diff --git a/docs/extension.md b/docs/extension.md
new file mode 100644
index 000000000..9eeea7b19
--- /dev/null
+++ b/docs/extension.md
@@ -0,0 +1,104 @@
+# About
+
+The Compose application model defines `service` as an abstraction for a computing unit managing (a subset of)
+application needs, which can interact with other service by relying on network(s). Docker Compose is designed 
+to use the Docker Engine ("Moby") API to manage services as containers, but the abstraction _could_ also cover 
+many other runtimes, typically cloud services or services natively provided by host.
+
+The Compose extensibility model has been designed to extend the `service` support to runtimes accessible through
+third-party tooling.
+
+# Architecture
+
+Compose extensibility relies on the `provider` attribute to select the actual binary responsible for managing
+the resource(s) needed to run a service.
+
+```yaml
+  database:
+    provider:
+      type: awesomecloud
+      options:
+        type: mysql
+        size: 256
+```
+
+`provider.type` tells Compose the binary to run, which can be either:
+- Another Docker CLI plugin (typically, `model` to run `docker-model`)
+- An executable in user's `PATH`
+
+To be a valid Compose extension, provider command *MUST* accept subcommand `compose` (which can be hidden)
+with subcommands `up` and `down`.
+
+## Up lifecycle
+
+To execute an application's `up` lifecycle, Compose executes the provider's `compose up` command, passing 
+the project name, service name and additional options. The `provider.options` are translated 
+into command line flags. For example:
+```console
+awesomecloud compose --project-name <NAME> up --type=mysql --size=256 "database"
+```
+
+> __Note:__ `project-name` _should_ be used by the provider to tag resources
+> set for project, so that later execution with `down` subcommand releases 
+> all allocated resources set for the project.
+
+## Communication with Compose
+
+Providers can interact with Compose using `stdout` as a channel, sending JSON line delimited messages.
+JSON messages MUST include a `type` and a `message` attribute.
+```json
+{ "type": "info", "message": "preparing mysql ..." }
+```
+
+`type` can be either:
+- `info`: Reports status updates to the user. Compose will render message as the service state in the progress UI
+- `error`: Lest the user know something went wrong with details about the error. Compose will render the message as the reason for the service failure.
+- `setenv`: Let's the plugin tell Compose how dependent services can access the created resource. See next section for further details.
+
+```mermaid
+sequenceDiagram
+    Shell->>Compose: docker compose up
+    Compose->>Provider: compose up --project-name=xx --foo=bar "database"
+    Provider--)Compose: json { "info": "pulling 25%" }
+    Compose-)Shell: pulling 25%
+    Provider--)Compose: json { "info": "pulling 50%" }
+    Compose-)Shell: pulling 50%
+    Provider--)Compose: json { "info": "pulling 75%" }
+    Compose-)Shell: pulling 75%
+    Provider--)Compose: json { "setenv": "URL=http://cloud.com/abcd:1234" }
+    Compose-)Compose: set DATABASE_URL
+    Provider-)Compose: EOF (command complete) exit 0
+    Compose-)Shell: service started
+```
+
+## Connection to a service managed by a provider
+
+A service in the Compose application can declare dependency on a service managed by an external provider: 
+
+```yaml
+services:
+  app:
+    image: myapp 
+    depends_on:
+       - database
+
+  database:
+    provider:
+      type: awesomecloud
+```
+
+When the provider command sends a `setenv` JSON message, Compose injects the specified variable into any dependent service,
+automatically prefixing it with the service name. For example, if `awesomecloud compose up` returns:
+```json
+{"type": "setenv", "message": "URL=https://awesomecloud.com/db:1234"}
+```
+Then the `app` service, which depends on the service managed by the provider, will receive a `DATABASE_URL` environment variable injected
+into its runtime environment.
+
+> __Note:__  The `compose up` provider command _MUST_ be idempotent. If resource is already running, the command _MUST_ set
+> the same environment variables to ensure consistent configuration of dependent services.
+
+## Down lifecycle
+
+`down` lifecycle is equivalent to `up` with the `<provider> compose --project-name <NAME> down <SERVICE>` command.
+The provider is responsible for releasing all resources associated with the service. 
\ No newline at end of file
diff --git a/pkg/compose/plugins.go b/pkg/compose/plugins.go
index 315f464cd..62ed324d5 100644
--- a/pkg/compose/plugins.go
+++ b/pkg/compose/plugins.go
@@ -59,7 +59,7 @@ func (s *composeService) runPlugin(ctx context.Context, project *types.Project,
 		return err
 	}
 
-	cmd := s.setupPluginCommand(ctx, project, provider, plugin.Path, command)
+	cmd := s.setupPluginCommand(ctx, project, service, plugin.Path, command)
 
 	variables, err := s.executePlugin(ctx, cmd, command, service)
 	if err != nil {
@@ -153,11 +153,14 @@ func (s *composeService) getPluginBinaryPath(providerType string) (*manager.Plug
 	return manager.GetPlugin(providerType, s.dockerCli, &cobra.Command{})
 }
 
-func (s *composeService) setupPluginCommand(ctx context.Context, project *types.Project, provider types.ServiceProviderConfig, path, command string) *exec.Cmd {
+func (s *composeService) setupPluginCommand(ctx context.Context, project *types.Project, service types.ServiceConfig, path, command string) *exec.Cmd {
+	provider := *service.Provider
+
 	args := []string{"compose", "--project-name", project.Name, command}
 	for k, v := range provider.Options {
 		args = append(args, fmt.Sprintf("--%s=%s", k, v))
 	}
+	args = append(args, service.Name)
 
 	cmd := exec.CommandContext(ctx, path, args...)
 	// Remove DOCKER_CLI_PLUGIN... variable so plugin can detect it run standalone