diff --git a/packages/cli/src/commands/app/build.ts b/packages/cli/src/commands/app/build.ts
index d5a01d13a7..601e31a9c1 100644
--- a/packages/cli/src/commands/app/build.ts
+++ b/packages/cli/src/commands/app/build.ts
@@ -14,7 +14,7 @@
  * limitations under the License.
  */
 
-import { run } from 'helpers/run';
+import { run } from 'lib/run';
 
 export default async () => {
   const args = ['build'];
diff --git a/packages/cli/src/commands/app/serve.ts b/packages/cli/src/commands/app/serve.ts
index 51806aa9d6..22775242ca 100644
--- a/packages/cli/src/commands/app/serve.ts
+++ b/packages/cli/src/commands/app/serve.ts
@@ -14,29 +14,20 @@
  * limitations under the License.
  */
 
-import { spawn } from 'child_process';
-import { waitForExit } from 'helpers/run';
-import { watchDeps } from 'commands/watch-deps';
-import { createLogger } from 'commands/watch-deps/logger';
+import { run } from 'lib/run';
+import { createLogFunc } from 'lib/logging';
+import { watchDeps } from 'lib/watchDeps';
 
 export default async () => {
   // Start dynamic watch and build of dependencies, then serve the app
   await watchDeps({ build: true });
 
-  const child = spawn('react-scripts', ['start'], {
+  await run('react-scripts', ['start'], {
     env: {
-      FORCE_COLOR: 'true',
       EXTEND_ESLINT: 'true',
       SKIP_PREFLIGHT_CHECK: 'true',
-      ...process.env,
     },
-    stdio: ['inherit', 'pipe', 'inherit'],
-    shell: true,
+    // We need to avoid clearing the terminal, or the build feedback of dependencies will be lost
+    stdoutLogFunc: createLogFunc(process.stdout),
   });
-
-  // We need to avoid clearing the terminal, or the build feedback of dependencies will be lost
-  const log = createLogger();
-  child.stdout.setEncoding('utf8');
-  child.stdout!.on('data', log.out);
-  await waitForExit(child);
 };
diff --git a/packages/cli/src/commands/build-cache/index.ts b/packages/cli/src/commands/build-cache/index.ts
index a8a1a27e9d..e58313c6b2 100644
--- a/packages/cli/src/commands/build-cache/index.ts
+++ b/packages/cli/src/commands/build-cache/index.ts
@@ -14,48 +14,9 @@
  * limitations under the License.
  */
 
-import fs from 'fs-extra';
 import { Command } from 'commander';
-import { run } from 'helpers/run';
-import { Cache } from './cache';
-import { parseOptions, Options } from './options';
-
-function print(msg: string) {
-  process.stdout.write(`[build-cache] ${msg}\n`);
-}
-
-// Wrap a build function with a cache, which won't call the build function on cache hit
-export async function withCache(
-  options: Options,
-  buildFunc: () => Promise<void>,
-): Promise<void> {
-  const key = await Cache.readInputKey(options.inputs);
-  if (!key) {
-    print('input directory is dirty, skipping cache');
-    await fs.remove(options.output);
-    await buildFunc();
-    return;
-  }
-
-  const cache = await Cache.read(options);
-
-  const cacheResult = cache.query(key);
-  if (cacheResult.hit) {
-    if (cacheResult.copy) {
-      print('external cache hit, copying archive to output folder');
-      await cacheResult.copy(options.output);
-    } else {
-      print('cache hit, nothing to be done');
-    }
-    return;
-  }
-
-  print('cache miss, need to build');
-  await fs.remove(options.output);
-  await buildFunc();
-
-  await cacheResult.archive(options.output, options.maxCacheEntries);
-}
+import { run } from 'lib/run';
+import { withCache, parseOptions } from 'lib/buildCache';
 
 /*
  * The build-cache command is used to make builds a no-op if there are no changes to the package.
@@ -69,5 +30,3 @@ export default async (cmd: Command, args: string[]) => {
     await run(args[0], args.slice(1));
   });
 };
-
-export * from './options';
diff --git a/packages/cli/src/commands/clean/clean.ts b/packages/cli/src/commands/clean/clean.ts
index f18250d210..06998a4ca3 100644
--- a/packages/cli/src/commands/clean/clean.ts
+++ b/packages/cli/src/commands/clean/clean.ts
@@ -16,8 +16,8 @@
 
 import fs from 'fs-extra';
 import { resolve as resolvePath, relative as relativePath } from 'path';
-import { getDefaultCacheOptions } from 'commands/build-cache/options';
-import { paths } from 'helpers/paths';
+import { paths } from 'lib/paths';
+import { getDefaultCacheOptions } from 'lib/buildCache';
 
