TCS in preparation to grab cloud opportunities
By siliconindia   |   Thursday, 10 June 2010, 15:09 IST   |    5 Comments
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TCS in preparation to grab cloud opportunities
Bangalore: For India's biggest software exporter Tata Consultancy that competes with IBM, Infosys and Wipro in domestic market, now cloud computing offers big opportunities. According to a report by Pankaj Mishra of Economic Times, TCS is set to account for nearly 10 percent of its new business together with product revenues over the next few years. "In two-three quarters, we will hopefully put out our cloud revenues separately," said N Chandrasekaran, Chief Executive Officer of TCS. As part of its strategy to arrest linear, employee-led growth that requires hiring additional staff for handling new business, TCS plans to offer standardised solutions across the areas of insurance and banking to multiple customers using same resources. Cloud computing allows customers to avoid upfront software licensing and IT infrastructure investments by paying vendors such as TCS on pay-as-you-go model, and access services related to HR, finance and procurement. TCS has already realized the traction for its 'bank-in-a-box' solution among smaller cooperative and rural banks. The solution, which helps these banks automate and integrate their processes of deposits and loans for a fixed monthly rental fee for each branch, already serves nearly 2,000 bank branches. Cooperative banks, including Andhra Grameen Vikas Bank, Uttaranchal Grameen Bank and Purvanchal Grameen Bank, are using TCS' 'bank-in-a-box' solution. Already, smaller organisations, such as Kaya Skincare, Oxford Book Store and Ryan International School, are paying TCS on per transaction basis as they seek to lower their costs of operation further. Research firms, including Forrester, say the new model helps customers squeeze costs by up to 30 percent. According to Forrester, including a standard software foundation, will cut costs for clients by an additional 20-30 percent on top of the 15-20 percent savings of a traditional BPO solution. "It's an opportunity for us to link revenues with outcome, something even customers are more comfortable with," said Chandrasekaran. Apart from India, TCS has started seeing traction for its platform and cloud-based solutions in markets, such as the UK. According to UK-headquartered research firm Ovum, Pearl Group on TCS's BaNCS financial services software, media business Emap on its finance and accounting platform, Deutsche Bank on TCS investment reconciliation utility Aspire and IATA using a proprietary data extraction hosted solution are among top customers for the company in the UK. While both banking and insurance solutions in the cloud are TCS' own IP (intellectual property), the HR outsourcing platform is based on enterprise software vendor SAP's solution. TCS has also seen success with its solution developed for small and medium businesses (SMB) in India with around 56 customers so far. "We want to have around thousand customers before taking this solution outside the country," said Chandra. "It's a very significant opportunity because it's 100 percent annuity-based business," he added. Unlike, short term application development projects that expire after a few months, services based on cloud computing model require customers to pay subscription fee, year after year, ensuring a more predictable revenue stream for vendors such as TCS. Meanwhile, experts such as Samad Masood, an analyst with Ovum, say TCS will face challenges in taking its cloud offerings to other European markets. "TCS should be proud of what it has achieved in the UK BPO market. Against its many doubters, it has managed to develop and begin the rollout of its BaNCS-based life & pensions (L&P) platform after three years of development," Masood said in a recent note. "TCS is doing the right thing by investing ahead of the curve in platform BPO, but it's going to be a long slog before these investments brings significant returns globally," he added.

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