoft announced the release of Project Bletchley, a new addition to its blockchain technology stack. Conceptually, Project Bletchley expands the blockchain capabilities within Azure to a new level by complementing the distributed ledger with a series of building blocks that will enable enterprises to build business solutions powered by the blockchain. The release of Project Bletchley is the latest major step from Platform-as-a-Service (PaaS) incumbents to incorporate blockchain technologies as part of their cloud offerings. The industry has even coined a new term for this movement: Blockchain-as-a-Service (BaaS).

BaaS is the latest hot trend in the rapidly changing blockchain ecosystem and Microsoft is not the only PaaS provider jumping on it. IBM and Amazon have also been incredibly active in the blockchain space courting startups and system integrators to leverage their respective PaaS infrastructures in their blockchain solutions. In her recent appearance at the Code Conference, IBM CEO Ginni Rometty listed the blockchain as one of IBM’s major areas of focus together with IBM Watson. This is a very remarkable statement if we consider that IBM’s BaaS efforts are only a few months old. Beyond all the hype, there are very important factors that are contributing to establish BaaS as one of the most relevant technology movements in the blockchain and cloud spaces.

Why BaaS?

The main purpose of BaaS is to enable the backend capabilities required for blockchain solutions. Building business solutions powered by the blockchain is far from an easy endeavor. Setting up and operating a blockchain environment entails major infrastructure and development challenges. Additionally, blockchain solutions typically require infrastructure and functional components that are not included in the blockchain.

BaaS enables blockchain capabilities as first class PaaS services. From a functional standpoint, a BaaS model allows developers to build solutions that seamlessly combine the capabilities of the blockchain with typical platform and infrastructure services such as storage, middleware, messaging, and other functional building blocks of sophisticated software solutions. More importantly, BaaS provides a seamless model to scale and manage a blockchain topology without deploying any proprietary infrastructure. The viability of the BaaS model is still being evaluated, however, at first glimpse there are some tangible benefits we believe this type of platform will bring to blockchain solutions:

  • Blockchain infrastructure simplicity: BaaS solutions drastically simplify the experience of provisioning, managing, and operating private blockchains.
  • Platform and infrastructure services: BaaS expands the capabilities of the blockchain with PaaS services in relevant areas such as storage, messaging, middleware, security, etc.
  • Developer and partner communities: BaaS solutions open the blockchain to the broad developers and system integrator communities of PaaS providers like AWS, Azure, or Bluemix.
  • Global availability: The global nature of PaaS infrastructures allows for the provisioning of the blockchain in many regions of the world.
  • Scalability: BaaS provides elastic scalability models to blockchain infrastructures.
  • Management: BaaS solutions can now leverage the sophisticated management and monitoring tools included in PaaS solutions.
  • Hybrid cloud models: IBM and Microsoft are making huge progress in their respective hybrid cloud stacks. As a result, very soon organizations should be able to run hybrid blockchain environments across their data centers and their PaaS environments.
  • Cost: The pay-as-you-go model of PaaS solutions should drastically simplify the cost of provisioning and operating blockchain environments.


The release of Project Bletchley expands some of the capabilities of the blockchain with new building blocks in areas such as security, middleware, and business logic. Project Bletchley follows the release of Azure’s BaaS platform last November. In the last few months, Microsoft has been incredibly active expanding the adoption of its BaaS offerings, establishing strategic alliances with some of the most relevant blockchain software and solution providers in the market.


IBM has been another pioneer in the adoption of BaaS solutions. A few months ago IBM announced the availability of its BaaS solution, part of which includes devops services as part of IBM Bluemix. IBM also announced the open source availability of the Hyperledger Project which attempts to make the blockchain completely open source and available to enterprise developers.


Amazon Web Services (AWS) has been the biggest absence in the BaaS movement — but that’s about to change. Last month, AWS announced that it will collaborate with New York City-based Digital Currency Group, one of the biggest investors in blockchain firms, to provide such a service so the blockchain providers in DCG’s portfolio can work in a secure environment with clients who include financial institutions, insurance companies, and enterprise technology companies. This type of strategy is likely to end up with the creation of a new BaaS platform as part of AWS.

Is Google Cloud next?

Google has been incredibly quiet when it comes to blockchain technologies. However, in order to remain competitive with the other PaaS incumbents, Google Cloud is likely to incorporate BaaS capabilities in the near future. BaaS certainly fits Google Cloud’s model of investing in futuristic technology areas, such as artificial intelligence, in order to bridge the gap with PaaS market leaders like Amazon and Microsoft.

Is BaaS a good thing for the blockchain?

As mentioned before, BaaS models bring some very immediate benefits to blockchain solutions. However, the BaaS movement also brings new challenges to the world of the blockchain. Fragmentation and interoperability rank among the biggest concerns introduced by BaaS solutions. With each PaaS provider developing its own set of capabilities, it is hard to determine how much of the original blockchain building blocks will remain consistent across different BaaS solutions. Despite those challenges, BaaS seems to be a definitive step in the right direction to streamline the adoption of the blockchain.

Copyright © 2016 IDG Communications, Inc.

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