 export default async function clean() {
   const cacheOptions = getDefaultCacheOptions();
diff --git a/packages/cli/src/commands/create-app/createApp.ts b/packages/cli/src/commands/create-app/createApp.ts
index cb34dc0686..b5c9ba69eb 100644
--- a/packages/cli/src/commands/create-app/createApp.ts
+++ b/packages/cli/src/commands/create-app/createApp.ts
@@ -21,9 +21,9 @@ import inquirer, { Answers, Question } from 'inquirer';
 import { exec as execCb } from 'child_process';
 import { resolve as resolvePath } from 'path';
 import os from 'os';
-import { Task, templatingTask } from 'helpers/tasks';
-import { paths } from 'helpers/paths';
-import { version } from 'helpers/version';
+import { Task, templatingTask } from 'lib/tasks';
+import { paths } from 'lib/paths';
+import { version } from 'lib/version';
 const exec = promisify(execCb);
 
 async function checkExists(rootDir: string, name: string) {
diff --git a/packages/cli/src/commands/create-plugin/createPlugin.ts b/packages/cli/src/commands/create-plugin/createPlugin.ts
index 1af5832818..3c92397a3d 100644
--- a/packages/cli/src/commands/create-plugin/createPlugin.ts
+++ b/packages/cli/src/commands/create-plugin/createPlugin.ts
@@ -25,10 +25,10 @@ import {
   parseOwnerIds,
   addCodeownersEntry,
   getCodeownersFilePath,
-} from './lib/codeowners';
-import { paths } from 'helpers/paths';
-import { version } from 'helpers/version';
-import { Task, templatingTask } from 'helpers/tasks';
+} from 'lib/codeowners';
+import { paths } from 'lib/paths';
+import { version } from 'lib/version';
+import { Task, templatingTask } from 'lib/tasks';
 const exec = promisify(execCb);
 
 async function checkExists(rootDir: string, id: string) {
diff --git a/packages/cli/src/commands/lint.ts b/packages/cli/src/commands/lint.ts
index d1b5a361a4..2d74b4122f 100644
--- a/packages/cli/src/commands/lint.ts
+++ b/packages/cli/src/commands/lint.ts
@@ -15,7 +15,7 @@
  */
 
 import { Command } from 'commander';
-import { run } from 'helpers/run';
+import { run } from 'lib/run';
 
 export default async (cmd: Command) => {
   const args = ['lint', '--max-warnings=0', '--format=codeframe'];
diff --git a/packages/cli/src/commands/plugin/build.ts b/packages/cli/src/commands/plugin/build.ts
index 9be71c5e5b..aedf39e5b4 100644
--- a/packages/cli/src/commands/plugin/build.ts
+++ b/packages/cli/src/commands/plugin/build.ts
@@ -15,11 +15,11 @@
  */
 
 import { rollup, watch, OutputOptions } from 'rollup';
-import conf from './rollup.config';
 import { Command } from 'commander';
-import { withCache, getDefaultCacheOptions } from 'commands/build-cache';
-import { paths } from 'helpers/paths';
 import chalk from 'chalk';
+import { withCache, getDefaultCacheOptions } from 'lib/buildCache';
+import { paths } from 'lib/paths';
+import conf from './rollup.config';
 
 function logError(error: any) {
   console.log('');
diff --git a/packages/cli/src/commands/plugin/rollup.config.ts b/packages/cli/src/commands/plugin/rollup.config.ts
index c991fa3efb..f2c46d1976 100644
--- a/packages/cli/src/commands/plugin/rollup.config.ts
+++ b/packages/cli/src/commands/plugin/rollup.config.ts
@@ -22,7 +22,7 @@ import postcss from 'rollup-plugin-postcss';
 import imageFiles from 'rollup-plugin-image-files';
 import json from '@rollup/plugin-json';
 import { RollupWatchOptions } from 'rollup';
-import { paths } from 'helpers/paths';
+import { paths } from 'lib/paths';
 
 export default {
   input: 'src/index.ts',
diff --git a/packages/cli/src/commands/plugin/testCommand.ts b/packages/cli/src/commands/plugin/testCommand.ts
index a1c4572422..333af5494e 100644
--- a/packages/cli/src/commands/plugin/testCommand.ts
+++ b/packages/cli/src/commands/plugin/testCommand.ts
@@ -15,7 +15,7 @@
  */
 
 import { Command } from 'commander';
-import { run } from 'helpers/run';
+import { run } from 'lib/run';
 
