Case Studies

Rising demand for Blockchain-as-a-Service (BaaS) on the global market

July 7, 2022

An increasing number of small, medium-sized, but also large companies are adopting Blockchain-as-a-Service (BaaS) solutions to streamline their operations. Besides the advantages of BaaS such as security, high immutability, secure decentralization, and cost-effectiveness, other factors driving the growth of the market include the need for faster and more efficient transactions, the adoption of blockchain technology by enterprises, and rising demand for cloud-based services.

According to a Fortune Business Insights study, the global Blockchain-as-a-Service market will reach USD 24.94 billion by 2027 (up from USD 1.90 billion in 2019), exhibiting a CAGR of 39.5% during the forecast period. The report also states that multiple advantages of BaaS for small and medium enterprises (SMEs) will fuel the market growth.

Another takeaway from the report is that blockchain technology emerges as an optimal solution to many challenges faced by small and medium-sized enterprises, such as access to trade financing, bank loans, and cash flow difficulties, to name a few. “SMEs looking to expand their businesses in foreign lands can gain wider access to trade financing sources using BaaS as this technology is decentralized and cuts out middlemen from the process.”

In addition, a report from Transparency Market Research states that over the past years, there has been significant growth in the adoption of Blockchain-as-a-Service (BaaS) technology by insurance companies and well-established banks from across the globe. “Due to the use of distributed ledger technology (DLT), blockchain helps companies minimize the risk of fraud and boost transparency across bank transactions. Owing to this factor, the global Blockchain-as-a-Service market is expected to attain promising sales opportunities from the banking industry in the years ahead.”

What is Blockchain-as-a-Service?

Blockchain-as-a-Service (BaaS) involves the creation, management and maintenance of cloud-based networks for companies that design, develop and build blockchain applications. The emergence of the BaaS model has signalled an important step in the evolution of blockchain technology as it indicates a step away from the initial use case of blockchain, cryptocurrency, marking the expansion of the technology in other areas.

At its core, BaaS enables beneficiaries to exploit cloud services to build, host and operate blockchain-based applications without needing to concern themselves with the technical complexities, costs, and operational overhead involved in creating, configuring, maintaining, and operating a blockchain.

BaaS offers several pre-built applications and services that can be used to create various blockchain-based applications, including distributed ledgers, digital identity management systems, and supply chain management systems. In terms of components, the BaaS market is segmented into services and tools. Payments, supply chain management, smart contracts, governance, and identity management are some of the application segments on the market.

The advantages of BaaS

As more and more businesses around the globe are looking to include blockchain technology in their operations, there are several issues – including complex structure, configuration, infrastructure aligning – that make the adoption rate of this ground-breaking technology slow. To counteract this and to offer a solution to the problem, multiple tech companies have launched the Blockchain-as-a-Service (BaaS) model which has various advantages such as:  

Cost-effectiveness: vendors provide all the necessary hardware components, servers, middleware, updates, and storage;

High availability: the application is available anytime and anywhere as long as there is an internet connection;

Effective maintenance: the service provider is responsible for maintaining the blockchain infrastructure which gives beneficiaries ample time to focus on their application and develop new features;

Quick deployment times: achieve the desired results faster.

Introducing Modex’s BaaS offering

Modex, one of the earliest players in the enterprise blockchain space, is pursuing a Blockchain-as-a-Service model in order to make blockchain technology easier to adopt and implement at the enterprise level in any industry use case. Using this approach, Modex helps companies streamline their operational flows, boost productivity, and enhance security through blockchain-based features like data integrity, immutability, traceability, and decentralization.

Market trends

Global Insight Services takes a look at some market trends. While there’s a growing recognition of the need for privacy and security when it comes to storing and managing data, a major trend is represented by the shift towards more private and permissioned blockchains. “Private and permissioned blockchains offer a number of advantages, including the ability to control who has access to data and the ability to ensure that data is only accessible to authorized users.”

At the same time, the demand for cloud-based services is increasing as enterprises move away from traditional on-premises solutions. Cloud-based solutions are more flexible and scalable and offer pay-as-you-go pricing models that can save enterprises money. “The need for faster and more efficient transactions is driving the adoption of blockchain technology. Blockchain-based solutions can settle transactions in minutes or seconds, compared to the days or weeks it can take with traditional systems,” states the report.

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