Tech & Sourcing @ Morgan Lewis

In an era defined by economic volatility, supply chain disruptions, rapid technological change, and geopolitical risk, outsourcing remains an attractive strategy for businesses seeking efficiency and scalability. At the same time, uncertainty has fundamentally changed what clients expect from their outsourcing agreements. Rigid, long-term contracts that assume stable market conditions are increasingly misaligned with business reality.

ISG’s latest index highlights a technology services and software market that is increasingly defined by cloud momentum and AI-driven investment shifts. While headline growth remains strong, the underlying dynamics point to a more selective and strategic buying environment as enterprises head into 2026.

As demand for data-intensive and AI-driven workloads continues to grow, customers are increasingly encountering constraints on cloud compute resources—particularly specialized processors and region-specific capacity. These market dynamics raise a fundamental question for customers and their advisors: will the promised compute capacity actually be available when it is needed?

As AI continues to reshape technology transactions, deal lawyers have been compelled to revisit longstanding allocations of risk, revisit boilerplate, and develop new contracting mechanics to address novel uncertainty. While the core goals of technology deals remain the same—facilitating commercial outcomes and protecting the business—AI introduces distinctive pressure points across intellectual property, data, regulatory exposure, and liability frameworks.

As technology transactions continue to evolve rapidly, staying ahead of trends, innovations, and regulatory shifts is crucial. Join our Tech & Sourcing Webinar Series on January 22 at 12:00 pm ET/11:00 am CT for an insightful discussion on Tech Transactions: The Year Ahead. This session, featuring Doneld G. Shelkey, Marina G. Aronchik, and A. Benjamin Klaber, will delve into developments in artificial intelligence, data-driven deals, and new sourcing models, providing key insights to help navigate the changing landscape in 2026.

Global capability centers have become a central component of many companies’ technology and shared services strategies. Unlike traditional outsourcing, GCCs allow companies to retain direct control over personnel, intellectual property, and delivery priorities—with this control, however, comes a significantly different legal risk profile.

Join us for our Tech & Sourcing Webinar Series on Wednesday, January 7, 2026 at 12:00 pm ET (11:00 am CT) for a forward-looking discussion with Barbara Melby, Mike Pierides, and Chris Archer on Outsourcing: The Year Ahead—a timely session packed with practical insights and strategic perspectives to help counsel and deal teams prepare for what’s ahead in 2026.

The holiday season often brings an increase in events featuring Santa Claus, themed characters, or other performer—but have you ever thought about the contractual clauses Santa agrees to in connection with his appearances at these events? Like with any performance agreement or event contract, Santa and the event host will need a complete, well-written contract to properly set expectations and allocate responsibility so no one ends up on the naughty list. In the spirit of the holidays, this post highlights some key considerations in performance and event contracts.

Kari Krusmark, a partner in our technology transactions, outsourcing, and commercial contracts practice, is a leading advisor in complex technology initiatives, outsourcing arrangements, and digital transformation projects. With deep background guiding global companies through high-value technology deals, evolving regulatory requirements, and vendor ecosystem shifts, Kari has a unique perspective on how organizations should prepare for the rapidly changing technology and outsourcing landscape. Her insights highlight the key trends shaping 2026 and what businesses should be doing now to stay ahead.

As the use of generative artificial intelligence (GenAI) proliferates, customers and vendors face unique challenges in contract negotiations. This post discusses these challenges, offering viewpoints from both perspectives.