Understanding blockchain-as-a-service in small and medium enterprises (SMEs)

Blockchain is a rapidly maturing technology. Its applications are escalating at a faster pace. Businesses of all sizes and types around the world are leveraging blockchain-powered solutions in various business functions. As its demand is snowballing immensely, this technology is now being offered as a service model. Blockchain-as-a-service (BaaS) is an enterprise-level cloud-based business model. It allows users to build their digital products using blockchain while enabling companies to develop blockchain applications at a minimal cost. The BaaS model has substantial benefits and offers crucial opportunities to small and medium enterprises (SMEs).

Blockchain-as-a-service in SMEs provides efficiency, improved security, transparency, speed, cost advantages, and much more. It offers companies access to solutions like distributed ledgers, DApps, and smart contracts without requiring to host the network. BaaS acts as a catalyst, leading to the prevalent adoption of blockchain technology.

Why Blockchain-as-a-Service?

As third-party cloud infrastructure and management, BaaS allows all types of businesses to access blockchain-powered technologies without investing in in-house developments. This model is similar to other service models such as SaaS, IaaS, and PaaS. Blockchain-as-a-service business model supports Hyperledger Fabric, Ant Blockchain technologies, and Quorum. The global blockchain-as-a-service market is estimated to reach US$24.94 billion by 2027, at a CAGR of 39.5 percent.

The promise of the BaaS Model for SMEs

Thanks to its intriguing applications like smart contracts, document origin tracking, resource sharing, contract execution and spend rationalization, SMEs are showing greater interest in the BaaS model. It offers a way for businesses to stay ahead of technology without any risks. The Blockchain-as-a-service model has a ready infrastructure in place and built-in codes and modules, enabling users to customize the solution based on the requirement. The model also has a cost and effort advantage, assisting businesses to save cost and effort involved in employing developers, managing teams and expenses related to software, platforms and infrastructure.

As blockchain technology promises the immense capability to transform business operating models in the long run, blockchain-as-a-service is poised to bring huge opportunities throughout the SME landscape. Blockchain-as-a-service does not require companies or business professionals to begin everything from scratch. They can start development without building basic modules and systems.

With the BaaS model, SMEs can expand their businesses in other countries and garner wider access to trade financing sources. According to the World Economic Forum, blockchain could be instrumental in bridging the gap in trade financing around the world. Small and medium enterprises can also gain benefits of BaaS in the context of supply chain processes. Through this cloud-based blockchain, businesses can also launch projects in an environment that is agile, efficient, and secure. 

As per T-Systems, German global IT services and consulting company, the number of active blockchain projects is snowballing sharply. During 2018-19 alone, blockchain spending was projected to grow by 88 percent. But due to the lack of relevant know-how when deploying such projects efficiently the vast majority of blockchain projects have failed. This is where blockchain-as-a-service comes in.

In a nutshell, as a distributed, cloud-based application of blockchain, blockchain-as-a-service provides SMEs solutions including data storage, document tracking, and smart contracts, among others.