 export default async (cmd: Command) => {
   const args = ['test'];
diff --git a/packages/cli/src/commands/remove-plugin/removePlugin.test.ts b/packages/cli/src/commands/remove-plugin/removePlugin.test.ts
index 1cd47864c6..17962d10b9 100644
--- a/packages/cli/src/commands/remove-plugin/removePlugin.test.ts
+++ b/packages/cli/src/commands/remove-plugin/removePlugin.test.ts
@@ -17,13 +17,13 @@
 import fse from 'fs-extra';
 import path from 'path';
 import os from 'os';
-import { paths } from '../../helpers/paths';
+import { paths } from 'lib/paths';
 import {
   addExportStatement,
   capitalize,
   createTemporaryPluginFolder,
 } from '../create-plugin/createPlugin';
-import { addCodeownersEntry } from '../create-plugin/lib/codeowners';
+import { addCodeownersEntry } from 'lib/codeowners';
 import {
   removeReferencesFromAppPackage,
   removeReferencesFromPluginsFile,
diff --git a/packages/cli/src/commands/remove-plugin/removePlugin.ts b/packages/cli/src/commands/remove-plugin/removePlugin.ts
index 76b8606973..1b8447fade 100644
--- a/packages/cli/src/commands/remove-plugin/removePlugin.ts
+++ b/packages/cli/src/commands/remove-plugin/removePlugin.ts
@@ -17,9 +17,9 @@ import fse from 'fs-extra';
 import path from 'path';
 import chalk from 'chalk';
 import inquirer, { Answers, Question } from 'inquirer';
-import { getCodeownersFilePath } from '../create-plugin/lib/codeowners';
-import { paths } from 'helpers/paths';
-import { Task } from 'helpers/tasks';
+import { getCodeownersFilePath } from 'lib/codeowners';
+import { paths } from 'lib/paths';
+import { Task } from 'lib/tasks';
 // import os from 'os';
 
 const BACKSTAGE = '@backstage';
diff --git a/packages/cli/src/commands/testCommand.ts b/packages/cli/src/commands/testCommand.ts
index 1a1b298b9c..0e180f614e 100644
--- a/packages/cli/src/commands/testCommand.ts
+++ b/packages/cli/src/commands/testCommand.ts
@@ -15,8 +15,8 @@
  */
 
 import { Command } from 'commander';
-import { paths } from 'helpers/paths';
-import { runCheck } from 'helpers/run';
+import { paths } from 'lib/paths';
+import { runCheck } from 'lib/run';
 
 function includesAnyOf(hayStack: string[], ...needles: string[]) {
   for (const needle of needles) {
diff --git a/packages/cli/src/commands/watch-deps/child.ts b/packages/cli/src/commands/watch-deps/child.ts
deleted file mode 100644
index a18f384538..0000000000
--- a/packages/cli/src/commands/watch-deps/child.ts
+++ /dev/null
@@ -1,38 +0,0 @@
-/*
- * Copyright 2020 Spotify AB
- *
- * Licensed under the Apache License, Version 2.0 (the "License");
- * you may not use this file except in compliance with the License.
- * You may obtain a copy of the License at
- *
- *     http://www.apache.org/licenses/LICENSE-2.0
- *
- * Unless required by applicable law or agreed to in writing, software
- * distributed under the License is distributed on an "AS IS" BASIS,
- * WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
- * See the License for the specific language governing permissions and
- * limitations under the License.
- */
-
-import { spawn } from 'child_process';
-
-import { createLogger } from './logger';
-
-export function startChild(args: string[]) {
-  const [command, ...commandArgs] = args;
-  const child = spawn(command, commandArgs, {
-    env: { FORCE_COLOR: 'true', ...process.env },
-    stdio: ['inherit', 'pipe', 'pipe'],
-    shell: true,
-  });
-
-  // We need to avoid clearing the terminal, or the build feedback of dependencies will be lost
-  const log = createLogger();
-  child.stdout!.on('data', (data: Buffer) => {
-    log.out(data.toString('utf8'));
-  });
-  child.stderr!.on('data', data => {
-    log.err(data.toString('utf8'));
-  });
-  return child;
-}
diff --git a/packages/cli/src/commands/watch-deps/index.ts b/packages/cli/src/commands/watch-deps/index.ts
index 68d2417e36..ec9e4be58f 100644
--- a/packages/cli/src/commands/watch-deps/index.ts
+++ b/packages/cli/src/commands/watch-deps/index.ts
@@ -14,71 +14,10 @@
  * limitations under the License.
  */
 
