We’ve been writing about how traditional service providers, such as Accenture, have been starting cloud hosted services to keep up with the changing IT world. This is a trend that extends around the world, including to business process outsourcing (BPO) providers.

According to the Times of India, Tata Consulting Services (TCS) landed 200 customers for its iON cloud service in 2011, falling short of its 1,000 customer goal.

iON, an IT-as-a-service offering for SMBs in India, was launched in February of 2011 with the ambitious goal of reaching 1 billion in revenue within five years. According to ZDNet TCS already had 135 customers at launch.

According to DNA India:

Even if the $1 billion claim were to be taken at face value, Eleswarapu and Singh said, the initiative would only contribute about 5% to TCS’ operating profits within that time frame and that is not significant in the bigger scheme of things, according to them. More such non-linear initiatives by other Indian IT firms will likely emerge as a differentiator by the next fiscal, they said.

The launch was notable not just for TCS’ cloud adoption, but because the service was focused on the company’s domestic market, rather than its traditional business process outsourcing model. The addressable market in India is potentially huge. DNA India reported in March that TCS claims that 60% of Indian SMBs don’t have ERP software in place yet. Last year The Financial reported that cloud computing is catching on faster in emerging markets like India.