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SAP Unveils Blockchain Service in the Cloud

A new Blockchain-as-a-Service (BaaS) product has been launched by SAP at its annual Sapphire event in Orlando, U.S.

According to a statement released on Tuesday the "ready-to-use blockchain technology" will sit in the SAP Cloud. This means that any clients can access it remotely from anywhere, as you would with hotmail or similar cloud computing based services that are not reliant upon expensive to install 'on premise' technology or software owned by the end user. A fee is paid to access the cloud-based service run by a third party such as SAP.

The offering is part of the new SAP Leonardo product line, also launched at this year's Sapphire end user conference. The blockchain element is based on the Hyperledger open source blockchain platform, using its standards and protocols. SAP joined Hyperledger as a premier member early in 2017.


The vendor describes SAP Leonardo as a "comprehensive digital innovation system" because it includes the blockchain cloud service element alongside other emerging technologies such as machine learning, the internet of things (IoT) and so on – all of which are integrated into the "one ecosystem".

This makes sense as to get the network benefit of automatically ordering new parts or consumables in a business supply chain a net-connected IoT system would, for example, need to use artificial intelligence (AI) inspired machine learning to automate procedures and the blockchain could be used to enact smart contract orders and/or pay for goods. The interconnectivity of the technologies aids their effectiveness if the people, process and technology are correctly aligned.

What is the blockchain?

The blockchain is sometimes referred to as distributed ledger technology (DLT) to differentiate it from the original Bitcoin crypto-currency 'chain'. In its simplest form it is a reliable record of who owns what, and who transacts what. It is effectively a digital modern version of a traditional ledger run by a bank or accountancy.

Potential applications are in payments, supply chain deliveries, trade reconciliations on the financial markets and so forth where its ledger recording capabilities could be faster and cheaper operationally-speaking than existing legacy IT systems.

Data regarding transactions, files, or information is shared across a peer-to-peer network. Every participant can see the data and verify or reject it using consensus algorithms. Approved data is entered into the ledger as a collection of 'blocks', stored in a chronological 'chain', which is secured through cryptography. Blockchains can include land titles, loans, trades, intellectual property, identities, votes – almost anything of value – and end uses for this experimental technology are not restricted to the banking industry alone. It could, for instance, for used to verify diamonds and prevent the trade in so-called blood diamonds.

SAP is only one of many existing technology vendors looking to use the system. Banks themselves are exploring how to use the blockchain via the R3 consortium, their own IT initiatives, or by partnering with specialist vendors such as Ripple which uses the Interledger protocol and aims to displace the global correspondent banking payment and securities messaging network operated by SWIFT.

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