-import chalk from 'chalk';
-import fs from 'fs-extra';
-import { createLoggerFactory } from './logger';
-import { findAllDeps } from './packages';
-import { startWatcher, startPackageWatcher } from './watcher';
-import { startCompiler } from './compiler';
-import { startChild } from './child';
-import { waitForExit, run } from 'helpers/run';
-import { paths } from 'helpers/paths';
 import { Command } from 'commander';
-
-const PACKAGE_BLACKLIST = [
-  // We never want to watch for changes in the cli, but all packages will depend on it.
-  '@backstage/cli',
-];
-
-const WATCH_LOCATIONS = ['package.json', 'src', 'assets'];
-
-export type Options = {
-  build?: boolean;
-};
-
-// Start watching for dependency changes.
-// The returned promise resolves when watchers have started for all current dependencies.
-export async function watchDeps(options: Options = {}) {
-  const localPackagePath = paths.resolveTarget('package.json');
-
-  // Rotate through different prefix colors to make it easier to differenciate between different deps
-  const logFactory = createLoggerFactory([
-    chalk.yellow,
-    chalk.blue,
-    chalk.magenta,
-    chalk.green,
-    chalk.cyan,
-  ]);
-
-  // Find all direct and transitive local dependencies of the current package.
-  const packageData = await fs.readFile(localPackagePath, 'utf8');
-  const packageJson = JSON.parse(packageData);
-  const packageName = packageJson.name;
-
-  const deps = await findAllDeps(packageName, PACKAGE_BLACKLIST);
-
-  if (options.build) {
-    await run('lerna', [
-      'run',
-      '--scope',
-      packageName,
-      '--include-dependencies',
-      'build',
-    ]);
-  }
-
-  // We lazily watch all our deps, as in we don't start the actual watch compiler until a change is detected
-  const watcher = await startWatcher(deps, WATCH_LOCATIONS, pkg => {
-    startCompiler(pkg, logFactory(pkg.name)).promise.catch(error => {
-      process.stderr.write(`${error}\n`);
-    });
-  });
-
-  await startPackageWatcher(localPackagePath, async () => {
-    const newDeps = await findAllDeps(packageName, PACKAGE_BLACKLIST);
-    await watcher.update(newDeps);
-  });
-}
+import { run } from 'lib/run';
+import { createLogPipe } from 'lib/logging';
+import { watchDeps, Options } from 'lib/watchDeps';
 
 /*
  * The watch-deps command is meant to improve iteration speed while working in a large monorepo
@@ -99,6 +38,12 @@ export default async (cmd: Command, args: string[]) => {
   await watchDeps(options);
 
   if (args?.length) {
-    await waitForExit(startChild(args));
+    // Use log pipe to avoid clearing the terminal
+    const logPipe = createLogPipe();
+
+    await run(args[0], args.slice(1), {
+      stdoutLogFunc: logPipe(process.stdout),
+      stderrLogFunc: logPipe(process.stderr),
+    });
   }
 };
diff --git a/packages/cli/src/index.ts b/packages/cli/src/index.ts
index cdca2fa1ed..1c3f66bce7 100644
--- a/packages/cli/src/index.ts
+++ b/packages/cli/src/index.ts
@@ -16,8 +16,8 @@
 
 import program from 'commander';
 import chalk from 'chalk';
-import { exitWithError } from 'helpers/errors';
-import { version } from 'helpers/version';
+import { exitWithError } from 'lib/errors';
+import { version } from 'lib/version';
 
 const main = (argv: string[]) => {
   program.name('backstage-cli').version(version);
diff --git a/packages/cli/src/commands/build-cache/archive.ts b/packages/cli/src/lib/buildCache/archive.ts
similarity index 100%
rename from packages/cli/src/commands/build-cache/archive.ts
rename to packages/cli/src/lib/buildCache/archive.ts
diff --git a/packages/cli/src/commands/build-cache/cache.ts b/packages/cli/src/lib/buildCache/cache.ts
similarity index 98%
rename from packages/cli/src/commands/build-cache/cache.ts
rename to packages/cli/src/lib/buildCache/cache.ts
index 4dddaedc6f..9c73f904ab 100644
--- a/packages/cli/src/commands/build-cache/cache.ts
+++ b/packages/cli/src/lib/buildCache/cache.ts
@@ -16,11 +16,11 @@
 
 import fs from 'fs-extra';
 import { resolve as resolvePath, relative as relativePath } from 'path';
-import { runPlain, runCheck } from 'helpers/run';
+import { runPlain, runCheck } from 'lib/run';
 import { Options } from './options';
 import { extractArchive, createArchive } from './archive';
-import { paths } from 'helpers/paths';
-import { version, isDev } from 'helpers/version';
+import { paths } from 'lib/paths';
+import { version, isDev } from 'lib/version';
 
 const INFO_FILE = '.backstage-build-cache';
 
