The announcement of IBM's Blockchain-as-a-Service platform came after the company had been exploring various ways it could participate in the blockchain space for over a year and puts it in competition with other tech heavyweights like Oracle and newcomer Amazon.
The announcement of its Blockchain-as-a-Service platform came after the company had been exploring various ways it could participate in the blockchain space for over a year putting it in competition with other tech heavyweights like Oracle and newcomer Amazon.
In early 2016, IBM participated in a funding round which raised over $60 million for Digital Assets Holdings, a financial blockchain start-up founded by former JP Morgan Chase executive Blythe Masters.
Additionally, in the same year, it announced that it was handing over 44,000 lines of code to the Linux Foundation as it the open-source project. The software was to be used as part of the Hyperledger project. Though IBM had written the code independently, it decided to join the open-source Hyperledger project as the company believes that blockchain technology has the potential to be applicable in a wide array of industries and can be better explored in this setting.
Explaining the move the Senior Vice President of IBM Research Arvind Krishna stated: “In just a few short months, IBM’s vision for making blockchain a powerful new business solution across multiple industries is becoming a reality as our clients begin piloting innovative new code, services and Z-Systems [mainframe computers] optimized for distributed ledgers. These advancements are making it easier for developers to move from understanding the potential of blockchain, to actually using it to change their business processes in powerful new ways.”
The Hyperledger Project: Fabric vs Composer
Following IBMs decision to participate in the Hyperledger project, the company began to offer a Blockchain-as-a-Service platform for its clients. It is important to note that the Hyperledger project is an open-source project that is supported by over 185 companies. It is also governed openly by the Linux foundation. The alliance of corporations who are part of the project is dedicated to advancing the use of decentralized ledger technology.
The Hyperledger operation currently has eight ongoing projects. However, IBM mainly focuses on two of the projects for its BaaS solution. These are Hyperledger Fabric and Hyperledger Composer.
Hyperledger Fabric is a framework through which it is possible to build blockchains that are able to adequately adapt to any industry. Fabric is designed to be used as a standardized and battle-tested blockchain base for creating platforms in a way that does not require a high learning curve for the companies seeking to integrate them. In addition, the Hyperledger Fabric architecture allows for smart contract operability. “Hyperledger Fabric allows components, such as consensus and membership services, to be plug-and-play. Hyperledger Fabric leverages container technology to host smart contracts called chaincode that comprise the application logic of the system.”
Why use IBM’s blockchain platform?
While IBM uses the projects developed within the Linux Foundation in its BaaS platform, it provides a greater level of features than when the software is accessed directly from the Linux Foundation.
IBM provides its BaaS platform as a cloud-based solution. The company believes that this provides prospective clients with a greater level of ease and security in comparison to other blockchain solutions. The company offers the platform at different price levels depending on the needs of the firm. To encourage startups to integrate blockchain technology into their operations, the company offers a starter plan that is cost-free for a period of thirty days.
In addition, the company offers its clients access to its in-house developers who help use the Hyperledger tools and framework so as to create a decentralized ledger that is well suited to the clients’ needs.
Who is using IBM’s blockhain platform?
Due to the fact that the IBM blockchain solution is permissioned and able to scale, it is well suited for big companies. As a result of its features, a number of well-known companies are using the platform.
To begin with, a group of leading banks in Europe have partnered with IBM to provide a solution that will help simplify cross-border trades for small and medium enterprises. The group is called the Digital Trade Chain Consortium and is made up of Deutsche Bank, HSBC, KBC, Natixis, Rabobank, Societe Generale and Unicredit.
Furthermore, global transport and logistics company Maersk announced its collaboration with IBM to create a blockchain-based solution for shipping. This collaboration is aimed at making the global supply chain more efficient through reducing unnecessary costs as well as increasing the processing speeds. The joint effort will also include input from a number of stakeholders involved in the global shipping process.
IBM’s integration of blockchain in the supply chain
Lastly, a group of companies involved in the food supply sector are working with IBM in order to substantiate ways through which the blockchain can be used to make the food trade safer for consumers. The consortium includes leading names such as Dole, Driscoll’s, Golden State Foods, Kroger, McCormick and Company, McLane Company, Nestlé, Tyson Foods, Unilever, and Walmart amongst others. Moreover, the project will also focus on ways through which business projects can be streamlined leading to greater profits.
IBM has also just revealed a partnership with jewellery-maker Richline Group – a part of Warren Buffett’s Berkshire Hathaway group of companies – to track the provenance of their precious metals and diamonds to ensure that they are ethically sourced. Dubbed Trustchain, the project includes other companies involved in the supply-chain from precious metal refiners and suppliers to jewellry retailers.
The BaaS sector is steadily growing, as is evidenced by the entry of companies like Oracle and Amazon into the sector. It is arguable that this is an indicator of the burgeoning interest and demand for blockchain-based business solutions. This also communicates a greater level of understanding of the virtues of blockchain technology and IBM is leading the mission to preach the technology.
IBM is one the technology giants betting big on the blockchain. In March 2017, IBM launched its Blockchain-as-a-Service (BaaS) solution and has long been involved in a range of distributed ledger trials in several different industries.