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The Fine Print on TCS iON Cloud Offering Revealed

Added 14th Mar 2011

TCS’ Global Head for Small and Medium Business, Venguswamy Ramaswamy, has unveiled details of its iON cloud computing service.

The service, which launched on 15th February, 2011, is being touted as the world’s first truly end-to-end cloud service offering for SMBs. It provides start-ups and SMBs with IT infrastructure from desktop hardware to office applications and from enterprise applications (like payroll) all the way up to business analytics.

Ramaswamy said the SMB offering was aimed at companies upto Rs 500 crore or about 1,500 employees. He added that 95 percent of Indian companies were SMBs and 60 percent didn’t have any ICT infrastructure.

Ramaswamy estimated that iON will lower IT TCO by between 35 percent to 40 percent.

The service, which has a 24x7 helpline, already has over 150 customers claims Ramaswamy, including well-known brands like Kaya Skin Clinic, G.K. Vale, and Ginger Hotels.

The service is being pushed in India via 90 “cloud service partners”, said Ramaswamy.

Interestingly, Ramaswamy added that TCS was also providing networking services (from its datacenter to the client), because it wanted to deliver end-to-end services.

But for SMBs eager to unshackle their IT headaches and jump on TCS’s iON cloud, here are a few details they need to watch out for.

  • Time lock-in. TCS is asking for a three-year lock in for the service. Although Ramaswamy said that they have not instituted a penalty system for companies that want out earlier, they will have to give TCS a valid reason.

But Ramaswamy also added that TCS will provide exiting customers with data formatted in a way that’s easily readable, countering one of the important fears CIOs have before moving to a cloud.

  • Offering lock-in. The iON offering is built in six layers and SMBs buying into it have to buy into the entire stack from day one--whether they need certain services or not.

Here is a list of iON’s different levels, also available on the TCS site

Layer 1: Hardware: Desktops, Laptops, POS devices.

Layer 2: Network: LAN, WAN, Routers, Internet

Layer 3: Common Office Apps: Messaging, Office management, Intranet management

Layer 4: Common Business Apps: CRM, Payroll, HR management systems, Finance and Accounting

Layer 5: Vertical Core Apps: POS, Inventory Management (apps that are specific to verticals that TCS is targeting including retail, manufacturing, wellness, and education

Layer 6: Niche Vertical Applications: Business Analytics

Asked whether an SMB customer could only buy into layer 1 to layer 3 services, for example, Ramaswamy said, “We are not targeting them (companies that don’t want the entire stack).”

  • Upfront fee. As a “token of their commitment”, Ramaswamy said that SMBs who want to be part of the iON cloud need to pay an upfront fee equivalent to two months worth of subscription fees.
  • Multiple payment models. Ramaswamy said that TCS is still working out a standard payment model. Currently, they have a few models including share of revenue and monthly subscription.
  • Only four verticals. Currently, iON is only offering services to four verticals including manufacturing, retail (including POS devices), education and wellness.

Ramaswamy added that the business, which has been spun off into a unit by itself, expects to have over 1,000 customers this year and to hit $1 billion in revenues in five years.

According to TCS research, iON addresses a market that’s growing at 24 percent (ICT growth in SMBs)--that’s three times the growth rate of ICT in large enterprises. The current size of IT market for Indian SMBs is $11.9 billion and will hit $48.9 billion by 2015.

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