In today's software industry many business organizations are realizing that Software Development Outsourcing (SDO) is an imperative and strategic step for their system operation success. Many organizations have or are in the process of implementing such business transformation. This study is to investigate the status quo of strategic SDO in the software industry. To conduct this research, a mixed method exploratory study that consists of a survey and multiple cases has been adopted. The research unveils how industrial software organizations capitalize on SDO as a strategic tool in their product development.