diff --git a/packages/cli/src/lib/buildCache/index.ts b/packages/cli/src/lib/buildCache/index.ts
new file mode 100644
index 0000000000..70bcbd36b8
--- /dev/null
+++ b/packages/cli/src/lib/buildCache/index.ts
@@ -0,0 +1,18 @@
+/*
+ * Copyright 2020 Spotify AB
+ *
+ * Licensed under the Apache License, Version 2.0 (the "License");
+ * you may not use this file except in compliance with the License.
+ * You may obtain a copy of the License at
+ *
+ *     http://www.apache.org/licenses/LICENSE-2.0
+ *
+ * Unless required by applicable law or agreed to in writing, software
+ * distributed under the License is distributed on an "AS IS" BASIS,
+ * WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+ * See the License for the specific language governing permissions and
+ * limitations under the License.
+ */
+
+export * from './withCache';
+export * from './options';
diff --git a/packages/cli/src/commands/build-cache/options.ts b/packages/cli/src/lib/buildCache/options.ts
similarity index 97%
rename from packages/cli/src/commands/build-cache/options.ts
rename to packages/cli/src/lib/buildCache/options.ts
index 6903c01ddf..380f84fff5 100644
--- a/packages/cli/src/commands/build-cache/options.ts
+++ b/packages/cli/src/lib/buildCache/options.ts
@@ -16,7 +16,7 @@
 
 import { resolve as resolvePath } from 'path';
 import { Command } from 'commander';
-import { paths } from 'helpers/paths';
+import { paths } from 'lib/paths';
 
