Blockchain and SaaS, the rise of Blockchain-as-a-service (BaaS)
At a Glance
Reports have stated that blockchain technology would soon become a prerequisite for the software industry and SaaS models, considering the benefits it offers. There are numerous advantages that Blockchain-as-a-Service (BaaS) brings to the table
A report by FinancesOnline enunciated twelve major trends for SaaS in 2021 and 2022. Among the lot is the technology that has taken center stage in today’s cryptocurrency discussions and trading – Blockchain. According to Gartner, Blockchain would generate $3.1 trillion in its business by 2030, after its adoption rate increases from 2023.
While there remain lesser connections between the two trending topics, the advantages that Blockchains bring to the table for SaaS providers are many, as per the report. Starting with building foolproof systems and sidestepping the security challenges associated with database systems, the advantages are extended to enhancing business reliability and increasing customer loyalty.
It is also reported that the technology offered is set to massively disrupt SaaS verticals in the areas of tax collection, online payments, auditing, government borrowing, and compliance.
According to a Forbes report, based on an Accenture prediction of the growth of blockchain, once there comes a simplified approach to deploy smart contract (terms and conditions in transaction codes) and blockchain, there would emerge newer opportunities. It stated that a significant evolving trend in the domain was Blockchain-as-a-service (BaaS), the most worthy one to watch out for.
What is it?
Blockchain, in layman terms, is blocks of connected data in databases. These data are coded using cryptography for enhancing privacy and security and are stored in chronological order. The data stored cannot be altered and people from across the globe could access the same information.
BaaS involves the third-party creation and management of cloud-based networks for companies who build these blockchain applications. A report from Investopedia compares it to a web host that runs on the back-end operation for a block-chain based app or platform. Reports elucidate that the technology would enable developers to write and execute smart contracts without wasting much time managing and deploying the blockchain solution.
The Forbes report, as mentioned above, explains how the technology works in a sector such as healthcare where information between healthcare providers is to be kept flowing.
“So, let’s say in this context your application is based on exchanging patient information between hospitals, insurance companies, and pharmacies. Your traditional application connects to software that provides a blockchain-based gateway that lets you store and process information from blockchain in the form of blockchain as a service,” Neeraj Sabarwal, an official member of the Forbes Technology Council, stated.
How does it influence SaaS?
A report from Augurian, a digital marketing agency, enunciates the numerous benefits that Blockchain can offer for SaaS providers. To begin with, the integration would bring cryptocurrency as a payment option to the table. Having a BaaS would most likely make crypto payments simpler. Also, this brings with it, another alteration in the type of companies – the ones that are more compatible with blockchain technology. Another blockchain effect on SaaS companies will be an increase in products, solutions, and services compatible with blockchains.
Automation of various processes is another advantage of integrating blockchain technology with SaaS. According to a Tata Consultancy Services (TCS) research paper on the impacts of Blockchain technology on software development, there is scope to automate many areas in SaaS-based businesses.
According to the report, SaaS product companies would effectively manage processes such as payment management, metering functionality, validation, verification, and authentication. One particular area where drastic improvements would be made is in the billing cycles for SaaS companies. This could reduce the dependency on human intervention and help eliminate delays, making transactions trustworthy and secure.
Secondly, software products hold bulk personal data, which are exposed to threats as it is being collected through multiple digital channels such as mobiles, desktops, and wearables. This results in a vast amount of scattered personal data across the ecosystem. As more customized products are created, there needs to be enhanced security and transparency as well. Blockchain would contribute significantly to trust-building.
We also recommend the provisioning of personal information over blockchain-as-a-service solutions, so that the information is even more secure, used only when required, and that too by the right entities and with an auditable record of usethe researchers summarized.
Is it already here?
A CNBC report in 2018, quoting Kash Rangan, a Bank of America research analyst and the managing director of Goldman Sachs, stated how companies such as Amazon, Microsoft and Oracle stood to benefit from the adoption of blockchain technology.
Amazon will benefit from incremental cloud services demand from Blockchain implementation, while improved supply chain tracking should make Amazon’s retail operations more efficientKash Rangan, a Bank of America research analyst and the managing director of Goldman Sachs
Mr. Rangan added that the potential beneficiaries could incorporate blockchain in their existing cloud computing operations to improve their supply chain operations and resolve the challenges in them. Amazon asunder, Azure could also make use of the BaaS on its cloud.
“BaaS on Azure offers services such as smart contracts and other third-party apps, and should benefit as use of blockchain on Azure increases,” Rangan said.
IBM, for instance, makes use of ‘Hyperledger Fabric blockchain platform,’ hosting large-scale software-as-a-service blockchains from a variety of industries such as healthcare, entertainment, insurance, retail, and supply chain.
It would be interesting to see how the BaaS domain develops further and how it impacts the growing adoption of SaaS and cloud computing services.