The new generation of open networked IT systems poses particular challenges to software engineering due to their evolving nature and their high quality requirements. In particular, the management of service oriented systems requires the integration of perspectives from IT management, software engineering and systems operation and a systematic way to handle changes. In this paper we will present the core ideas of Living Models - a novel paradigm of model-based development, management and operation of evolving service oriented systems. A core concern of Living Models is to support the cooperation of stakeholders from IT management, software engineering and systems operation by providing appropriate model-based abstractions and the fostering of interdependencies. Based on this idea the running services together with their modelling environments constitute the basic unit of quality management and evolution. Living Models provides a coherent view of the quality status of the system (integrating the perspectives of all stakeholders) which evolves together with the running systems. This comes along with a software engineering process in which change is a first-class citizen.