Economics-Driven Approach for Managing Technical Debt in Cloud-Based Architectures

Cloud-based Service-Oriented Architectures are composed of web services, offered via the cloud. The substitution decision may introduce technical debt, which needs to be managed, cleared and transformed to value-added. We define the concept of technical debt for Cloud-based SOA. We formulate the problem of web service substitution and its technical debt valuation as an option problem (option-to-switch between services). We use options analysis to manage and clear technical debt. We report on the formulation, which exploits Binomial Options Analysis. We evaluate the approach using an example.