Tech titans seem to be back on the drawing board to rework their spheres and boundaries. Late last week, Microsoft Corp and Hewlett-Packard announced a three-year pact and $250 million investment to build solutions around cloud computing and next-generation infrastructure to application models. With this announcement, the two global majors have turned on the heat in space that was already witnessing an uptick in demand with more and more clients demanding better cost efficiency and reduced complexity.

The changing landscape of the tech world has seen Indian offshoring majors step up investments in new age technologies and engagement models like cloud computing. Most of them are working on upgrading their skill sets in these new areas. While only a handful have dedicated investments, most of them are working hard on developing such solutions. Among the top four Indian software firms, Wipro has led the path after declaring its intentions to invest 1% of its annual revenues (around Rs 190 crore) to develop solutions and platforms around new age technologies like cloud computing and software as a service (SaaS) among others. Wipro plans to divide the funds equally between technology led solutions and industry led solutions.

While SaaS and cloud computing are on top of the priority list, technology for green and information management also feature in the list of technology-led solutions along with platform based BPO and solutions for internet banking. ?We are aware that these investments will not reap benefits immediately. But, we are investing for revenues which will come day after tomorrow,? says Girish Paranjpe, executive-director and joint CEO, Wipro IT business. While its peers including the largest and the second largest Indian IT player?TCS and Infosys are building and offerings their own set of capabilities, they are yet to announce clear investments.

Competition in the space is touching a new high, as Indian IT players will have to build a robust set of offerings, dedicating more efforts and resources to this space in order to compete with the global giants. ?These are early days and it is not quite clear how big is the opportunity in these models. Everyone is making investments, even though the quantum is not known. So, it will be difficult to say whether these are adequate or not,? says Diptarup Chakraborti, principal research analyst with Gartner.

Needless to note, the HP-Microsoft deal is the way to go. Looking at the modalities of the deal, the duo will build on the exiting Windows Azure platform with HP bringing its prowess of service offering like the data centre management software to the table. Commenting on the deal, Microsoft CEO, Steve Ballmer said that the agreement, which spans hardware, software and services, will enable business customers (including large, medium and small) to optimise performance with push-button simplicity at the lowest-possible total cost of ownership.

?Microsoft and HP are betting on each other so our customers don?t have to gamble on IT,? said Ballmer. In simple words, it means that both the giants are bringing their respective expertise to the table so that they save on efforts and resources to fill gaps. The duo has obviously sensed the competition building up in the space, with rivals such as Cisco and EMC partnering to introduce Acadia a similar deal to promote cloud-based offerings.

While the HP-Microsoft deal is an eye-opener in itself, closer home, the potential in these new models can be gauged from the fact that while announcing the financials for the quarter ending December 2009, Infosys CEO Kris Gopalakrishnan said that most clients in emerging markets are leapfrogging into these new engagement models like cloud-based offerings. ?In emerging markets, these are absolutely the way purchases are happening. All the deals we are doing in

India are based on these new engagement models,? he clarified while announcing a 2.8% sequential rise in revenues to Rs 5,741 crore for the quarter. Announcing a 6.1% growth in volumes driven by the recovery in the financial services vertical, the company has also upped its guidance for the full year and now expects revenues in the range of Rs 22,473-Rs 22,519 crore, an annual growth of 3.6-3.8%.

Infosys, which has recoded a significant increase in its fixed price contracts, says that these solutions will help in get on the non-linear growth trajectory, which simply means higher margins and lesser dependence on headcount. While the company is developing solutions for all verticals retail and financial services are specific areas of interest. Ashok Vemuri, senior vice-president and global head banking and capital markets at Infosys says, ?We are building solutions across the board like for credit card, trade surveillance along with platforms for broker dealers, compliance, investment capabilities, regulatory and risk management among others.?

The company has also recently unveiled a third-party mobile applications platform called Flypp, which instead of being device centric could be used by any operator for its entire customer base. Around 5% of the company?s revenues are coming from the new engagement models. However, Subhash Dhar, senior vice-president and head of the communications, media and entertainment business unit at Infosys informs that the percentage contribution has remained the same over the last quarter, the number in terms of actual revenue contribution have almost doubled.

In the case of TCS, which reported a 2.9% sequential increase in its revenues last quarter, K Ananth Krishnan, vice-president and chief technology officer, TCS writes in a recent white paper: ?TCS believes that cloud computing will be very attractive to the enterprise IT world and specifically to IT service providers, primarily due to the infinite opportunities around innovative business models. While the technology foundations of cloud computing can be considered a gradual evolution, TCS firmly believes that the business models will prove to be potentially disruptive.? However, it has not announced any definite investment numbers.

Another space which is getting hotter with the change in the business models and increased competitiveness is the area of acquiring intellectual property (IP) and patents. Having woken up to the fact that having their own patented products and services not only helps in better revenues margins but also protects them against loss of revenue due to counter filing of patents, companies such as TCS, Infosys and Wipro have upped their patent filing applications like never before.

The number of patents being filed by the top league Indian IT companies will almost double this year over the applications filed last year. TCS, which has a lead in this area, filed around 60 patents last fiscal and hopes to touch the 100 mark next fiscal. TCS which started to formulate an IP policy over the last two years has over 50 patents in its kitty. For Infosys, providing more IP-based solutions and services to its clients, is part of its long-term strategy of differentiating its offerings.

Wipro, that files patents simultaneously in several countries, filed for 13 patent families last year. The number will double to up to 25 patent families this year. Some of the areas of filings include fields such as cloud and grid computing, communications, enterprise and mobility.