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The global blockchain-as-a-service (BaaS) market size was USD 1.90 billion in 2019 and is projected to reach USD 24.94 billion by 2027, exhibiting a CAGR of 39.5% during the forecast period.
Rising adoption of blockchain-as-a-service (BaaS) tools and services among small and medium enterprises to build their blockchain application, smart contracts and payment system is expected to drive the market growth during the forecast period. Small and medium enterprises are leveraging various benefits of BaaS services, including secure decentralization, high immutability capability, and efficiency, cost-effectiveness, security, and others. Further, the evolvement of cryptocurrency and initiatives to spread awareness and popularity of blockchain-as-a-service among large enterprises is expected to boost the BaaS market growth.
Also, rising investment in various projects based on blockchain service technology by countries such as the US, Japan, the U.K., and others is expected to propel the market size during the forecast period. For instance, in 2019, the government of South Korea invested around USD 800 million for the development of blockchain services.
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Rising Demand for BaaS Based on Cloud Platform to Drive Market Growth
Rising demand for blockchain services based on cloud platform among large enterprises is expected to be one of the key blockchain-as-a-service market trends. BaaS services based on cloud help customers to expand applications such as enterprise resource management (ERP) systems, security management systems, and others. To cater to the rising demand for BaaS services, key players in the market are focused on developing blockchain-as-a-service tools and services based on cloud platforms by completing strategic mergers and partnerships. For instance, in November 2018, Microsoft Corporation partnered with the consortium R3. This partnership assists to develop advanced blockchain services based on Microsoft’s Azure cloud platform. Similarly, Oracle Corporation launched the “Oracle Blockchain Cloud Service” to assist clients in various industries, including manufacturing and supply chain with cloud services.
Growing Adoption of Distributed Ledger Technology based on Advanced Analytics to Aid Market Growth
One of the emerging market drivers is the rising adoption of distributed ledger technology (DLT) based on advanced analytics. DLT is a decentralized system used to record transactions with advanced analytics and secure mechanisms. Distributed ledger technology based on advanced analytics supports the payment system for digital currency to operate in a decentralized secure mode. This operation helps to eliminate the need for mediators to centralize processing. Blockchain services based on the DLT system help to monitor and trade through digital currency. DLT provides a robust atmosphere for sharing data in real-time in a secure mode. Several countries including the U.S., Germany, and others are promoting and adopting the use of blockchain services based on the DLT system. Governments in these countries are adopting blockchain services based on DLT systems to support SMEs and enhance fiscal efficiency. For instance, in May 2016, during the launch of “America Innovation Roadshow”, the government of the United States adopted blockchain services based on distributed ledgers for their international associates. With the rise in adoption of DLT based blockchain services, the market demand is expected to get a boost during the forecasted period.
High Initial Cost to Inhibit Market Growth
To develop advanced technologies, huge investments and venture capital funds are required to set up infrastructure and maintenance architecture. However, the process of setting up and operability is much more complex and require exhaustive resources. The process also consumes a huge amount of energy, bandwidth, data centers, cooling systems, network components, and others. Lack of funds and investment might be considered as one of the market restraints for the growth of the market for the next few years. Further, factors such as uncertain regulatory and government standards are also expected to limit blockchain-as-a-service market growth.
Rising Demand for BaaS Tools across BFSI Sector to Aid Market Growth
Based on components, the market is segmented into tools and services. Among all segments, the tools segment held the largest market share in 2019. The growth in the segment is owing to the rising demand for BaaS tools across BFSI organizations for advanced and secure transaction models in their business units. BaaS tools help users to leverage cloud-based services to build, host, and monitor their blockchain applications, functions, smart contacts, and others. Several banks and financial organizations are focused on adopting blockchain tools in their business models, according to the market analysis. For instance, in June 2017, IBM Corporation deployed blockchain tools in a consortium of seven organizations including HSBC, Deutsche Bank, Natixis, KBC, Societe Generale, Rabobank, and Unicredit.
The services segment is expected to grow at a substantial rate owing to rising demand of services among various industries including manufacturing, government, retail, and others. Blockchain service provides ample prospects for sharing information and helps to reduced threats and complications related to cross-organizational transactions. These features are estimated to boost the growth of the market and widen choice of offerings for the SMEs.
Rising Popularity of Blockchain-as-a-Service for Supply Chain Management and Relatec Applications to Drive the Market
Based on applications, the market is segmented into smart contracts, supply chain management, payments, governance risk and compliance management, and others (identity management). Among these segments, the supply chain management segment led the market share in 2018. Key players in the market are concentrating on developing blockchain services for supply chain management applications. Organizations in industries including manufacturing and retail are deploying blockchain services in their business units to leverage various features including supply chain processes with enhanced resource allocation, reduced costs, and maximized productivity.
Further, the payments segment is expected to grow at the highest CAGR during the forecast period. The growth in this segment is owing to the rising adoption of transparent transaction solutions in the BFSI industry.
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Increasing Adoption of Decentralized Applications based on BaaS to Boost Market Growth
Based on industry, the market is segmented into BFSI, government, energy & utilities, life sciences, manufacturing, healthcare, retail & consumer goods, telecom, media & entertainment, travel and transportation, and others (education, etc.,). The BFSI industry held the highest market share in 2019. The growth is mainly owing to the increasing adoption of decentralized applications based on blockchain services across numerous organizations. Decentralized applications provide various benefits including secure decentralization, cost-effectiveness, immutability, efficiency, and security. Banking and financial organizations are focused on initiating various projects based on blockchain services. For instance, in 2017, JPMorgan Chase & Co., the U.S. based investment bank and financial service provider, launched a blockchain-related project based on the Quorum platform, an open-source platform, built on the network.
