SaaS model for Outsourcing companies

With the advent of cloud computing and Software as a Service, what would be the implications on software outsourcing , especially Indian? The Indian outsourcing companies have reaped the benefits for over a decade , in companies world wide opting to lower software development and maintanance costs by outsourcing the development of many critical enterprise applications. 

Cloud computing is now offering the same benefits (potentially) to companies that had trouble doing in house software development. Does it mean that the outsourcing business model is bound for the decline in the next decade and will have Indian IT outsourcing shops scrambling to survive?

Not really. Consider the case of Wipro, which now entered the SaaS market with its own cloud offering ( partnering with Oracle). The firm has shown a willingness to adapt and assimilite new business models in the context of changing world wide technological landscape. This adaptation is more than just a good-to-have , and will probably decide the success and failure of many IT outsourcing companies. 

There are however some infrastrctural downsides for Indian IT companies entering the cloud computing space. The model assumes an uninterrupted availability of power especially to run massive hosted data centers out of a developing country such as India. Considering all reliability metrics needed to run enterprise apps, is this really feasible(yes, you can always have backup power for small operations, but for running massive datacenters, what would be the costs)? 

There are some questions here and I am pretty sure that the IT outsourcing companies are thinking through the issues.