Global IT and software development company, Globant, has acquired Blockchain experts, Atix Labs, founded in 2013, in a move that will strengthen Globant’s position in the trailblazing blockchain solutions market, expected to grow 10x by 2025.
Globant intends to leverage the unique real-world benefits that Blockchain can deliver to decentralised business processes, and use Atix Labs’ knowledge to build on its five-year-old Blockchain Studio.
Nearshore Americas caught up with Diego Tartara, Chief Technology Officer at Globant, to hear more about the logic behind the acquisition, and what the move could mean for the global services industry.
Demand for Blockchain Rises
The digitally-native Argentinian company has made its name by engaging with emerging technologies and providing solutions-focused services that help clients leverage those technologies across their business. But, according to Tartara, until recently Blockchain use had been limited.
“When we created the Blockchain Studio there was a lot of hype around the technology and banks were creating their own divisions to increase their knowledge. But there were only a few cases where actual business implementations were happening,” he explained.
“This was because moving into a production state meant facing big issues like cost of infrastructure, cost of transactions, and public versus private spheres.”
Now, however, partially driven by the global move to digital in the wake of the pandemic, Blockchain, alongside similar disruptive technologies, are commanding much greater interest.
“Technology evolves and new technologies offered new compelling solutions to certain problems Blockchain had faced,” said Tartara. “Cost and computational power concerns were addressed and major disruptions like smart contracts came about. The hype then gained demand, which translated into demand for services. This is why we are reacting in this inorganic way.”
“We have a wish list or prioritisation list when it comes to acquisitions and blockchain is gaining momentum on it,” he added.
What Exactly is Blockchain?
For most people, Blockchain is most closely associated with the financial world and the disruptive cryptocurrency market. Bitcoin and Ethereum, two of the world’s major cryptocurrencies, are based on the technology.
Blockchain is a form of Distributed Ledger Technology (DLT), which offers unique properties that mean it is practically impossible to hack or change.
Blockchain also allows a solution to rapidly size and scale, and many solutions can be adapted to perform multiple tasks across industries
IBM notes that: “With distributed ledger technology, permissioned participants can access the same information at the same time to improve efficiency, build trust and remove friction. Blockchain also allows a solution to rapidly size and scale, and many solutions can be adapted to perform multiple tasks across industries.”
This is because the Blockchain is a novel form of a database and is not managed or owned by one single person or entity. Unlike traditional databases such as SQL, often administered by and located on one company’s network, a Blockchain is distributed across all networks included in the chain. Whenever a change is made to the blockchain, that change is noted on every participant’s network, ensuring that each participant has full, up-to-date records of any transaction that is made.
Hacking or cheating the system is incredibly difficult due to its distributed nature: those wanting to cheat fellow participants would have to gain access to each network in the blockchain and alter records individually. Because of this, the blockchain grows stronger with every alteration made and with each new participant that is added. As such, cryptocurrencies gain security as more people buy.
In the business and Nearshore worlds, immediate uses of Blockchain technologies are smart contracts and service-level agreements. Multi-vendor outsourcing, whereby numerous suppliers are working towards a shared goal, is another area of real opportunity.
“There’s a lot of potential in identifying solutions that can be replicated across industries and could be related to non-fungible tokens (NFTs) or ticketing. There are a lot of ways that a distributive solution based on Blockchain can solve in dynamic exchange. It would be good to package that and offer it as a solution,” said Tartara.
Tartara identified the synergies between Globant and Atix Labs as a factor behind the acquisition, which will see Atix Labs move into the company and effectively spearhead its Blockchain development.
“Atix Labs already has a good portfolio and the company remains true to the service company model. This is key because it means its implementations are not tied to one specific Blockchain or one type of solution but can touch multiple technologies. This is important for Globant because we also do not have an attachment to one specific type of technology – we are always looking for the best solution,” Tartara explained.
“We continue to scout companies that together with Globant can grow bring the type of growth and quality that Globant wants to have within the industry” — Diego Tartara
The way Atix Labs creates capacity and generates suitable talent for scaling purposes also reflects Globant’s approach.
“Atix has good relationships with universities. The company hires talent directly and then trains it, just as Globant does. Because of our size, we cannot only hire laterally. If you combine Atix Labs’ knowledge with Globant’s muscle, then it makes a great combination.
Globant’s Blockchain Future
Tartarta is keen to point out that Atix Labs will not be Globant’s only foray into Blockchain territory.
“This was a great step, but it certainly won’t be the last one,” he said. “We continue to scout companies that together with Globant can bring the type of growth and quality that Globant wants to have within the industry.”