Evaluating Technical Debt in Cloud-Based Architectures Using Real Options

Abstract

A Cloud-based Service-Oriented Architecture (CBSOA) is typically composed of web services, which are offered off the cloud marketplace. CB-SOA can improve its utility and add value to its composition by switching among its constituent services. We look at the option to defer the decision of substitution under uncertainty. We exploit Binomial Options to the formulation. We quantify the time-value of the architecture decisions of switching web services and technical debt they can imply on the structure. As CB-SOA are market-sensitive, dynamic and "volatile", the decision of deferral tends to be sensitive to these dynamics. Henceforth, the structural complexity of a CB-SOAcan change over time and so the technical debt as its constituent web services are modified, replaced, upgraded, etc. The method builds on Design Structure Matrix (DSM) and introduces time and complexity aware propagation cost metrics to assess the value of deferral decisions relative to changes in the structure. Architects of CB-SOA can use our method to assess the time value of deferring the decisions to switch web services relative to complexity, technical debt and value creation. We demonstrate the applicability of the method using an illustrative example.