Microsoft Working Towards Wider Adoption Of Blockchain

Blockchain is gaining momentum as an indispensable part of the future of all enterprises, businesses and governments. Blockchain, or the distributed ledger technology, possesses the power to trim enormous costs and efforts involved in carrying out intracompany and intercompany businesses operations across sectors.

Microsoft Corporation (MSFT) is not just working on projects to enable faster, more useful and successful adoption of the technology, it also creating a niche for itself well in time to gain from the blockchain revolution that is underway.

Project Bletchley

On June 15, Microsoft announced a new venture which outlines Microsoft’s vision for “an open, modular blockchain fabric” which will be powered by Azure – its Cloud Computing platform. The initiative is being called Project Bletchley and is “Microsoft’s architectural approach to building an Enterprise Consortium Blockchain Ecosystem.” This project follows Microsoft’s first move towards the blockchain technology, the launch of Azure Blockchain as a Service (BaaS) in November 2015.

Since then, Microsoft has been working closely with its partners and enterprises to understand the needs and concerns of the industry while developing the requisite technology and ecosystem to enable wider adoption of the distributed ledger technology.

Bletchley is trying to address some of the common themes that partners and other early adopters of the technology across various industries have pushed for, like:

  • Platform openness is a requirement.
  • Features like identity, key management, privacy, security, operations management and interoperability need to be integrated.
  • Performance, scale, support and stability are crucial.
  • Consortium blockchains, which are members-only, permissioned networks for consortium members to execute contracts, are ideal.

The project is powered by Azure, which will support simple to sophisticated blockchain protocols as they are developed. Bletchley will introduce a modular framework which would allow users to apply choose the best combination of technologies based on their needs.

For example, the distributed ledger designed to cater to a derivative contract will be different from one that is built for cross-border payments. The difference would arise on the privacy, security, regulatory and functional requirements which would require separate distributed ledgers.

Bletchley introduces two new concepts: Blockchain Middleware and Cryptlets. Blockchain middleware would provide the core services like identity and certification, encryption, data (advanced analytics, machine learning), management and operations and more.

Cryptlets is like a new building block of blockchain technology that would come into picture as critical components of sophisticated blockchain systems, supplying additional information (such as date and time) while enabling secure and scalable functioning of all technology.

Blockchain & Cloud

Microsoft isn’t the only player in this field. IBM (IBM), Microsoft’s rival on many fronts, is competing here too. In April 2016, IBM launched its blockchain services on IBM Cloud. With its launch, IBM is helping to speed the adoption of blockchain for businesses while providing a framework for securely operating blockchain networks on the cloud which are designed to meet the security and regulatory requirements.

"Clients tell us that one of the inhibitors of the adoption of blockchain is the concern about security," said Jerry Cuomo, vice president, Blockchain, IBM. "While there is a sense of urgency to pioneer blockchain for business, most organizations need help to define the ideal cloud environment that enables blockchain networks to run securely in the cloud."

Likewise, “Azure’s availability in 24 regions across the globe, hybrid cloud capabilities, extensive compliance certification portfolio, and enterprise-grade security enable blockchain adoption, especially in highly regulated industries like financial services, healthcare and government,” according to Microsoft.

Final Word

With the launch of Project Bletchley, Microsoft is creating a space that is open and flexible, modular in design, and enables its partners and customers to work on the specific needs across different sectors and industries. While creating such an open ecosystem will take time, Microsoft’s initiatives will surely speed up the process towards adoption of blockchain while simultaneously creating a sweet combination of distributed ledgers and the cloud.

More information on the project will be revealed at Microsoft's World Wide Partner Conference to be held in July in Toronto.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Prableen Bajpai

Prableen Bajpai is the founder of FinFix Research and Analytics which is an all women financial research and wealth management firm. She holds a bachelor (honours) and master’s degree in economics with a major in econometrics and macroeconomics. Prableen is a Chartered Financial Analyst (CFA, ICFAI) and a CFP®.

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