TCS bets big on 'SME Cloud'

Tata Consultancy Services (TCS), the country's largest information technology (IT) services provider, has planned to launch what it terms 'SME Cloud' in a fortnight. Under which, it would provide hosted services for enterprises having a Rs 50-500 crore turnover.

"We will be the first Indian IT company to do so," managing director and CEO N Chandrasekaran said in an interview in Davos where he had gone last week to attend the World Economic Forum meeting.

Cloud computing uses Internet technology to move computers and information away from desktops and into remote data centres. Experimental projects involving 100 small and medium enterprises (SMEs) have been on for the past 18 months and encouraged by the success, the company is ready to roll out the 'SME Cloud' under a separate division. Several hundred people from TCS will be part of it, Chandrasekaran said, without giving a revenue target.

Though he did not want to reveal any names of clients, sources familiar with the developments said all 100 SMEs have already signed on, including names such as Oxford Book Store, Kaya Skin Clinic and Ryan International School.

Ging by the initial response to the upcoming service, Chandrasekaran said he was reasonably confident that Indian SMEs would be strong adopters of cloud computing. TCS' aim is to give more reliable services than what SMEs could manage on their own. Besides, the employees could spend their time better by building value, instead of worrying about choosing, buying, configuring, and babying technology.

By adopting cloud computing, the IT investment cost will be low because there is no need to invest in a server, and enterprise resource planning (ERP) solutions or applications can all be hosted on the cloud. "There will be no opex (operating expenditure) or capex (capital expenditure) if SMEs opt for our new service," Chandrasekaran said.

Interaction with SMEs revealed, he said, that they were seeing the cloud as a viable means and believe data security would be better there. Admitting that convincing companies to make the transition from their own IT infrastructure to a hosted one is a challenge, Chandrasekaran said a "few success stories will make all the difference".

On the WEF conference, Chandrasekaran said he met at least 25-30 of his top clients and the feedback was much more positive than he had thought. "2011 will be a much better year than 2010 for the whole industry. India still remains very attractive. Everyone I talk to wants to know more about India," he said.

Admitting that Europe's debt crisis and rising inflation at home could be a long-term dampener, he said there would be no immediate impact on TCS' business.

He did not anticipate any sudden drop in spending by European companies as while deciding on their IT budgets and spending patterns, they'd already taken into account many issues, unlike last time. "Even if there are some shocks around the globe, companies will have some cushion because they have factored all that into account," Chandrasekaran said.

"If I know that it's snowing heavily in Zurich, I will get into the car from Davos an hour early. So, I have already taken that delay into account and have no uncertainty in my mind, unless there is a sudden landslide," he said.

TCS is planning to hire as many or slightly less than the 50,000-plus it hired last year.