Wipro, one of India's largest IT outsourcing providers, is expanding into cloud computing. The company announced Tuesday a hosting service for software companies looking to offer their products in a software-as-a-service model.

The service, called w-SaaS, will let software companies offer their existing applications as SaaS in a multi-tenant model, Wipro said, adding that w-SaaS should reduce the cost of what it would take a company to turn its apps into a software service by about 50 percent. After other costs, including what a software company pays Wipro, the total cost savings would be between 10 percent and 20 percent, according to Wipro.

The service runs on Oracle's grid computing technologies, which includes Oracle databases, middleware, and virtualization software.

With this announcement, Wipro is demonstrating how it plans to join cloud computing rather than lose business to it.

India-based IT outsourcing companies such as Wipro, Infosys, and Tata experienced enormous growth following the 2001 economic slowdown, with many U.S. companies looking to save money by sending software development work overseas. While the India outsourcing industry continues to do well, the global economic slowdown has affected its growth, as customers have cut back in IT spending and pressed for lower rates on services.

Cloud computing has the potential to further erode growth for India's outsourcing industry, as it competes on many of the same benefits sought by businesses, including reduced IT costs, less internal development of software, and reduced management of applications and hardware.

For example, rather than use offshore IT help to develop or manage software at a reduced cost, a CIO might choose instead a hosted software service. Some of the emerging platforms, such as Salesforce.com's Force.com, also make it easier to quickly develop software that's hosted by another company.

Now Wipro is getting into the cloud computing game with Oracle, yet another company looking for its role in this area. "We are delighted to team with Wipro to provide SaaS solutions," said John Gawkowski, VP of platform technology solutions at Oracle, in a statement. The partnership will "help our joint ISV customer base in their adoption of SaaS," he said.

Oracle's planned $7.4 billion acquisition of Sun Microsystems should provide it with good positioning in the emerging areas known as platform-as-a-service or infrastructure-as-a-service, meaning the services software companies would use to host their products as SaaS.

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