As 2017 comes to a close, so, too, does the early adoption phase of the blockchain revolution. With the new year looming just over the horizon, we begin an estimated six-year period of growth for distributed ledger technology (DLT). By 2025, industry analysts expect blockchain to be fully matured and a mainstream component of the capital market ecosystem. But first, we have some developing to do.
The question is no longer whether blockchain can be developed to be more than the backbone for cryptocurrencies, but how development will happen, and where. As industries as diverse as banking and food production seek to put assets and processes in the cloud and on a chain, many will turn to offshore outsourcing as a technology solution. While trends indicate that outsourcing is increasingly the solution of choice for software development, finding a suitable blockchain development company can be a challenge.
Unlike other types of software vendors, blockchain development services are only now beginning to dot the landscape. Finding the right company to develop your DLT product means looking at core competencies, contractual models offered, and services provided. In this post, we discuss these important factors to help you identify the company best suited for your blockchain project.
Blockchain Outsourcing vs. Software Outsourcing
In many respects, then, hiring a blockchain development company is much like hiring a development firm to create any software product — with a few important differences.
Understanding what these differences are will help you to identify a company that can deliver rather than one that can only disappoint.
Blockchain Development Technologies
The company you hire must demonstrate solid competency in most if not all of the aforementioned languages. Creating commercially-viable blockchains, smart contracts, or related products requires additional expertise in a few more-eccentric technologies. Without going into detail, here is a list of the technologies that are combined to create blockchain products:
- the Ethereum Virtual Machine (EVM)
- Ethereum Blockchain As a Service (EBaaS)
- software-as-a-service (SaaS)
- platform-as-a-service (Paas)
- distributed ledgers
- consensus methods
- decentralized technologies
- Internet of Things (IoT)
- P2P networks
- data security
- cyber security
- web technologies
Which of these must your software contractor know before building your DLT product? All of them, really, for a lack of expertise in any one of these is a gaping hole that will affect the functionality or security of your product.
Types of Blockchain Developers
Once you establish that your contractor has the minimum knowledge inhouse to develop a commercial DLT product, a second and equally important question arises: does the developer have experience creating the kind of blockchain product that you need developed?
Three Approaches to Blockchain Development
Generally, there are three reasons your (or any) company needs to develop DLT software:
- To create a blockchain for use internally within your organization
- To create a blockchain for hosting services you intend to market
- To create a distributed application (dapp) or smart contract to run on an existing blockchain
While the first and second reasons may seem similar enough, the development requirements — especially those for security — can be quite different. Creating daap or smart contract, likewise, requires different programming methods than either of the first two.
Picking the right software firm for your project means picking one that has experience in writing the kind of software you need. Some companies specialize in writing applications and point-of-sale interfaces for Bitcoin. Others only write smart contracts that will run on Ethereum. Still others develop for clients who need the greater flexibility offered by the Hyperledger Fabric blockchain.
Of course, you should have a clear understanding of which of these categories applies to your product before you search for a company to build it.
There are a number of outsource models used by outsource companies. These models affect how your project will be managed, and how it will be paid for.
Here are the four most-commonly-used models. As you will see, one or more may perfectly suite your marketing needs and budget, while others may be totally incompatible with your requirements. Understanding each model will help prevent misunderstandings and nasty surprises when you contract with a development company.
If budgetary limitations are more important to you than flexibility to make changes during project development, the fixed price model might be the best choice for you. With this model, you agree to a fixed price for development of your product before work begins. The advantage of controlling cost comes with a trade-off. Since the developer agrees to work for a certain price, you are limited in how many changes you can make once development has begun.
A modified version of the Fixed Price model, called the Agile Fixed Price model, allows for more flexibility during development.This is because the developer utilizes the Agile software development framework, which inherently allows for changes along the way.
With the Captive Unit model, the developer provides the facility, and hires and trains the R&D team that will work on your project. They also provide ongoing administrative, financial, legal, and personnel management of your team. You control and direct the team, and salaries are your responsibility. This model makes sense when you need to build a team to handle a complex project, and when you don’t want to go to the trouble of building or securing a facility in a remote location. Many companies choose this model when they need their product developed in a country where they have no corporate presence.
If your project will require ongoing work by developers, or if you will have a series of projects, this may be the model for you. Under the Dedicated Team model, the development company assembles a team that meets the unique qualifications of your project, and that team remains solely dedicated to working for you. The advantage of this model is that the team develops a growing knowledge of your products, and they operate as an extension of your inhouse IT or development group.
The Accelerated Build-Operate-Transfer model may sound strange, but the idea behind it is quite simple. Say you wish to form an R&D team in Western Europe. The only problem is, you are not in Western Europe; you are in the US, or Asia. Under this model, the development company identifies an existing R&D infrastructure that meets your needs and operates the team for a certain period of time. At some point in the future, ownership of the team and facility can be transferred to you and they become a subsidy of your organization. This model makes sense if your want to add blockchain to your verticals over a period of time, with the anticipation of making a heavy commitment at some later date.
How Ignite Can Help
2018 will mark the greatest growth year for blockchain technology seen so far. Industries from fintech to furniture manufacturing will turn to blockchains to store their data, run their processes, and to execute smart contracts for their customers. While opportunities for market share are great, not many companies have the diverse skill set inhouse to bring a DLT product to fruition. That’s where Ignite comes in.
We are blockchain experts in every sense of the word. Our world-class team of developers is composed of an array of diversely talented programmers. With six R&D labs situated across Western Europe, we can bring our wealth of knowledge and experience to bear on your blockchain project.
Whether you need one smart contract developed, or need a world-class team of your own to carve out your share of the market, we have pricing models to meet your project needs and budget.
Why not contact us today for a no-fee consultation?