By
Steve Muchoki
April 17th, 2024
JPMorgan is now the first distributed ledger platform available through the Azure Blockchain Service, a series of tools designed to seamlessly integrate with Microsoft’s cloud platform.
American multinational investment bank and financial services company, JPMorgan Chase & Co. is partnering with Microsoft to make blockchain tech “easier and cheaper” for companies.
Thanks to the new collaboration, the bank wants to simplify the way how blockchain-based apps are developed.
The companies said in a press release that, as a result, Quorum “will become the first distributed ledger platform available through the Azure Blockchain Service, enabling J.P. Morgan and Microsoft customers to build and scale blockchain networks in the cloud,”
A spokesperson for New York-based JPM explained that Microsoft will drive preference to the Quorum stack for Blockchain applications built on Azure and JPM will also build its own first-party applications for the service.
According to JPMorgan’s Head of Blockchain Initiatives, Umar Farooq, Microsoft’s cloud-service Azure will power the platform, named Quorum, which will allow enterprises to create and deploy new blockchain apps in “as little as a few weeks without needing as much expertise.”
“It was important to make sure that we could provide the sort of enterprise tools and services that [companies] need,” Farooq added. Earlier, Chief Information Officer (CIO) of JPMorgan, Lori Beer, expressed confidence that the blockchain would replace competing technologies for several years.
Mark Russinovich, the chief technology officer of Microsoft’s cloud-services division said that Quorum will be the first ledger available on the Azure blockchain platform. He added that the partnership will make it easier for JPMorgan customers, such as Starbucks and Louis Vuitton, to develop more applications for its blockchain network.
“JPMorgan’s Quorum is a “natural choice” for the Microsoft platform. It integrates with a rich set of open-source tools while also supporting confidential transactions — something our enterprise customers require.”
JPMorgan built Quorum about four years ago on the blockchain-based Ethereum network. The bank also uses Quorum for internal purposes, such as to experiment with how blockchain could be used for capital markets. It issued its digital coin, the JPM Coin, on Quorum.
Through the Microsoft Azure partnership, technology teams will get access to tools to write and test blockchain code. The code can be managed in the Azure cloud as developers log onto a website and send data from relevant databases to and from the Quorum network.
By easing the process for companies, the bank expects more use of blockchain. Without the Azure cloud, blockchain projects require a higher degree of involvement from IT teams and many blockchain experts.
Going forward, J.P. Morgan and Microsoft will continue to work together to address common enterprise, Independent Software Vendor, and developer needs for building and deploying blockchain applications on Quorum in the cloud. Microsoft will also provide engineering, consulting and go-to-market support for Quorum.
Matt Kerner, general manager for industries and blockchain at Microsoft Azure said:
“Companies using Quorum could build blockchain proof-of-concept applications in about six weeks as opposed to six months because of the cloud, and they can use their existing IT teams.
Many developers don’t yet know how to write code for blockchain. The cost to build a test blockchain application could fall to tens of thousands of dollars from hundreds of thousands.”
Will the Quorum Spin Off Into Its Own Funded Entity?
Public blockchains like ethereum, which anyone can access, were originally praised as ways to move value without middlemen like banks, which many of early users did not trust in the years after the financial collapse in 2007 and 2008.
Versions like Quorum have promised to streamline workflows in the middle and back office of enterprises by removing middlemen in those processes, as well as increase transparency of a number of supply chains, though the statement does not provide any examples of the societal good the partnership could help bring about.
Last week Microsoft reported strong third-quarter results as its commercial cloud revenue hit a $38.4 billion run rate joining an exclusive club whose only membership requirement is a market capitalization value of $1 trillion or more.
This move is raising the question of whether the bank will still spin Quorum off into its own self-funded entity. Rumors first emerged in March 2018 that JPM would let Quorum launch as an independent platform, largely due to its own success.
JPMorgan is “still exploring options” for a possible spinoff, sources familiar with the bank’s thinking said.