Global Blockchain as a Service Market Research Report: Forecast (2022-27)

Market Definition

Blockchain as a Service is a third-party cloud-based infrastructure & data management platform for organizations that are building & operating Blockchain applications. It enables high levels of transaction traceability & helps the users save their time & expenses by building their Blockchain technology instead of spending resources to develop in-house tools. Further, with the exponential growth in the adoption of Blockchain technology in diverse industries, the demand for Blockchain as a Service is anticipated to grow at an immense pace in the forecast years.

Market Insights

The Global Blockchain as a Service Market is projected to grow at a CAGR of around 46.75% during the forecast period, 2022-27. The major factors fueling the demand have been the rising adoption of digital platforms by businesses due to the pandemic, the increasing requirement for supply chain transparency across verticals, and the need to reduce risks & complexities in payment systems.

In lieu of this, the implementation of blockchain as a service in business helps them secure the identity of digital entities as well as personal identities as it is stored in blocks in data structures. Thus, ensuring maximum security while minimizing the threat of losing the data. Further, it has gained significant traction in the historical years as it provides solutions for complex business issues while maintaining anonymity, immutability, transparency as well as fast & secure transaction.

Moreover, it enables businesses to use cloud-based solutions to develop, host, and customize their blockchain apps, smart contracts, and other business functionalities on the blockchain infrastructure managed by a service vendor. Additionally, with the evolution of digital currencies, such as cryptocurrency, several users have gained knowledge about blockchain, which has encouraged various end-use industries, such as BFSI, IT & telecom, healthcare, etc., to leverage the benefits of blockchain in their organization.

In contrast, banking & financial institutions are the major users of blockchain as a service, owing to the exponentially growing fintech industry across the globe. Besides, the increasing need for secure banking transactions, growing adoption of cross-border payments, digital ledger, scalability, and low processing costs are a few significant factors driving its growth in the BFSI industry.

In addition, banking & financial institutions in countries like India, China, the US, Canada, South Korea, etc., have invested heavily to adopt & explore blockchain technology, thereby fostering the market of blockchain as a service in the historical years. For instance:

• In 2018, the Industrial and Commercial Bank of China (ICBC) moved toward adopting blockchain technology to implement smart banking technologies & applications. The bank aims to improve the financial service as well as increase the security of financial data that are shared with third parties.

Moreover, the governments of various countries, including the US, Canada, India, China, Thailand, European countries, etc., have taken necessary initiatives to explore blockchain technology to boost innovations in the economy. The government of these countries has been investing significantly to utilize blockchain as a service in their public utilities, such as banks, airports, automobiles, etc., thereby creating numerous opportunities for blockchain as service providers, thus stimulating the BaaS market. For instance:

• In 2021, the Ministry of Electronics & Information Technology, India introduced a National strategy on Blockchain to create trusted digital platforms for citizens and businesses.

Thus, the rising demand for cloud-based, cost-effective, secured, scalable data management systems in businesses would further escalate the market of blockchain as a Service during the forecast period.

Key Trend in the Market

• Blockchain-based NFTs Becoming a Next Big Thing for Enterprise

The adoption of blockchain is creating several opportunities for enterprises by enabling seamless trading, exchanging, and sharing of digital representations, which are likely to spur new blockchain-based innovations. Further, as blockchain brought fungibility to the digital space & enabled exchanged value in the form of cryptocurrencies, now it is bringing non-fungibility to the digital space in the form of Non-fungible tokens (NFTs). NFTs are tokens used to represent ownership of unique items, such as art, collectibles, or even real estate. Furthermore, NFTs have potential applications in Metaverse & gaming platforms.

Moreover, the growing adoption of Metaverse can accommodate a wide range of NFTs, from cosmetic items to virtual property, digital passes, etc., which would pave new ways to share & enjoy virtual experiences. In addition, another application of NFT is in gaming, where it is extensively popular in play-to-earn games such as Axie Infinity. Therefore, NFTs are becoming a key feature of blockchain as a service in the future.

Market Segmentation

Based on Organization Size:

• Small & Medium Enterprises
• Large Enterprises

Of them all, large enterprises captured a major share in blockchain as a service during the historical period. The major factors driving the demand for BaaS in large organizations include decentralization of business processes, data security, transparency, and reduced operational costs. The increasing adoption of BaaS by large-scale players, such as automotive manufacturers, banking & financial institutions, and healthcare platforms, among others, have enormous resources to manage & operate. Therefore, to streamline the transactional & supply chain process, these enterprises have become the primary users of BaaS. It also paved the way for large organizations to increase transaction speed as well as build trust between transacting parties. For instance:

• In 2019, Tata Consultancy Services, an Indian technological giant, in collaboration with Microsoft & R3, developed solutions to drive scaled adoption of blockchain across industries. The adoption of blockchain provides anchor solutions such as skills marketplace, anti-counterfeiting of luxury goods, affordable mobility, shared telecom infrastructure for 5G, and loyalty & rewards programs.

On the other hand, the growing awareness and usability of BaaS tools & services among the small & medium-scale enterprises have catalyzed the adoption of blockchain as a service. The high adoption of cloud computing services in SMEs rather than investing in on-premises networking solutions would augment the implementation of BaaS during 2022-27.

Based on the End User:

• BFSI
• IT & Telecom
• Retail & Commerce
• Healthcare & Life Sciences
• Automotive
• Others (Energy & Utility, Media & Entertainment, etc.)

