Last week, I read an interesting article in the Financial Times, in which Infosys chief executive Kris Gopalakrishnan discusses the threats and opportunities that established outsourcing providers face from cloud computing. “The slowdown has forced companies to look at cloud computing seriously," he says. "It is a change that is happening and if we are not adapting to that change, we may get caught out.” At the same time, he adds, he and his team are exploring cloud computing as an opportunity to tap into a much wider market for its services, consisting of the many small and medium-sized businesses that don't have the financial resources to engage with a company like Infosys.

That got me thinking: what IS the difference between outsourcing and cloud computing, anyway? How does a company likes salesforce.com differ from a provider of outsourced customer service applications, if at all? And bearing in mind that cloud computing is rapidly maturing to embrace software development and infrastructure provision, as well as software-as-a-service (SaaS), can we continue to draw meaningful distinctions between the two?

The more I think about these questions, the more confused I get. To my mind, cloud computing describes an approach whereby IT resources (physical servers, databases, middleware, applications and so on) are provided as a service over the Internet, on an on-demand basis. In effect, cloud computing IS outsourcing - or is it?

At least I'm not alone. Recent research from market analyst firm Ovum says that many enterprise customers remain in the dark as to a robust definition of cloud computing. But service providers continue to invest in this technology at an impressive pace, because for them - traditional services players, outsourcing companies and telecom/network operators offering enterprise-class services - the evolution of the cloud computing market can bring distinct opportunities and challenges, according to Ovum analyst John Madden.

“However one views the cloud market, service providers want to remain active participants in the evolution of cloud services,” he says. “Even if the hype level in cloud computing remains high, providers fear that not talking about cloud as part of their services portfolio could lead to customers viewing them as also-rans in this evolving market,” he adds.

I'm going to give the matter more thought in the coming week and would like to invite you to submit any ideas to me, at jessica@sourcingfocus.com. What's the difference between cloud computing and traditional outsourcing, and what's the likely impact of the former on the latter? I'll come back to you with my findings soon.