There are two important shifts in software development: from object-oriented monoliths to service orientation and from the rigid specification-development-delivery to agile development when the needs of users are better taken into account as it can be reacted on the changes of the needs even during the development. In the point of intersection of these movements is the use of software confederations. The concept of software confederation uses decomposition of problem and application into smaller parts (services) and at the same time it is expected very tight cooperation with users as it is usual in agile development. Software confederations can be developed incrementally, quite easily modified during the development and even after the delivery. During the development of software confederations legacy systems and third party products may be used what reduces development and learning effort and opens opportunity for development subcontraction.