Ottawa software firm Leonovus (TSX-V:LTV) is hoping to democratize cloud storage services with a new blockchain-based platform that could challenge Amazon and Microsoft as the dominant names in the business.
Galaxa, as the marketplace will be known, looks to be the go-to destination for enterprises such as banks or government agencies looking to securely store data across multiple vendors. The platform is meant to disrupt the current cloud storage dominance of Amazon Web Service and Microsoft Azure, which currently combine for nearly half of global cloud infrastructure, according to market analyst firm Canalys. Most companies looking to leverage software-as-a-service applications turn to one of these two giants, with Google gaining traction and traditional telecoms such as Rogers and Bell among the remaining players in the market.
Galaxa would create a single hub where enterprises could buy cloud storage space from multiple vendors, further distributing a single company’s stored data and filling the unused server space of the smaller players in the cloud market.
Leonovus CEO Michael Gaffney told Techopia Tuesday that the Galaxa marketplace would allow enterprises in need of secure and distributed storage solutions to break free of Amazon and Microsoft’s “oligopoly.”
Disrupting the cloud market
Here’s how it would work: Vendors of all sizes with cloud storage capacity could post their profiles on the platform with pricing and relevant information such as where data servers are located.
Interested enterprises could go to the marketplace and establish a “smart contract” – a blockchain-secured agreement that’s automatically fulfilled when certain conditions are met – with their cloud storage needs.
There are numerous security benefits to this approach, Gaffney says. For instance, the customer that needs its data to stay in Canada but spread across a minimum number of data centres can specify those requirements and tap Amazon, Rogers and an independent supplier to collectively fulfill its order.
That data is now not only spread and encrypted across multiple data centres, but also multiple vendors, further protecting it from a singular privacy breach.
Galaxa will be built on Leonovus’s core software storage solution, which “shreds” a customer’s data before encrypting it and spreading it across multiple locations. While the foundational technology is similar, the scope of Galaxa is greater than anything Leonovus has tackled before.
“This is far bigger than Leonovus,” Gaffney says.
Initial coin offering will fund development
In order to build something of this magnitude, Leonovus is holding an initial coin offering. You can think of an ICO as similar to an initial public offering, but the result is a distinct cryptocurrency token. While Gaffney says he can’t confirm the expected value of the ICO at this point in the process, he gave a one-word hint: “Big.”
The token itself will be key to how Galaxa works. If an enterprise customer wanted to contract multiple vendors for its storage services, it would ordinarily need to set up vendor relationships with each one, which can be complicated, expensive and time-consuming.
With Galaxa’s token, customers will buy the cryptocurrency on the associated exchange and use it to place an order, at which point the selected vendors will receive the digital currency and convert it back into their fiat denomination of choice.
“The only way to do this efficiently is with a token,” says Gaffney.
Once the marketplace is ready to go, the biggest hurdle will be getting customers and vendors – potentially even Amazon and Microsoft themselves – to use it. Gaffney says a significant portion of the raised funds will go towards marketing the new platform.
Since Leonovus is publicly traded on the TSX Venture Exchange, it can’t go about an ICO without registering the token as a security. It’s been in discussions with the Ontario Securities Commission and TSX-V since February about publicly listing the Galaxa token – a first in the history of the exchange.
If all goes according to plan, Leonovus expects the ICO to close by the end of the year.