Among all, BFSI is the largest end-user of blockchain services globally, owing to the growing need for advanced and secure transaction models, the development of digital ledgers, the burgeoning demand for high transaction speeds, and the integration of smart banking operations. Considering this, the BFSI sector of the regions, such as North America, Europe, Asia-Pacific, etc., have been proactive in deploying blockchain as a service in their organizations to enhance the banking operations while ensuring the highest level of security of their client transactions.

• In 2017, IBM announced to build a blockchain technology for seven European banks, including Deutsche Bank, HSBC, KBC, Natixis, Rabobank, Societe Generale, and Unicredit, to facilitate international trade for small- & medium-scale enterprises.

Hence, with the growing need for smart banking & efficient and fast transactions, banks are adopting advanced technology platforms like blockchain as a service to record, track & manage transactions globally. This is expected to incline the growth of the blockchain as a service in the forthcoming years.

Regional Landscape

Geographically, the Global Blockchain as a Service Market expands across:

• North America
• South America
• Europe
• The Middle East & Africa
• Asia-Pacific

Of all the regions globally, North America held the largest market share in the Global Blockchain as a Service market during the historical period. The major factors contributing to the growth of the region are primarily the active government initiatives, the rising count of blockchain development projects, the increasing number of technological startups, and robust banking & financial industry integration of cutting-edge technologies to ease their operations, among others.

Furthermore, the US has been a key contributor to the growth of BaaS because of being a major global financial hub. Due to this, North America, particularly the US, has an epicenter of the BaaS market. For instance,

• In 2017, the US government awarded research contracts, with a total worth of around USD2.25 million to three startup companies viz., BlockCypher, Digital Bazaar, and Evernym, which are working on a blockchain project.

Moreover, the Asia-Pacific Blockchain as a Service market has shown significant growth during the historical period & is anticipated to expand at a phenomenal pace. The growth is backed by several factors, including the increasing acceptance of Blockchain technology in emerging economies, such as China, India, Japan, etc.

In addition, the region has witnessed the innumerable establishment of new fintech startups, which have advocated market growth to a greater extent. Therefore, the supportive government measures to enhance the adoption of technology across varied industrial sectors in the region would cement the Blockchain as a Service market in the forecast years.

Recent Developments by the Leading Companies

• In 2019, MIMOS Berhad, Malaysia’s National Applied Research and Development Centre, in collaboration with Oracle, announced its plans to leverage the blockchain platform to improve traceability, trust, and other supply chain processes to enhance the ease of doing business in Malaysia.
• In 2019, Microsoft Corp., in a strategic partnership with J.P. Morgan, announced to accelerate the adoption of enterprise blockchain. Under the partnership, J.P. Morgan developed a distributed ledger platform, Quorum, which is accessible through Azure Blockchain Service & would enable customers to build cloud-based blockchain networks.
• In 2018, Amazon launched the Amazon Managed Blockchain Service that underpinned blockchain networks & records millions of transactions.

Market Dynamics:

Key Driver: Rising Security Concerns to Spur the Growth of Blockchain as a Service

Blockchain provides secured business transactions as records are secured through cryptography. Data stored in blockchain are reliable, accurate, timely, and readily available, due to which various end-use industries, including healthcare, BFSI, media & entertainment, automotive, etc., are incorporating blockchain technology.

Further, the blockchain implementation in the BFSI sector helps the industry to create more secure networks for conducting digital transactions & gain the trust of customers to invest & trade through cryptocurrency. Moreover, the outburst of COVID-19 accelerated the adoption of cloud-based digital platforms, which led companies to increase their interest in secured digital ledger technology.

Thus, with the adoption of blockchain as a service, companies are enhancing their operations, security, and transparency levels to new heights.

Possible Restraint: Lack of Technical Knowledge Regarding Blockchain Technology to Hinder the Market

The lack of knowledge & awareness to understand complex blockchain technology is one of the restraining factors hampering the growth of blockchain as a service in some parts of the globe. Additionally, organizations are facing issues with their legacy blockchain infrastructures & lack of technical expertise, preventing them from adopting blockchain as a service, which is a major barrier to mainstream adoption.

However, large enterprises & SMEs are experimenting with blockchain, but only a few have implemented a decentralized solution. Thus, the low confidence of many organizations in sharing critical data with a third-party vendor may hinder market growth.

Growth Opportunity: Application of Blockchain Technology in the Automotive Sector

Blockchain-based solutions provide several tangible benefits to the end-use industry since they offer operational transparency. Due to complex supply chains, a multi-stage manufacturing process, regulatory framework, car dealership network, and aftersales services are some of the factors that necessitated the adoption of blockchain technology in the automotive sector. Further, the application of blockchain as a service in the automotive industry has been growing notably.

This can assist the automotive manufacturers in enhancing their supply chain networks & creates new ways for consumers to track vehicle history, submit insurance claims, share ownership, etc., while reducing human intervention & control.

Therefore, the automotive industry would be a lucrative opportunity area for blockchain as a service in the upcoming years.

Key Questions Answered in the Market Research Report:

1. What are the overall statistics or estimates (Overview, Size- By Value, Forecast Numbers, Segmentation, Shares) of the Global Blockchain as a Service Market?
2. What are the region-wise industry size, growth drivers, and challenges?
3. What are the key innovations, opportunities, current & future trends, and regulations in the Global Blockchain as a Service Market?
4. Who are the key competitors, their key strengths & weaknesses, and how do they perform in the Global Blockchain as a Service Market based on the competitive landscape?
5. What are the key results derived from surveys conducted during the Global Blockchain as a Service Market study?