Amazon Unveils Plans to Provide Blockchain-as-a-Service

By Warwick Andersen, Rob Pulham and Georgia Mills

Amazon Web Services (AWS) plans to be one of a handful of tech companies providing blockchain-as-a-service (BaaS) for customers wanting to test the new technology without the costs or risks of developing it in house.  Other providers of BaaS include Microsoft, IBM, HP, Oracle and SAP.

AWS has partnered with Kaleido, a new blockchain business cloud service for enterprises.  Kaleido will offer its cloud services to host an Enterprise Ethereum-based, open-source blockchain platform, making Kaleido the first managed blockchain SaaS available on AWS.  The platform has been designed to be easy to use, as the uncertainty surrounding the new technology has prevented its widespread adoption.

CIO uncertainty is highlighted in Gartner’s 2018 CIO Survey, with only 1% of CIOs indicating any kind of blockchain adoption within their organisation, and up to 77% of CIOs saying their organisations had no interest in the technology.

Because blockchain technology is so new, BaaS offerings have been an attractive option, and IT providers – spurred on by customer inquiries – are quickly deploying both the consulting and technology backing.

One of the first software vendors to offer BaaS was Microsoft, which in 2015 offered BaaS on its Azure cloud platform. This service supports a variety of blockchain protocols, from simple protocols like Hyperledger through to more sophisticated ones like Ethereum, and Microsoft has announced that other protocols will be supported as they are developed.

IBM has also joined the BaaS space, launching a number of pilot projects with companies in the supply chain and financial services industries.

Amazon’s BaaS, however, is well positioned for adoption because of the already wide-spread use of its AWS cloud service by developers and enterprises in general.

One downside to the BaaS offerings is that it removes one of the most attractive aspects of blockchain – the ability to remove the middleman by enabling a peer-to-peer network controlled by its users, such as in financial services, where cross-border money transfers can be conducted without a banking intermediary, saving costs and improving settlement times.

One thing for sure though is that blockchain is here to stay and use is becoming more widespread. The support from another tier one vendor is testament to this.

Copyright © 2019, K&L Gates LLP. All Rights Reserved.