 const DEFAULT_CACHE_DIR = '<repoRoot>/node_modules/.cache/backstage-builds';
 const DEFAULT_MAX_ENTRIES = 10;
diff --git a/packages/cli/src/lib/buildCache/withCache.ts b/packages/cli/src/lib/buildCache/withCache.ts
new file mode 100644
index 0000000000..d21de94865
--- /dev/null
+++ b/packages/cli/src/lib/buildCache/withCache.ts
@@ -0,0 +1,56 @@
+/*
+ * Copyright 2020 Spotify AB
+ *
+ * Licensed under the Apache License, Version 2.0 (the "License");
+ * you may not use this file except in compliance with the License.
+ * You may obtain a copy of the License at
+ *
+ *     http://www.apache.org/licenses/LICENSE-2.0
+ *
+ * Unless required by applicable law or agreed to in writing, software
+ * distributed under the License is distributed on an "AS IS" BASIS,
+ * WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+ * See the License for the specific language governing permissions and
+ * limitations under the License.
+ */
+
+import fs from 'fs-extra';
+import { Cache } from './cache';
+import { Options } from './options';
+
+function print(msg: string) {
+  process.stdout.write(`[build-cache] ${msg}\n`);
+}
+
+// Wrap a build function with a cache, which won't call the build function on cache hit
+export async function withCache(
+  options: Options,
+  buildFunc: () => Promise<void>,
+): Promise<void> {
+  const key = await Cache.readInputKey(options.inputs);
+  if (!key) {
+    print('input directory is dirty, skipping cache');
+    await fs.remove(options.output);
+    await buildFunc();
+    return;
+  }
+
+  const cache = await Cache.read(options);
+
+  const cacheResult = cache.query(key);
+  if (cacheResult.hit) {
+    if (cacheResult.copy) {
+      print('external cache hit, copying archive to output folder');
+      await cacheResult.copy(options.output);
+    } else {
+      print('cache hit, nothing to be done');
+    }
+    return;
+  }
+
+  print('cache miss, need to build');
+  await fs.remove(options.output);
+  await buildFunc();
+
+  await cacheResult.archive(options.output, options.maxCacheEntries);
+}
diff --git a/packages/cli/src/commands/create-plugin/lib/codeowners.test.ts b/packages/cli/src/lib/codeowners/codeowners.test.ts
similarity index 100%
rename from packages/cli/src/commands/create-plugin/lib/codeowners.test.ts
rename to packages/cli/src/lib/codeowners/codeowners.test.ts
diff --git a/packages/cli/src/commands/create-plugin/lib/codeowners.ts b/packages/cli/src/lib/codeowners/codeowners.ts
similarity index 100%
rename from packages/cli/src/commands/create-plugin/lib/codeowners.ts
rename to packages/cli/src/lib/codeowners/codeowners.ts
diff --git a/packages/cli/src/lib/codeowners/index.ts b/packages/cli/src/lib/codeowners/index.ts
new file mode 100644
index 0000000000..97c613488c
--- /dev/null
+++ b/packages/cli/src/lib/codeowners/index.ts
@@ -0,0 +1,17 @@
+/*
+ * Copyright 2020 Spotify AB
+ *
+ * Licensed under the Apache License, Version 2.0 (the "License");
+ * you may not use this file except in compliance with the License.
+ * You may obtain a copy of the License at
+ *
+ *     http://www.apache.org/licenses/LICENSE-2.0
+ *
+ * Unless required by applicable law or agreed to in writing, software
+ * distributed under the License is distributed on an "AS IS" BASIS,
+ * WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+ * See the License for the specific language governing permissions and
+ * limitations under the License.
+ */
+
+export * from './codeowners';
diff --git a/packages/cli/src/helpers/errors.ts b/packages/cli/src/lib/errors.ts
similarity index 100%
rename from packages/cli/src/helpers/errors.ts
rename to packages/cli/src/lib/errors.ts
diff --git a/packages/cli/src/lib/logging.ts b/packages/cli/src/lib/logging.ts
new file mode 100644
index 0000000000..ef79b34097
--- /dev/null
+++ b/packages/cli/src/lib/logging.ts
@@ -0,0 +1,58 @@
+/*
+ * Copyright 2020 Spotify AB
+ *
+ * Licensed under the Apache License, Version 2.0 (the "License");
+ * you may not use this file except in compliance with the License.
+ * You may obtain a copy of the License at
+ *
+ *     http://www.apache.org/licenses/LICENSE-2.0
+ *
+ * Unless required by applicable law or agreed to in writing, software
+ * distributed under the License is distributed on an "AS IS" BASIS,
+ * WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+ * See the License for the specific language governing permissions and
+ * limitations under the License.
+ */
+
+export type LogFunc = (data: Buffer | string) => void;
+export type LogPipe = (dst: NodeJS.WriteStream) => LogFunc;
+
+export type LogOptions = {
+  // If set, prefix each log message with this string
+  prefix?: string;
+
+  // If true, clear terminal commands will be forwarded, otherwise they are removed
+  forwardClearTerm?: boolean;
+};
+
+// Creates a log pipe that binds to a destination stream and forwards logs with optional transforms.
+// Use returned logPipe e.g. as follows: child.stdout.on('data', logPipe(process.stdout))
+export function createLogPipe(options: LogOptions = {}): LogPipe {
+  const { prefix = '', forwardClearTerm = false } = options;
+
+  return (dst: NodeJS.WriteStream) => (data: Buffer | string) => {
+    let str = typeof data === 'string' ? data : data.toString('utf8');
+
+    if (!forwardClearTerm) {
+      str = trimClearTerm(str);
+    }
+    if (prefix) {
+      str = `${prefix}${str}`;
+    }
+
+    dst.write(Buffer.from(str, 'utf8'));
+  };
+}
+
+// Wrapper around createLogPipe to avoid awkward immediate call of returned function
+export function createLogFunc(
+  dst: NodeJS.WriteStream,
+  options: LogOptions = {},
+): LogFunc {
+  return createLogPipe(options)(dst);
+}
+
+// Returns the string without terminal clear command if it was prefixed with one.
+export function trimClearTerm(msg: string): string {
+  return msg.startsWith('\x1b\x63') ? msg.slice(2) : msg;
+}
diff --git a/packages/cli/src/helpers/paths.ts b/packages/cli/src/lib/paths.ts
similarity index 100%
rename from packages/cli/src/helpers/paths.ts
rename to packages/cli/src/lib/paths.ts
diff --git a/packages/cli/src/helpers/run.ts b/packages/cli/src/lib/run.ts
similarity index 80%
rename from packages/cli/src/helpers/run.ts
rename to packages/cli/src/lib/run.ts
index cbeb2c080c..9eac69e673 100644
--- a/packages/cli/src/helpers/run.ts
+++ b/packages/cli/src/lib/run.ts
@@ -22,10 +22,15 @@ import {
 } from 'child_process';
 import { ExitCodeError } from './errors';
 import { promisify } from 'util';
+import { LogFunc } from './logging';
 const exec = promisify(execCb);
 
 type SpawnOptionsPartialEnv = Omit<SpawnOptions, 'env'> & {
   env?: Partial<NodeJS.ProcessEnv>;
+  // Pipe stdout to this log function
+  stdoutLogFunc?: LogFunc;
+  // Pipe stderr to this log function
+  stderrLogFunc?: LogFunc;
 };
 
 // Runs a child command, returning a promise that is only resolved if the child exits with code 0.
@@ -34,19 +39,33 @@ export async function run(
   args: string[] = [],
   options: SpawnOptionsPartialEnv = {},
 ) {
+  const { stdoutLogFunc, stderrLogFunc } = options;
   const env: NodeJS.ProcessEnv = {
     ...process.env,
     FORCE_COLOR: 'true',
     ...(options.env ?? {}),
   };
 
