Taking its software as a service (SaaS) model ahead, information technology services bellwether Tata Consultancy Services (TCS) has launched the IT as a service (ITaaS) framework
IT major tweaks software rental model to deploy IT hardwareBANGALORE: Taking its software as a service (SaaS) model ahead, information technology services bellwether Tata Consultancy Services (TCS) has launched the IT as a service (ITaaS) framework to corner a larger share in the domestic small and medium enterprises (SMBs) market.
The new model of hardware deployment tweaks the SaaS model, wherein a software application is hosted as a service and provided to customers over the internet on a pay-per-use basis. TCS is tying up with hardware vendors such as Intel to offer software services as well as hardware on a pay-per-use model.
Venguswamy Ramaswamy, global head (small and medium business), TCS, told DNA Money that the ITaaS framework is a one-stop shop for total end-to-end IT and hardware solutions. “This includes hardware and network with remote administration, intranets and portals, emails, document management and business application,” he added.
SMBs stand to gain from economies of scale as the services are shared by other companies of similar size and they are charged just for the hardware used. IT and networking issues are managed offsite by TCS and the hardware is installed by the company’s hardware partner. Avinash Vashishta, the chief executive officer of investment advisory research firm Tholons, said several other IT companies that his firm is consulting for are shifting to this model of IT deployment. “The model is unique to TCS now. However, most IT companies I have held discussions with agree that this is the model of the future for the SMB segment,” he said.
V Balakrishnan, the CFO of Infosys, agrees. “We have not yet adopted the ITaaS model. But the model is evolving and we are definitely considering it,” he said.
A recent study by Zinnov Management Consulting found that Indian SMBs spent $6.6 billion on IT in 2007-08. This constitutes 30% of the total IT spend in India. TCS launched its SMB unit in March this year to address this market, which is growing at 25%. According to Nasscom, the size of the Indian SMB space today is 35 million units.
“The SMB segment offers us a huge business opportunity because of its enormous growth,” said Ramaswamy. Som Mittal, the president of Nasscom, said that any pay-per-use model is good news for SMBs. “It is not always easy for smaller companies to purchase expensive technology. As the model charges them according to the usage, it helps their margins,” he said.
For now, TCS will focus on India for this offering. “Other markets can wait,” he said. TCS plans to cover at least 400 SMBs by March next year.
n_pranav@dnaindia.net 
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