September 12, 2018
By Larry Myler
In late July, Google announced a partnership that would allow the multinational technology company to offer a cloud-based platform where they can develop and run blockchain-based applications.
Blockchain is a relatively new distributed ledger technology that allows for secure transactions. Itís the technology behind popular cryptocurrency bitcoin, but blockchain has a number of applications.
Blockchain-based smart contracts can help businesses automate a number of transactions and processes. For example, in supply chain management, a smart contract could be used to track delivery transactions from start to finish. In the real estate market, smart contracts can handle the transfer of titles and the exchange of funds.
With Googleís recent announcement, the company joins a growing list of major technology players that are now offering Blockchain-as-a-Service (BaaS). They include Amazon, IBM, HP, Microsoft, Oracle and SAP. Microsoft was one of the first software vendors to offer BaaS when it launched its Azure Blockchain Service in 2015. These tech leaders are working to provide businesses with all the benefits of blockchain technology without the associated costs of having to build a blockchain platform from scratch.
BaaS is helping businesses adapt to this new technology and utilize it as a business solution. Businesses that prefer to outsource the development of blockchain solutions can take advantage of BaaS services. And these new resources can help businesses increase efficiencies and take advantage of growth opportunities.
BaaS could be the next big thing for business-to-business companies especially. Until recently, many B2B companies have been unable to take advantage of the benefits of blockchain, but BaaS presents a promising opportunity. Here are three benefits of BaaS for B2B companies.
BaaS allows companies to test out the technology
One of the greatest draws of BaaS is that it allows B2B companies to try out blockchain technology before making a larger investment. Enterprises are still trying to work out how to implement blockchain on a large scale, but the industryís largest software providers are putting the technology to the test. With BaaS, these companies are allowing B2B companies to test the technology without having to expend capital costs related to on-sight development and hardware. BaaS eliminates the risk of deploying a blockchain platform in house.
ďEverybody works with cutting-edge technology, but it does not happen often that your software makes history for being the first of its kind, says Antons Sapriko, CEO of Scandiweb, a blockchain development service provider helping businesses accelerate new ideas.
The cost of hiring a coder to build a platform from the ground up can also be substantially prohibitive. As for 2017, the average annual income of a competent blockchain developer was $150,000-$200,000. And hourly rates can fall between $40 to $200 or more.
For B2B companies whose core functions have little to do with technology, a blockchain platform may never be important enough to implement in-house. But with BaaS, these companies can see the same benefits as those companies building their own platforms from the ground up.
BaaS addresses the limited talent pool issue
Despite the clear benefits of blockchain for B2B companies, the technology is still in its infancy. A small percentage of the international population have even heard of blockchain technology and an even smaller percentage are qualified to implement it.
There currently exists a shortage of blockchain coders, making it downright impossible for many B2B companies to utilize the technology. Of the 20 million software developers in the world, only approximately 0.1% know what a blockchain code looks like. And experts indicate there are no more than 60,000 coders qualified to adequately do this work.
In the meantime, while international education institutions work feverishly to produce more blockchain capable coders, BaaS companies are ensuring B2B companies can still benefit from those professionals currently holding expertise in this field.
BaaS can change the way B2B companies handle transactions
In 2016, global financial services institution Visa announced a new partnership with blockchain enterprise company Chain to develop a simple and fast way to process B2B payments across the globe. Often times payments at this level can be difficult for B2B companies to complete efficiently and securely, but with blockchain, Visa can offer companies a consistent process for managing settlements.
Making cross-border payments can often be an onerous and lengthy process even for corporations. But blockchain technology simplifies the process. Even though companies offering BaaS essentially serve as middlemen between B2B companies and blockchain technology, the hallmark of this technology is that it cuts out the middlemen in financial transactions by automating them. For this reason, transactions made on blockchain have the potential for faster than usual speeds. Companies like Visa are developing blockchain-based systems to execute near real-time transactions. And the amounts and destinations of these transactions arenít a barrier. With BaaS B2B companies can exchange high-value international payments.
By speeding up the process, BaaS can lead to real savings for B2B companies. A study by Accenture found that blockchain technology could help eight banks save at least $8 billion per year, or approximately 27%. Annual cost savings were predicted to reach as high as 38%, or around $12 billion.
If blockchain can help large institutions processing hundreds of thousands of transactions per day, save money, itís likely to help B2B companies as well.
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