+  const stdio = [
+    'inherit',
+    stdoutLogFunc ? 'pipe' : 'inherit',
+    stderrLogFunc ? 'pipe' : 'inherit',
+  ] as ('inherit' | 'pipe')[];
+
   const child = spawn(name, args, {
-    stdio: 'inherit',
+    stdio,
     shell: true,
     ...options,
     env,
   });
 
+  if (stdoutLogFunc && child.stdout) {
+    child.stdout.on('data', stdoutLogFunc);
+  }
+  if (stderrLogFunc && child.stderr) {
+    child.stderr.on('data', stderrLogFunc);
+  }
+
   await waitForExit(child, name);
 }
 
diff --git a/packages/cli/src/helpers/tasks.test.ts b/packages/cli/src/lib/tasks.test.ts
similarity index 100%
rename from packages/cli/src/helpers/tasks.test.ts
rename to packages/cli/src/lib/tasks.test.ts
diff --git a/packages/cli/src/helpers/tasks.ts b/packages/cli/src/lib/tasks.ts
similarity index 100%
rename from packages/cli/src/helpers/tasks.ts
rename to packages/cli/src/lib/tasks.ts
diff --git a/packages/cli/src/helpers/version.ts b/packages/cli/src/lib/version.ts
similarity index 100%
rename from packages/cli/src/helpers/version.ts
rename to packages/cli/src/lib/version.ts
diff --git a/packages/cli/src/commands/watch-deps/compiler.ts b/packages/cli/src/lib/watchDeps/compiler.ts
similarity index 84%
rename from packages/cli/src/commands/watch-deps/compiler.ts
rename to packages/cli/src/lib/watchDeps/compiler.ts
index ee3ef28ae1..c8a0eb7d78 100644
--- a/packages/cli/src/commands/watch-deps/compiler.ts
+++ b/packages/cli/src/lib/watchDeps/compiler.ts
@@ -15,11 +15,11 @@
  */
 
 import { spawn } from 'child_process';
-import { Logger } from './logger';
+import { LogPipe } from 'lib/logging';
 import chalk from 'chalk';
 import { Package } from './packages';
 
-export function startCompiler(pkg: Package, log: Logger) {
+export function startCompiler(pkg: Package, logPipe: LogPipe) {
   // First we figure out which yarn script is a available, falling back to "build --watch"
   const scriptName = ['build:watch', 'watch'].find(
     script => script in pkg.scripts,
@@ -35,12 +35,9 @@ export function startCompiler(pkg: Package, log: Logger) {
   });
 
   watch.stdin.end();
-  watch.stdout!.on('data', (data: Buffer) => {
-    log.out(data.toString('utf8'));
-  });
-  watch.stderr!.on('data', data => {
-    log.err(data.toString('utf8'));
-  });
+  watch.stdout.on('data', logPipe(process.stdout));
+  const logErr = logPipe(process.stderr);
+  watch.stderr.on('data', logErr);
 
   const promise = new Promise<void>((resolve, reject) => {
     watch.on('error', error => {
@@ -50,7 +47,7 @@ export function startCompiler(pkg: Package, log: Logger) {
     watch.on('close', (code: number) => {
       if (code !== 0) {
         const msg = `Compiler exited with code ${code}`;
-        log.err(chalk.red(msg));
+        logErr(chalk.red(msg));
         reject(new Error(msg));
       } else {
         resolve();
diff --git a/packages/cli/src/lib/watchDeps/index.ts b/packages/cli/src/lib/watchDeps/index.ts
new file mode 100644
index 0000000000..a6fc92ca91
--- /dev/null
+++ b/packages/cli/src/lib/watchDeps/index.ts
@@ -0,0 +1,17 @@
+/*
+ * Copyright 2020 Spotify AB
+ *
+ * Licensed under the Apache License, Version 2.0 (the "License");
+ * you may not use this file except in compliance with the License.
+ * You may obtain a copy of the License at
+ *
+ *     http://www.apache.org/licenses/LICENSE-2.0
+ *
+ * Unless required by applicable law or agreed to in writing, software
+ * distributed under the License is distributed on an "AS IS" BASIS,
+ * WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+ * See the License for the specific language governing permissions and
+ * limitations under the License.
+ */
+
+export * from './watchDeps';
diff --git a/packages/cli/src/commands/watch-deps/logger.ts b/packages/cli/src/lib/watchDeps/logger.ts
similarity index 51%
rename from packages/cli/src/commands/watch-deps/logger.ts
rename to packages/cli/src/lib/watchDeps/logger.ts
index 7d8fae37b0..7f3862509a 100644
--- a/packages/cli/src/commands/watch-deps/logger.ts
+++ b/packages/cli/src/lib/watchDeps/logger.ts
@@ -14,33 +14,12 @@
  * limitations under the License.
  */
 
