Tata Consultancy Services (TCS) is banking on cloud computing as a possible source of $1 billion in revenue over the next five years.

India’s largest outsourcer, TCS plans to target small and medium-size businesses with a portfolio of hardware, networking, and office and business software on a pay-per-use basis. Essentially, this IT-as-a-service arrangement grants businesses of all sizes access to powerful storage and computing power without having to lay out huge capital expenditures on IT infrastructure.

Dubbed iON, a fully integrated information technology solution for Small and Medium Business (SMB), the package encompasses the entire spectrum of an SMB’s technology needs, which range from business solutions like HR, finance, inventory, sophisticated domain-based ERP solutions to basic applications like email, document management and website services. iON is pre-configured with hardware, network and software bundled together and backed by business, technical and consulting services.

“iON will enhance India’s global competitiveness by giving 35 million Indian SMBs access to world-class, simple-to-use and scalable technology tools. SMBs can use the power of iON to build their business advantage and compete on the global stage,” said N Chandrasekaran, chief executive officer and managing director, TCS, and chief architect, iON, in a statement.

“Our endeavor has been to ensure that the SMBs can grow smarter and faster by having the latest technology solutions along with the advantage of a pay-per-use business model that frees up capital to re-invest in their core business. Though premiered in India, iON’s cloud-based services and pay-as-you-use business model is also uniquely suited to SMBs in other developed and emerging markets,” Chandrasekaran added.

Offering solutions in the cloud has been a money-making business model for plenty of companies, in particular industry darling Salesforce.com. The San Francisco-based company is anticipating revenue of about $2 billion in fiscal 2012, which ends in January.

“After taking a decade to achieve our first billion dollar year in fiscal 2009, we believe that our strong growth this year will allow us to deliver approximately $2 billion in revenue in fiscal 2012, making Salesforce.com the first cloud computing company to achieve that milestone,” said Marc Benioff, chairman and CEO Salesforce.com, in a press release.