February 3, 2016
Recently, the LTP team performed an extensive research on banks’ activities around blockchain. However, banks are not the only ones in the race for the technology’s adoption. Tech giants like Microsoft and IBM are also catching the blockchain fever that seems to have spread around the world at an impressive pace.
IBM, for example, had recently joined a group of banking industry giants like JP Morgan, Citi, BNP Paribas and other in the $60-million investment round of Digital Asset Holdings, a developer of distributed ledger technology for the financial services industry.
As for Microsoft, there are several interesting blockchain-related initiatives the tech mammoth is involved in. Microsoft recently presented the public cloud platform offering Ethereum Blockchain as a Service (BaaS) through Microsoft Azure.
As the company explained, the Ethereum Blockchain-as-a-Service provided by Microsoft Azure and ConsenSys allows financial services customers and partners to play, learn and fail fast at a low-cost in a ready-made dev/test/production environment. It will allow them to create private, public and consortium-based blockchain environments using industry-leading frameworks very quickly, distributing their blockchain products with Azure’s worldwide distributed (private) platform.
One would be surprised how active Microsoft is with blockchain and with partnerships. According to the official website, there are six FinTech companies in partnership with Microsoft to work on blockchain technology.
Just couple days ago, the list was updated as Microsoft shared the information of the role each company plays in these multiway partnerships.
As Marley Gray, Director, Technology Strategy US Financial Services at Microsoft Azure, shared, Blockchain and the whole ecosystem is a fast-moving space. We look to make Microsoft Azure the absolute best place to develop, test and deploy distributed ledger applications in cloud, hybrid and local environments.
Here are the blockchain startups Microsoft revealed partnerships with with comments on the role of each company:
MultiChain: Rapidly design, deploy and operate distributed ledgers.
Netki: Designs enterprise-grade solutions promoting scalability, security and ease of use for blockchain-based products. The Netki Wallet Name Service is an open standard that makes it easy to send digital currency between users or services, interconnecting the entire ecosystem. WNS is designed to allow service providers to easily register wallet names on their client’s behalf, such as username.company.com, or for end-users to register their own vanity names such as personalname.me linking them directly to a wallet address.
Emercoin: A leading digital currency and blockchain platform focusing on innovative, scalable enterprise services. The Emercoin blockchain will offer Azure clients solutions for network security, e-commerce, advertising, business contacts, ownership and identity management.
Eris: Eris is a universal blockchain platform capable of running any client for a public blockchain and any client for a permissioned blockchain which is open-sourced. The Eris platform greatly reduces the complexity of creating blockchain-based applications and integrates multiple blockchains, distributed file storage, and other distributed systems into a cohesive application. Eris also makes it simple and easy for your organization to get started using permissible, smart contract-capable blockchains.
CoinPrism: Now deploys the version 0.5 of OpenChain which we released early January, and supports high availability, disaster recovery and business continuity through a new Microsoft SQL Server storage back-end.
BitPay: Bitcore, a complete set of bitcoin utilities for CentOS, Red Hat Enterprise Linux and Fedora Linux. Also, a full bitcoin node that’s 100% compatible with the bitcoin core code base and comprehensive Node.js language libraries for extension of the core bitcoin functionality.
Impressive, isn’t it? Given that Microsoft is not among the companies loudly sharing its initiatives in FinTech, wouldn’t be a surprise to explore other activities of the tech giant in the segment.
Another notable initiative Microsoft plays a vital role in is the well-known R3CEV consortium which connects 42 financial companies that focus on blockchain usage. Earlier this month, R3 announced its first distributed ledger experiment, involving 11 of its member banks, using Ethereum and Microsoft Azure’s blockchain as a Service. The 11 member banks and R3 are connected on a private peer-to-peer distributed ledger, underpinned by Ethereum technology, and hosted on a virtual private network in Microsoft Azure.
As a tech company, Microsoft at this point is most likely looking to embrace its Azure platform. However, it may be a matter of time when partnerships with FinTech startups working on blockchain and participation in R3CEV consortium along with global banks will lead the tech company towards in-house exploration of opportunities in the financial services industry.
As Grey shared with the MIT Technology Review, We see a huge opportunity here. Enterprise-scale and enterprise-grade infrastructure is going to be vitally important for this financial infrastructure that will be woven using blockchain over these next few years.
When it just seemed to be enough, there is more to Microsoft’s activities around blockchain. Earlier in January, Microsoft presented its New Dev/Test labs integration to Azure platform. As Grey commented on the upgrade, Blockchain technologies will become even easier to build and test using Azure's DevTest Labs currently in preview. All blockchain-related services and partners can now be setup in a lab environment and added as artifacts to the lab as you create it. This exciting development allows for partners and customers to decouple the blockchain technology from the VM itself and apply these technologies more discretely.
The list of Microsoft activities around blockchain is certainly not exhaustive. The company has talents and resources to actively explore the opportunities in the segment and who knows, we may soon hear that the tech company is entering the financial market. Meanwhile, the Azure BaaS platform is a major innovation engine promising an outstanding gain for the company and the industry, both financial and experiential.