Hackernoon logoCan Blockchain Fix Enterprise Cloud Computing? by@gedalexander

Can Blockchain Fix Enterprise Cloud Computing?

Ged Alexander Hacker Noon profile picture

@gedalexanderGed Alexander

Blockchain, cryptocurrency and DeFi writer exploring the innovations of tomorrow.

As cloud waste increases, businesses are looking for a silver lining.

Cloud computing services enable businesses and developers to organise resources and run workloads remotely over the internet.

Millions of people around the world rely upon cloud computing to deliver a seamless data sharing and storage solution. As Coronavirus forces many companies worldwide to take their operations remote, the worldwide cloud computing market continues to grow with a thirty-three percent increase this quarter to $36.5 billion.

What we know today as cloud computing can be traced back as far as the 1950s, when IBM’s clunky mainframe infrastructures would engulf a whole server room each. Fast forward to today and rapid advances in technology enables hundreds of servers, fractions of the size, to fill the same size rooms.


Colossal IBM mainframes took up a server room each in the 1950s

But increasing prices, monopolisation by hyperscale megavendors, and security risks, presented as a result of the centralisation of huge amounts of user data, remain to be issues for providers and consumers alike.

Blockchain technology, which has the power to offer solutions in areas ranging from supply chain transparency to transferral of property ownership, presents a logical next step in cloud computing. 

Below are several ways in which blockchain improves upon existing cloud computing models. 

Blockchain offers a way out of a monopolised market

As the need for cloud computing grows exponentially, so do the monopolies of cloud computing giants such as Amazon Web Services, Microsoft Azure and Google Cloud. The sector is dominated by a handful of providers, similar to that of mobile operating systems and search engines.

The world’s largest cloud computing firms have been quick to take advantage of the increased need for on-demand delivery and storage of IT resources, and have gained massive market share by doing so.

AWS alone owns thirty-two percent of the cloud computing market in 2020 and generated more revenue than it’s fellow three largest competitors combined.


Canalys highlighted the market share of the big 5 at the end of Q3

Megavendors are stifling the growth of smaller competitors; blockchain enables both enterprises and developers an alternative solution.

By using blockchain based models, enterprise level cloud computing solutions can compete on equal terms. On the consumer end, low-cost storage and computation is made available without having to trust a handful of central authorities and pay more in the process.

Blockchain offers a more cost-effective solution

With industry giants currently holding the keys to the kingdom, cloud computing has become cost ineffective for many businesses when used on a daily basis. 

Leading cloud computing providers such as Google require vast amounts of space and resources to run server farms on such an enormous scale, and this is unsurprisingly reflected in the cost for the end user.

This would be somewhat acceptable if the end user actually used all that they had paid for, but unfortunately this is not the case and more than a third of spending on cloud computing is wasted.

As data processing costs rise, blockchain can bypass the overheads that are associated with typical cloud storage. 

Blockchain based cloud providers do not have to charge end users higher prices as a result of running huge processing farms, and therefore can offer computing power at a fraction of the cost of centralised cloud providers.

This is one of several USP’s driving attention toward innovative companies such as Gather. By utilising blockchain technology, decentralised cloud providers can offer enterprise access to cheap and reliable processing power whilst keeping transfer speeds and the overall level of security high.

Gather has created a blockchain based model that benefits all parties involved; web users opt-in to websites to share their idle processing power, website owners earn from opted-in users and enterprises benefit from low-cost computational power.

Blockchain addresses important security issues

As well as reducing business costs, decentralised cloud computing eliminates data breach risks that currently exist within centralised cloud computing models. 

Results of a study carried out by global intelligence firm IDC highlighted that nearly 80% of companies surveyed had experienced at least one cloud data breach in the past 18 months. 

Single-point data storage poses a higher risk of a data breach. Distributed data storage solutions offered by blockchain technology breaks data files into fragments that are encrypted and then stored in multiple nodes, often across many different countries. This makes network security considerably stronger.

Blockchain can utilise otherwise wasted idle computing power

Some of the world’s largest technology companies today rely on networks of idle devices provided by volunteer users, utilising the combined processing power to complete resource-intensive computations.


IBM’s World Community Grid relies on computational power from idle devices provided by volunteer users

Several blockchain companies further improve upon this model by offering pioneering solutions that incentivise those with computational power to spare. 

Ankr looks to pay those who can spare storage and computing power and pair them with those in need, relying on the Sharing Economy economic model.

Edge Network aims to reduce the impact that existing server farms have on the environment by removing middleman services and offering a peer-to-peer exchange for computational power.

As we move into the end of 2020, distributed workforces are becoming the new normal. The global appetite for on-demand computing services is becoming ever more insatiable, and blockchain looks poised to feed the masses.


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