The retail and consumer goods segment is predicted to grow at the highest CAGR during the forecast period, as per the market forecast. Key players in the retail and consumer goods industry are adopting blockchain services to reduce and eliminate threats and fraud and enhance transparency in payment operations. The manufacturing industry is expected to grow at a significant CAGR during the forecasted period. In the manufacturing industry, BaaS services help to ease production processes by collecting and maintaining past and present records, which further helps to boost production efficiency by ensuring proper employment of the workforce. Key players in the market including IBM Corporation, SAP SE, and others are developing BaaS services for manufacturing and supply chain companies. For instance, in 2019, SAP SE was focused on testing blockchain based on cloud services for the manufacturing and supply chain industry.
North America blockchain-as-a-service (BaaS) Market Size, 2019 (USD billion)
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The market segments in terms of regions include North America, Asia-Pacific, Europe, Middle East & Africa, and Latin America.
North America is expected to lead the market share during the forecasted period. The growth in this region is mainly owing to the rising number of blockchain projects. According to the China Academy of Information and Communications Technology (CAICT), during 2014-2017, in the US, there were around 2000 ongoing blockchain projects. Also, in the U.S., there are more than 500 companies currently operating in blockchain services. Further, governments of US and Canada are focused on investing to adopt blockchain services in their public utilities including airports, banks, defense & military, and others. The government of the U.S. invested around USD 2.51 billion for supporting various startups engaged in blockchain technology.
Asia-Pacific market is expected to grow at the highest CAGR during the forecasted period in this market. The growth in this region is owing to the presence of major key players such as Huawei Service (Hong Kong) Co., Limited, BitSE, and others. According to the China Academy of Information and Communications Technology (CAICT), there are around 298 active companies in China based on blockchain technology and services. Also, rising investment done by various major organizations and governments for the development of projects based on blockchain services is expected to drive the market growth in the near future. For instance, in May 2018, according to CAICT, , the government of China adopted blockchain technology owing to its numerous advantages. The government of China also invested around USD 600 million for various projects based on blockchain technology.
Europe held a significant position in the market in 2019 owing to the presence of major players operating in this market. Key players in the market are investing in the development of technologies related to blockchain. For instance, in January 2018, key players in the U.K. invested around USD 19 million for the development of advanced products and services based on nascent technology fields such as blockchain.
Furthermore, the Middle East & Africa and Latin America are estimated to develop at a considerable rate. This growth is owing to the rising government initiatives for investing in the development of blockchain services for oil and non-oil companies and advent technological advancements across these regions.
Emphasis of Key Players Towards Developing Innovative Blockchain-as-a-Service to Strengthen Competition
Microsoft Corporation develops and offers Microsoft office licenses and provides a wide range of products, software, services, and electronic devices. The company’s operating division includes productivity and business processes, along with intelligent cloud and more personal computing. Under its product segment, Microsoft Corporation offers Azure Blockchain Service. This blockchain service includes tools and services, helping users to build, expand, and manage consortium blockchain networks. The blockchain service offered by Microsoft is easy to deploy and operate. Banking and financial organizations are planning to complete a partnership with Microsoft Corporation to design and develop applications, payment systems, and others. The company is currently investing in the development of various blockchain services projects all across the globe. Microsoft Corporation is one of the key market players.
November 2017 – Microsoft Corporation and R3 partnered to further develop and accelerate the adoption of R3’s Corda platform among small and medium enterprises. R3’s Corda platform is based on Microsoft Azure.
This market outlook is progressing towards developing new prospects for various industries including BFSI, retail, manufacturing, and others. These advancements would assist organizations to adopt advanced blockchain-as-a-service based on technologies such as cloud, Artificial Intelligence (AI), and others. In blockchain-as-a-services, AI offers unique levels of features such as transparency and traceability of transactions, secure transactions based on DLT technology, and others. As a consequence, in the future, several SMEs are expected to adopt blockchain services based on AI to secure their payment platforms and eliminate the number of mediators. Also, growing internet penetration, adoption of cryptocurrency, and 5G are estimated to develop abundant opportunities for market growth during the forecast period.
The blockchain-as-a-service market report offers qualitative and quantitative insights on the blockchain service industry and detailed analysis of market size & growth rate for all possible segments in the market.
Along with this, the report provides an elaborative study of market dynamics, emerging trends, opportunities, and competitive landscape. Key insights offered in the report are the adoption trends of blockchain service, recent industry developments such as partnerships, mergers & acquisitions, consolidated SWOT analysis of key players, business strategies of leading market players, macro and micro-economic indicators, and key industry trends.
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2016 – 2027
2020 – 2027
2016 – 2018
Value (USD billion)
Fortune Business Insights says that the market value stood at USD 1.90 billion in 2019.
By 2027, the market size is expected to reach USD 24.94 billion.
The market is expected to grow at a CAGR of 39.5% in the forecast period (2020-2027).
North America is anticipated to grow with the highest CAGR and its value stood at USD 1.01 billion in 2019
Within industry, the BFSI segment is expected to lead the market during the forecast period.
Increasing demand for BaaS services based on DLT technology among various industries such as manufacturing and supply chain is one of the key drivers for market growth.
IBM Corporation, Microsoft Corporation, Oracle Corporation, and Alibaba GroupE are the top companies in the market.
The payments segment is expected to grow significantly at the highest CAGR owing to high efficiency and easy implementation.
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