The adoption of the Service Oriented Architecture (SOA) as the foundation for developing a new generation of software systems - known as Service Based Software Systems (SBS), poses new challenges in system design. While simulation as a methodology serves a principal role in design, there is a growing recognition that simulation of SBS requires modeling capabilities beyond those that are developed for the traditional distributed software systems. In particular, while different component-based modeling approaches may lend themselves to simulating the logical process flows in Service Oriented Computing (SOC) systems, they are inadequate in terms of supporting SOA-compliant modeling. Furthermore, composite services must satisfy multiple QoS attributes under constrained service reconfigurations and hardware resources. A key desired capability, therefore, is to model and simulate not only the services consistent with SOA concepts and principles, but also the hardware and network components on which services must execute on. In this dissertation, SOC-DEVS - a novel co-design modeling methodology that enables simulation of software and hardware aspects of SBS for early architectural design evaluation is developed. A set of abstractions representing important service characteristics and service relationships are modeled. The proposed software/hardware co-design simulation capability is introduced into the DEVS-Suite simulator. Exemplar simulation models of a communication intensive Voice Communication System and a computation intensive Encryption System are developed and then validated using data from an existing real system. The applicability of the SOC-DEVS methodology is demonstrated in a simulation testbed aimed at facilitating the design & development of SBS. Furthermore, the simulation testbed is extended by integrating an existing prototype monitoring and adaptation system with the simulator to support basic experimentation towards design & development of Adaptive SBS.