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There was an interesting piece in the Financial Times recently which speculated that Cloud Computing is a threat to the business model of the Indian IT outsourcing industry. It's a point which has made before, summed up nicely by NetSuite CEO Zach Nelson when he noted that “There will be an Accenture of The Cloud; whether it will be Accenture remains to be seen.”

The FT article was based on an interview with the chief executive of Infosys, Kris Gopalakrishnan who noted: "The slowdown has forced companies to look at Cloud Computing seriously . . . it is a change that is happening and if we are not adapting to that change we may get caught out. The question is how much the market will move to the new form of computing."

Certainly there's plenty of activity going on among the outsourcing providers to position themselves within The Cloud. Recent interviews with senior executives of Patni, for example, have seen that Indian firm laying out its credentials to stake a claim on Cloud-based services revenues. Among the Western outsourcing firms, the likes of Capgemini already has a strong SaaS offering while BT is building its own Cloud Computing portfolio out from multiple perspectives – applications, consulting and infrastructure.

So is Cloud a threat or an opportunity for such firms. Well, it's interesting that if you talk to a typical XYZ outsourcing/consulting firm, the people in the embryonic Cloud practices are evangelically enthused by the opportunity. Those in the Oracle practices sort of get it, recognise it's going to happen, but would rather we didn't raise the subject right now. Those in the SAP practices want little or nothing to do with such heretical talk and would rather you just went away.

What is certain is that the emergence of Cloud Computing does mean an end to the site of coachloads of consultants turning up in the car park on day one of a major ERP implementation and that has serious implications for the revenue model of many outsourcing/consulting firms. It's akin to the challenge that faces the ERP application vendors such as SAP. Shifting to a Cloud-based subscription model will impact irreversibly on the business model they're used to.

On the other hand, as Gopalakrishnan notes that Cloud Computing could also lead to new opportunities for firms such as his own, enabling it to reach down into the mid-market companies that currently do not feature greatly on Infoysys balance sheet. There's also an enormous need for infrastructure to accommodate multi-tenancy and that means work for data centre management firms and by extensions outsourcers. There's also change management and strategic planning implications to be taken into account for any significant move to The Cloud and that's bread and butter stuff for an Accenture or an IBM. Then there's the G-Cloud initiative and all those lovely contracts still to come from the outsourcer's happy hunting ground of the public sector.

What will be interesting to observe is to see how the leading firms respond to the challenges and opportunities  they face. If the Tories win the next general election it's likely that large parts of the hopeless NHS National Programme for IT will be torn up and replaced with a Cloud alternative.  What that means for the existing contracts with the likes of BT and CSC remains to be seen.  Will they be ready to renegotiate for a Cloud-based alternative or will they want a pay-off? The contractual aspects of the NHS programme have been cloaked in controversy all the way through; a move to The Cloud may do little to change that state of affairs.

But that's for the future. For now, it's clear that the savvy outsourcing/consulting firm should be ramping up its Cloud credentials and putting in place the skills and capabilities necessary to exploit what could be a fantastic new set of markets for them. There will still be a role for the outsourcing old guard and the old way of doing things – we still haven't seen the back of mainframes despite the number of predictions of its demise and they all still need managing! - but what we will see is the emergence of new demands on outsourcers from Cloud-hungry end users.

There will be an Accenture of The Cloud. Who it is remains to be seen.