Strategy question

We've outsourced a critical mobile app to a 3rd party developer. How do we decide when to take that development in house?

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What this question tests

Tests strategic vendor-management thinking: when to bring outsourced development in-house, balanced against cost, speed, and control.

Define the decision criteria upfront: cost trend, delivery speed and quality, IP/security sensitivity, and how core this app is to the company's strategy.
Assess current pain: is the third party slow to iterate, expensive as usage scales, or creating a knowledge gap that risks continuity.
Weigh in-house pros: faster iteration, tighter alignment with company roadmap, and IP control, against cons: upfront hiring cost and ramp-up time.
Consider a hybrid transition: hire a small in-house team to own strategy and critical pieces while the vendor still executes non-core work during transition.
Set a trigger threshold: bring it in-house when the app becomes strategically core (a key differentiator) or when vendor cost/quality crosses an agreed line.

Gives concrete decision criteria (cost trend, strategic centrality, IP risk) rather than a vague 'it depends' answer.
Proposes a hybrid transition path, which reflects how real organizations de-risk this kind of change instead of an abrupt switch.
Uses an illustrative number, e.g. assume vendor costs have grown 40% while iteration speed dropped, as the trigger for evaluating in-house.
Ties the decision to strategic centrality, since a critical, differentiating app deserves more control than a commodity one.

Giving a one-size-fits-all answer (always bring in-house, or always keep outsourced) without decision criteria.
Ignoring the transition risk and cost of building an in-house team from scratch.

How would you manage the transition without disrupting ongoing feature delivery?
What would make you keep this outsourced indefinitely?