India’s largest IT services firm Tata Consultancy Services (TCS) has slashed pricing for its cloud offering for small and medium businesses by more than 20% as it readies for an official roll out next month. The firm is all set to launch the IT-as-a-Service, unofficially called by some company executives as the ?Nano of IT?, around February 15.
Widely seen as chairman Ratan Tata?s dream project, the cloud offering will make information technology affordable to India’s 35 million small and medium businesses by lowering the total cost of ownership by 35-40%, compared to the licensing model now prevalent in the industry. Expensive capex investments required in IT will be converted into a monthly per user subscription model.
The firm has been piloting the service for many months ? FE first reported about the firm?s strategy and pricing in August last year. Many potential customers did not find its initial pricing attractive enough, leading to a climb down in rates, sources in TCS’ partner community from Delhi said. In verticals such as Manufacturing and Retail, the firm had initially priced the service at Rs 7,000-8,000 per user per month. The rates have now been cut to about Rs 5,500-6,000. In the Education segment, where pricing is modeled on a per student basis, rates have been cut from Rs 70 per student per month to Rs 50 per student, sources noted.
A TCS spokesperson said the firm had ?no comments to make at this stage? when FE approached for a confirmation on the pricing and roll-out plan.
Cloud services, delivered over the Internet, is an on-demand paradigm that can disrupt the way IT services are delivered today. Cloud computing uses virtualisation technologies and can potentially make an enterprise shed all of its IT assets one day ? servers, storage, and applications can all be rented as per need from cloud service providers.
TCS plans to launch the service in six verticals ? Manufacturing, Retail, Professional services, Wellness, Education and Textiles. The firm’s SMB offering includes a stack of hardware, networking, and software and new customers are expected to be locked-in for a period of three years. The firm has readied a solution catalogue to help customers pick and choose solutions according to need and the size of the organization. In software-as-a-service (SaaS), SMBs can start with document management and messaging solutions and go all the way up to business analytics at the high end, sources said.
The service is expected to be a major growth engine for TCS in the years ahead ? brokerage firm Motilal Oswal in a recent report said TCS was pursuing the cloud space aggressively.
?It is already providing Accounting, Procurement, HR and Analytics as a service in the cloud for SMEs, with around 300 revenue generating pilot customers, each having revenues of $50-300 million in the SaaS space. The stated intent is to have its cloud initiatives contribute 10% of its incremental revenues in some quarter next year, at which time TCS will probably start reporting cloud revenues separately,? the report noted.