How will Cloud Computing affect the outsourcing business

HI Guys, i have been hearing a lot about Cloud Computing these days and have been thinking about , if all the noise around it is HYPE or if it will actually impact the outsourcing business in particular. If the cost of technology will went down, so what ? - Countries like India, etc. score on cheap labor and any cost reduction in the technology will further be advantageous to them not to WEST... what do you suggest guys?
For those who wish to know , what is Cloud computing, here is the text from WIKI:

Cloud computing is Internet-based computing, whereby shared resources, software and information, are provided to computers and other devices on-demand, like the electricity grid.