Four Ways MSPs Can Use Blockchain to Improve Managed Services

Managed Services Providers (MSPs) can benefit from blockchain to handle payments, manage contracts, store data and more.

Christopher Tozzi, Contributing Editor

September 19, 2017

2 Min Read
Four Ways MSPs Can Use Blockchain to Improve Managed Services

Blockchain is changing the world of money and beyond.

Although most managed service providers are not yet working with blockchain, it’s time for MSPs to start planning ways for blockchain to help their businesses.

A blockchain is a type of distributed database (sometimes called a distributed ledger) on which transactions are publicly recorded and stored in a redundant fashion across multiple nodes.

No single authority owns or manages the blockchain.

In addition, all information on the blockchain is transparent.

Blockchain has become most famous as the technology behind Bitcoin cryptocurrency, but blockchain has many other applications, too.

Below, I take a look at some examples of how MSPs can use blockchain to deliver better managed services.

Blockchain and MSPs

It’s a safe bet that few MSPs today are using blockchain technology for their businesses.

However, MSPs can benefit from it in several ways.

They include:

  • Accepting payment in blockchain-based cryptocurrency. This is the most obvious current use case of blockchain and MSPs. By accepting payment in cryptocurrency like Bitcoin or Ether, MSPs not only give their customers a new payment option, but can also help customers to protect their identities if they wish. That is because identities in blockchain transactions typically remain anonymous.

  • Storing customer data. A common objection to working with MSPs is that customers often have to entrust sensitive data to an MSP’s servers. The data can potentially be tampered with or stolen, and customers have no way of auditing the data unless they can access their MSP’s infrastructure — which they typically cannot. Blockchain can provide a solution to this conundrum by allowing MSPs to store customer data on a distributed ledger, where all transactions can be monitored. In this way, blockchain can create a new level of trust and confidence among customers when they consign their data to MSPs. This technique is already in use by Acronis, which uses blockchain as part of its backup and data protection services.

  • Managing contracts. MSPs can use blockchains to manage and enforce the contracts they sign with customers. This type of blockchain usage scenario, which is commonly called smart contracts, creates contracts that are self-enforcing and transparent. It minimizes the risks associated with signing contracts.

  • Sending notifications. When a service is disrupted or action is required by customers, MSPs typically notify customers by email or some other kind of traditional alert that goes through a central system. Blockchain offers a more efficient and reliable means of sending notifications. If MSPs store notifications on the blockchain, customers can retrieve notification information from anywhere, without having to rely on email servers or other single points of failure. IBM has described a scenario where blockchain is used to send notifications about a safety recall — a similar idea.

While few if any MSPs are currently using blockchain in the ways described above, use cases like these are likely to become more common as blockchain continues to evolve.

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About the Author(s)

Christopher Tozzi

Contributing Editor

Christopher Tozzi started covering the channel for The VAR Guy on a freelance basis in 2008, with an emphasis on open source, Linux, virtualization, SDN, containers, data storage and related topics. He also teaches history at a major university in Washington, D.C. He occasionally combines these interests by writing about the history of software. His book on this topic, “For Fun and Profit: A History of the Free and Open Source Software Revolution,” is forthcoming with MIT Press.

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