Software Architecture and Outsourcing Governance: Raising Thoroughbreds Versus Cultivating Schools of Goldfish

Software development projects are in need to graft external expertise and knowledge for multiple reasons and under different governance arrangements. The classic outsourcing literature focuses on integrating such knowledge under conditions where a single application is built by an outside vendor under a detailed contract dictating the process, outcomes and governance of such undertaking. In such a situation the client articulates and shares the entire business logic and system requirements of the application to be built with the vendor as dictated by the mutual contract. The growing popularity of deploying a modular micro-service architecture (MSA) questions some assumptions that underlie the classical software development outsourcing model and its governance. While under MSA software developers on the client and vendor side may continue to work on the core business logic of the whole application, multiple microservices will be outsourced from third-party vendors. Transitioning to MSA and sourcing from multiple vendors with short engagement cycles and under arms-length arrangements introduces new levels of complexity to outsourcing governance. This calls for introducing new governance logics and arrangements, new types of organizing and monitoring of software development teams, and addressing new types of risks introduced by microservice architecture and its stronger coupling with commercial service stacks (such as AWS). We introduce a granular, three-layered outsourcing model to analyze make-or-buy decisions when MSA is deployed and seek to understand its benefits and risks while establishing outsourcing arrangements. In conclusion, we identify outsourcing research challenges introduced by the growing use of MSA in software development.