Hewlett Packard Enters Blockchain-Based Cloud Services: What Does It Mean?

Hewlett Packard Enterprise  and Global Blockchain Technologies Corporation think that blockchain technology could disrupt the $300 billion cloud computing market.

But how innovative is the blockchain-based cloud computing solution they now propose? And how much potential does it actually have to disrupt existing cloud behemoths? Those are important questions to answer for understanding the state of blockchain in the cloud.

HPE’s Blockchain Cloud Computing Play

HPE and the Global Blockchain Technology Corporation made headlines in early June when they announced a partnership to deploy a decentralized marketplace for cloud computing. The platform is designed to allow enterprises to sell unused IT resources via a peer-to-peer network.

The announcement offered few technical details about how the platform will work. We do know that it will be based on the Laser Network, a blockchain that was forked from Ethereum earlier this year.

We don’t know, however, exactly which types of cloud-based resources will be made available via Laser, how they will be distributed or how much they will cost. HPE and Global Blockchain have mentioned sharing cloud-based storage resources using the decentralized marketplace; it’s unclear whether other types of resources might be available, too, such as computing capacity.

Other Blockchain-Based Cloud Networks

The extent to which HPE and Global Blockchain branch out beyond cloud-based storage sharing will be significant, because offering cloud-based storage over a decentralized, blockchain-based network is not a new idea. A variety of other vendors are already active in this market, such as Storj , MaidSafeand Filecoin .

Those startups are focusing primarily on the consumer market, rather than enterprises. In that respect, the partnership between Global Blockchain and HPE is significant, as the latter is apparently designed for enterprises.

That said, attempting to break into the enterprise market could potentially create steep new challenges for HPE and Global Blockchain. Convincing individuals who have extra hard drive space on their personal computers to rent it out over a peer-to-peer network, or to access such a network in order to gain more personal storage space, is one thing. Designing a similar solution that integrates with enterprise IT infrastructures and effectively addresses the unique security and compliance risks that they face is another, more challenging task.

Beyond Cloud Storage

Should HPE and Global Blockchain decide to extend their focus beyond blockchain-based cloud storage, however, they would likely be in a much better position for a successful market play. Selling computing capacity – in other words, access to central processing units (CPUs) that can crunch numbers – via a blockchain-based network would likely pose fewer security and compliance risks because it would involve less data.

Such an offering would also have a stronger market advantage because fewer existing vendors are operating in this niche. Existing projects include Golem , which caters to software developers in need of large-scale computing power when they write applications. And in a sense, any blockchain that supports the execution of distributed applications, like Ethereum, can provide access to shared computing resources, although you’d need to build an application and interface for managing them in a user-friendly way.

Still, the market for decentralized, blockchain-based computing resources is currently much less developed than that for decentralized storage. And it’s a market that is a more obvious candidate for enterprises, whose need for highly scalable computing infrastructure is significant.

Time will tell what becomes of the partnership between Global Blockchain and HPE. For now, they say that their goal is to develop a proof-of-concept platform, which will be tested on existing users of HPE’s enterprise cloud computing platform. (It’s unclear which users will test the new solution, and whether they will do so voluntarily.)

But it will be some time before it is clear whether the new platform will work as intended and even longer before we know how innovative its decentralized resource-sharing features are.

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

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