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SaaS, ITaaS, and ProaaS

We all know about Software As A Service (SaaS). Gartner has predicted in 2006 that global SaaS revenues would become 25% of the software market. And Tata Consultancy Services (TCS) has announced an IT As A Service (ITaaS) recently. TCS is going to provide software, hardware, and related services, in one package to small and medium businesses (SMBs) in India first, and then in other geographies. If this succeeds, even medium large businesses may try the model.

This brings me to the point: In the US and EU, software companies and server farms (data centers) are generally not located in the metro cities. They are located in small towns; some even in villages. It helps spread the growth and provides job opportunities to qualified people who do not want to leave their villages and move to the big cities.

IT aaS seems to be a good idea. It could provide small businesses in India the ability to use world class software at affordable rates.And store their data in data centers adhering to international standards in Information Security. And also obtain business continuity and disaster recovery assurance.

I am sure other IT majors will soon come out with similar offerings targeting SMBs in India.Some of them could target verticals such as Pharma, Chemicals, and other such regulated industries for this end-to-end service-based IT outsourcing.

However, it doesn't look like TCS or any other IT majors are planning to move beyond metros and may be the bigger Tier-2 cities (Mysore, Pune, Coimbatore, Lucknow, Chandigarh, Bhubaneswar). Every week we see announcements of more investments in campuses being built in the Metros and Tier-2 cities. No news about any of the companies going into the hinterland. Even if the respective State governments are willing to give all kinds of incentives, the IT majors seem to believe that it would be difficult to find talent in the small towns of India. Looks like the biggies want to exhaust the potential of all the major cities, before moving into the heart of the country. But by then, other cost effective destinations could crop up in other geographies, and the Indian IT story may eventually get limited to 10-12 cities or less.

So, what should we do to address the situation? I don't think we can influence the strategies of IT majors. They dole out a few crore rupees each year to meet their corporate social responsibility goals, but do not seem genuinely interested in 'game changing' moves for a win-win scenario. Nasscom is not bothered at all.

May be young entrepreneurs should come out with ITaaS models of their own. It should not cost a lot for a few IT entreprenurs in each town to setup a small data centre, ensure power supply, and provide IT services to small and medium businesses in that town and neighbouring towns.

Another idea: Why not try 'Programming As A Service' (ProaaS)? (He he ! my own coinage)Groups of programmers from small towns or villages could setup a ProaaS Centre, and offer coding services to big IT majors for a fee. The SW development process any way involves breaking the system into units and having teams work on different units and put the whole together. Apart from coding services, the ProaaS Centres could also offer testing services to these IT majors or even to small and medium IT businesses, so that they can quickly acquire the scale of say, a big IT firm, and then scale down once the project gets over.

For all these ideas, and many more to germinate, and then succeed, we need: Proper eco system to guide and nurture the ideas, and adequate bandwidth and power supply in rural and semi-urban areas.

Comments

Anindita said…
I read your post with interest because several times in the past few months, I have considered shifting back home to Allahabad (not yet classified as Tier-2) and working from there, but what stops me from doing so are these:
(1) Erratic power supply
(2) Inadequate bandwidth for net access
(3) No "face-time" with buyers of my services (writing and translating technical documents).

Points 1 and 2 need to be tackled at a governmental level, but point 3 is what you mentioned in your post - that you haven't seen the IT biggies moving out of metros and into smaller cities.

The other point that I noticed in your post was about scaling up and scaling down the ProAAS centres in smaller cities. Would this mean that there wouldn't be work all year round in the smaller cities - and so the talent would still continue to migrate to metros to seek a stable-er employment?
Kumar Narasimha said…
Anindita,

I feel it will be at least 2 years before we can move to places like Allahabad and expect proper broadband, and flight connectivity.Power supply issue can be addressed at the individual level.

Yes, IT biggies won't move there as they (almost all of them)lack inclusive or sustainable thinking. But that shouldn't stop entrepreneurs to offer IT services to the local (State) economy.

I did not mean scaling up or down of ProaaS Centres.Sorry if it came thru that way :-) I meant that using a ProaaS Centre, a small/medium IT firm can scale up quickly for a huge project and then scale down when the project gets over. But the SMB IT firm may use the ProaaS Centre for a different IT project.Once the model succeeds, it should logically see people (like us) moving back to towns and villages.

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