How Microsoft is positioning itself as a leader in enterprise blockchain adoption

Beyond Bitcoin, blockchain technology has many practical uses for business. Microsoft is advancing the concept of blockchain technology as a cloud service in Azure.

In these early stages of its practical development, the discussion of blockchain technology, and its potential for business enterprises, often revolves around cryptocurrency like Bitcoin and its derivatives. But limiting the discussion in that way is a mistake. The real potential for blockchain as a transformative, and potentially disruptive technology, lies within the more mundane and day-to-day realm of the basic business transaction.

By applying blockchain technology to business transactions, enterprises can establish more secure and more robust cybersecurity—theoretically. Blockchain technology, particularly when applied as a cybersecurity protocol, is still in a nascent state of development. Applying this technology in a practical way that all business enterprises can agree and count on is a challenge Microsoft is meeting head-on.

SEE: Blockchain: A cheat sheet (TechRepublic)

Blockchain cybersecurity

To move the discussion forward and overcome the challenge in front of it, Microsoft published a comprehensive whitepaper to address the practicalities of blockchain as a cybersecurity technology. The company published Advancing Blockchain Cybersecurity: Technical and Policy Considerations for the Financial Services Industry (PDF), to "deepen the cybersecurity policy dialogue among blockchain technology providers." The whitepaper concentrates on the financial services industry, but the principles can be applied to almost any business transaction.

Microsoft's whitepaper emphasizes the use of permissioned blockchain models and explains in detail what such a technology would require to be implemented with confidence in a regulatory environment. For the financial services industry, and any regulated industry, all security measures must be understood and agreed upon by both the enterprises making the transactions and the regulators charged with ensuring lawful compliance.

SEE: Quick glossary: Blockchain (Tech Pro Research)

Permissioned blockchain model

Cryptocurrencies like Bitcoin follow a public blockchain model, which means any person with the technological capability can access the transaction ledger, propose the addition of new blocks (Bitcoins), and validate transactions by following the established protocols. This public access is why mining for new coins has become such a big business for speculators.

The permissioned blockchain model, on the other hand, restricts access to the transaction ledger to just certain agreed upon parties. Ideally, the parties with access to the ledger will use their true identities and be vetted for trustworthiness. Permissioned blockchains may be developed by a single party or by a consortium of companies. According to Microsoft's whitepaper, permissioned blockchains rely upon a governance structure to control access, apply and enforce rules, and respond to incidents, including cyberthreats.

SEE: Why blockchain is essential to the future of banking and finance (TechRepublic)

Bottom line

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In many ways, blockchain technology is similar to cloud computing a decade ago. The technology is on the cusp of becoming standard operating procedure for many enterprises, with many practical applications we have yet to imagine, much less implement. Enterprises just need some time to work out the kinks and become comfortable with the technology.

Microsoft's whitepaper is a preliminary step in the enterprise adoption process. By showing enterprises, specifically those operating in regulated industries, how blockchain technology can improve the security of their business transactions while maintaining regulatory compliance, Microsoft is looking to advance blockchain technology as a potential business solution.

Of course, this is important to Microsoft because blockchain technology is, by its nature, best implemented via cloud computing services like Azure. Blockchain technology requires a reliable and secure infrastructure that can be trusted by all parties accessing the blockchain ledger. Through Azure and its intelligent cloud services, Microsoft is positioning itself to be at the forefront of the practical development of blockchain technology.

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About Mark Kaelin

Mark W. Kaelin has been writing and editing stories about the IT industry, gadgets, finance, accounting, and tech-life for more than 25 years. Most recently, he has been a regular contributor to,, and TechRepublic.

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