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 the sports industry looks ahead to 2026, sponsorship agreements are becoming more complex, more strategic, and more closely scrutinized. We sat down with Doneld “Don” Shelkey, a leading sports sponsorship and commercial agreements lawyer at our firm, to discuss what he’s seeing in the market and what sponsors and rights holders should be thinking about now.

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.

Morgan Lewis’s technology, outsourcing, and commercial contract team, along with Boston Consulting Group, recently hosted a roundtable dinner in London, during which senior stakeholders from technology suppliers and large businesses discussed how the rapid evolution of artificial intelligence (AI) is impacting offshoring and outsourcing.

The European Supervisory Authorities (ESAs) published on November 18, 2025 a list of 19 critical information and communications technology (ICT) third-party providers (CTPP) that will be subject to direct oversight under the EU Digital Operational Resilience Act (DORA). The list includes hyperscale cloud providers, data center providers, infrastructure and network providers, and providers of financial services-specific technology.

Open-source software (OSS), by its nature, is sometimes overlooked as part of technology transactions. OSS is often a key aspect of a business’s software ecosystem, whether it is used in internal systems or forms a fundamental part of solutions that are sold to customers or used to provide services to customers; however, OSS often sits in the background, as a foundation of a software solution, and can therefore go unconsidered by those not familiar with its uses, benefits, and risks.

We are excited to welcome Mathilde Carle as a partner in Morgan Lewis’s Paris office and as a guest contributor to our Tech & Sourcing Spotlight series to discuss intellectual property (IP) protection and other related issues in agreements to design, build, license, host, and support digital solutions, including automation, AI, and software as a service (SaaS) products.

As part of our Spotlight series, we welcome Marie Davy, who recently joined Morgan Lewis as a partner in our Paris office, to discuss key issues to consider when negotiating global distribution agreements.