There was another thread about the winners and losers in the IT job market as systems move to the cloud. The upshot is that things will change rather than shrink overall, but some IT careers will become less popular.
In our business (software development, sales and consultancy), we've gone from having a room full of servers to having almost no physical kit at all. Email is with Google, Project management is with Liquid Planner, issue tracking is with Pivotal Tracker, source code control is with Github - all of the 'internal systems' are web apps. We host some of these apps ourselves using virtual servers, the rest are provided as a service.
If we can do it then a company that uses IT mainly for office docs and accounting certainly can. Once everything is a web app you don't need to pay for windows licences, or the complex hardware to run it. You don't have to secure and manage all those windows desktops. Any old apps that need Windows can be setup on a terminal server to keep windows off the desktops. The benefits are much the same as the 'thin client' systems deployed in the past 20 years but this time they don't need so many big servers, increasing the savings further.
However, you still have IT projects, systems design, data warehousing and reporting requirements. As your data is now spread around in a bunch of web apps some things get harder - reporting across systems or implementing common policies are good examples of this.
It is the nature of Information Technology - it keeps getting simpler and easier to manage the information, so you are able to do more with the technology. One big change will be cultural in large IT departments - now individual departments can more easily shop for services outside the organisation, so the internal teams really need to add value. They can't let themselves be seen as slowing projects down and will need to compete on costs too in order to thrive. This will be a HUGE wake up call in some organisations. I have a few customers whose internal costs of deploying new systems are often the lion's share of any new implementation - that situation will become less common!
One really exciting thing is that all this new technology makes it easy to scale up a new idea. Look at companies like expensify.com - they take something really simple like expense claims and implement it really well. It doesn't take genius coders or a huge team - just a small bunch of people who understand technology, the business requirements, and good design in equal measure. They can create a product, market it worldwide, scale it up and have a big, profitable business in a way that wasn't possible when you had to visit a customer to install your software on their server.