Cloud business a double-edged sword for IT companies, say analysts

TCS, for example, derives 25% of its overall revenues from the digital services

None of the Indian IT services players would be disclosing their cloud revenue numbers as yet, though they have been quite vocal in the recent past about plans to strengthen their portfolios in the segment. Analysts are worried over the aggressive manner in which IT services companies are growing their cloud portfolios. They have observed that the very objective behind moving to cloud by the clients is to reduce costs, but this may affect their profitability.

Cloud itself is not a low-margin business, but it is cannibalising some of the traditional infrastructure and application businesses, and as such, its potential as