Tata Looks to Expand Among SMBs
In a tough economy, the largest IT service providers — outsourcing firms and systems integrators — have been known to move downstream, seeking smaller deals with smaller customers. Cloud computing — and the ability to reduce the vendors’ cost of service — may also tempt the multi-billion-dollar, multinational IT firms to journey downmarket. Whatever the motivation, $6 billion Tata Consultancy Services (TCS) is making moves in the small and medium business (SMB) arena. Here’s how.
The consulting and business process outsourcing company is “stead-fast in increasing its presence” in that sector, according to research brief from Technology Business Research (TBR). TCS’ offering: IT-as-a-Service.
According to TCS, this product delivers centrally hosted applications in a shared-services environment.
“TCS will deliver the entire IT landscape of the customer organization including hardware, application, and network connectivity to the data centre,” the company says.
The TBR report notes that TCS late last year disclosed plans to migrate IT-as-a-Service on a pilot basis into India, Singapore and Europe.
The report states: “… TCS’ ITaaS solution can help the firm increase its presence in the global SMB market as the solution will be attractive to SMB clients who can leverage it to reduce hardware and software licensing costs.”
But the going won’t be easy. To this point, multinational companies have yet to “break into the SMB market successfully from a services standpoint,” said Erin Hichman, analyst with TBR’s Professional Services Business Quarterly.
TBR believes the task of penetrating the SMB space will be difficult even in TCS’ home base of India. Hichman said local success could be possible if the consulting firm leverages the brand of parent company Tata Group. In India, TCS will likely compete against Wipro and HCLT, she said. Both companies have as-a-service offerings.
Globally, TCS may encounter Fujitsu. Hichman said Fujitsu’s as-a-service solutions are available in Europe. Fujitsu announced its Infrastructure-as-a-Service product in November. Hichman said that service has also rolled out to Japan and North America. Dell Services may also prove a rival as it increases its presence in the SMB market, she added.