In light of AstraZeneca’s decision to scale back the amount of business it outsources to India, the Wall Street Journal has suggested that Indian suppliers will have to adapt their services accordingly or face a rapid decline in business and revenues.

This results from the fact that cloud computing is becoming far more popular with organisations like AstraZeneca, which previously favoured outsourcing IT services offshore to India. The Journal reports that, now companies increasingly favour accessing their servers and software via the internet rather than on local networks or personal computers, cloud computing is starting to bite significantly into the profits of those making up the Indian outsourcing industry, posing a huge risk to service providers that fail to adapt.

“It’s like what happened when Amazon arrived,” said C.P. Gurnani, chief executive of Tech Mahindra Ltd, referring to bookstore chains like Borders, which closed down, and Barnes & Noble, which had to reinvent itself.

Outsourcing currently accounts for roughly 20 per cent of all of India’s exports of goods and services.

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