Bengaluru: Wipro Ltd has set up a research facility to develop software applications using blockchain, the technology behind virtual currency Bitcoin.
India’s third largest software firm has partnered with a few start-ups to scale up the business and is in the midst of completing a few so-called pilot projects.
Wipro’s push into building applications using the blockchain technology makes it the third outsourcing firm, after Tata Consultancy Services Ltd (TCS), and Infosys Ltd, to embrace the database technology.
Disruptive technologies, such as blockchain, are upending the traditional outsourcing model of deploying an army of engineers in cheap locations. Leveraging blockchain technology will enable companies such as Wipro and its local rivals, Infosys and TCS, to help their clients cut costs and improve productivity.
Wipro is working on a few projects using blockchain technology for its banking clients. The technology can offer an alternative to the current global money-transfer network SWIFT, according to a senior company executive.
“Blockchain is a big focus area because of the potential the technology offers… For us, the focus areas are, SWIFT, asset management and identity management,” Wipro’s chief technology officer K.R. Sanjiv said in an interview on Monday. “We have built some prototypes, done demos, and we are in the process of implementing some internal use cases for our customers.”
Blockchain, in simple terms, is a universal ledger that maintains records and manages transactions through a reliable publicly accessible database. The technology eliminates the need of a central authority (like a bank) to authenticate a transaction. These transactions are secured by advanced cryptography. The consensus method of transaction approval also makes the system extremely difficult to hack.
Many have dubbed the blockchain technology to be the biggest innovation since the birth of the Internet. Billionaire Marc Andreessen termed it as “the big breakthrough”.
Andreessen’s venture-capital fund Andreessen Horowitz, is estimated to have invested more than $50 million in blockchain-focused start-ups.
Companies like TCS, Infosys and Wipro hope to help customers by offering solutions that can enable two entities in different countries to transfer money directly, eliminating the use of an intermediary bank. This can potentially save clients money, and will make the process simpler and faster.
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Though revenue from these technologies may not be big now, investment in these technologies is certainly theright approach, say experts.
“As soon as the client base of global banking platform vendors (mainly banks) consider Bitcoin and Blockchain as mainstream, it will be the time when banking platform vendors should incorporate bitcoin/blockchain capabilities into their solutions,” said Jost Hoppermann, vice-president, banking applications and architecture, at Forrester Research Inc. “Vendors with more advanced architectures will certainly find it easier to offer this kind of support.”
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Wipro has set up the blockchain research facility at its Bengaluru campus to help its engineers build applications.
“Now whether it (blockchain) plays out in one year, two years or five years is a different thing. That is crystal-gazing,” said Sanjiv, who reports into Rishad Premji, chief strategy officer and son of Wipro chairman Azim Premji.
For now, Wipro generates a tiny portion of its revenue from offering blockchain solutions but this could change, once more companies adopt this technology.
A World Economic Forum report released on 12 August made a bold prediction that 80% of world’s banks could start distributed ledger (shared digital data) projects by next year, thereby bringing blockchain technology at the heart of the global financial system.
Sanjiv declined to name the partners with whom the company is working on blockchain technologies.
“Our objective is to gain expertise in all technologies as all of them are emerging because none of them is a winner for now,” said Sanjiv.
TCS will launch a new offering as part of its core banking software, BaNCS later this year even as the company, like Infosys, have got teams to build applications on blockchain technology for clients in healthcare and banking industry.
In February, Nasdaq-listed Cognizant Technology Solutions Corp. announced that it had entered into a partnership to develop blockchain solutions for secure record-keeping of documents for Japan’s Mizuho Financial Group Inc.