-export type Logger = {
-  out(msg: string): void;
-  err(msg: string): void;
-};
+import { createLogPipe } from 'lib/logging';
 
 export type ColorFunc = (msg: string) => string;
 
-// Logger utility that prefixes logs and removes terminal clear commands
-export function createLogger(prefix: string = ''): Logger {
-  const write = (stream: NodeJS.WriteStream, msg: string) => {
-    const noClearMsg = msg.startsWith('\x1b\x63') ? msg.slice(2) : msg;
-    const prefixedMsg = noClearMsg.trimRight().replace(/^/gm, prefix);
-    stream.write(`${prefixedMsg}\n`, 'utf8');
-  };
-
-  return {
-    out(msg: string) {
-      write(process.stdout, msg);
-    },
-    err(msg: string) {
-      write(process.stderr, msg);
-    },
-  };
-}
-
-// A factory for creating loggers that rotate between different coloring functions
-export function createLoggerFactory(colorFuncs: ColorFunc[]) {
+// A factory for creating log pipes that rotate between different coloring functions
+export function createLogPipeFactory(colorFuncs: ColorFunc[]) {
   let colorIndex = 0;
 
   return (name: string) => {
@@ -49,6 +28,6 @@ export function createLoggerFactory(colorFuncs: ColorFunc[]) {
     colorIndex = (colorIndex + 1) % colorFuncs.length;
 
     const prefix = `${colorFunc(name)}: `;
-    return createLogger(prefix);
+    return createLogPipe({ prefix });
   };
 }
diff --git a/packages/cli/src/commands/watch-deps/packages.ts b/packages/cli/src/lib/watchDeps/packages.ts
similarity index 97%
rename from packages/cli/src/commands/watch-deps/packages.ts
rename to packages/cli/src/lib/watchDeps/packages.ts
index f5744a41d4..4eee0f3069 100644
--- a/packages/cli/src/commands/watch-deps/packages.ts
+++ b/packages/cli/src/lib/watchDeps/packages.ts
@@ -14,7 +14,7 @@
  * limitations under the License.
  */
 
-import { paths } from 'helpers/paths';
+import { paths } from 'lib/paths';
 
 const LernaProject = require('@lerna/project');
 const PackageGraph = require('@lerna/package-graph');
diff --git a/packages/cli/src/lib/watchDeps/watchDeps.ts b/packages/cli/src/lib/watchDeps/watchDeps.ts
new file mode 100644
index 0000000000..e4b5d1e4b3
--- /dev/null
+++ b/packages/cli/src/lib/watchDeps/watchDeps.ts
@@ -0,0 +1,79 @@
+/*
+ * Copyright 2020 Spotify AB
+ *
+ * Licensed under the Apache License, Version 2.0 (the "License");
+ * you may not use this file except in compliance with the License.
+ * You may obtain a copy of the License at
+ *
+ *     http://www.apache.org/licenses/LICENSE-2.0
+ *
+ * Unless required by applicable law or agreed to in writing, software
+ * distributed under the License is distributed on an "AS IS" BASIS,
+ * WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+ * See the License for the specific language governing permissions and
+ * limitations under the License.
+ */
+
+import chalk from 'chalk';
+import fs from 'fs-extra';
+import { createLogPipeFactory } from './logger';
+import { findAllDeps } from './packages';
+import { startWatcher, startPackageWatcher } from './watcher';
+import { startCompiler } from './compiler';
+import { run } from 'lib/run';
+import { paths } from 'lib/paths';
+
+const PACKAGE_BLACKLIST = [
+  // We never want to watch for changes in the cli, but all packages will depend on it.
+  '@backstage/cli',
+];
+
+const WATCH_LOCATIONS = ['package.json', 'src', 'assets'];
+
+export type Options = {
+  build?: boolean;
+};
+
+// Start watching for dependency changes.
+// The returned promise resolves when watchers have started for all current dependencies.
+export async function watchDeps(options: Options = {}) {
+  const localPackagePath = paths.resolveTarget('package.json');
+
+  // Rotate through different prefix colors to make it easier to differenciate between different deps
+  const createLogPipe = createLogPipeFactory([
+    chalk.yellow,
+    chalk.blue,
+    chalk.magenta,
+    chalk.green,
+    chalk.cyan,
+  ]);
+
+  // Find all direct and transitive local dependencies of the current package.
+  const packageData = await fs.readFile(localPackagePath, 'utf8');
+  const packageJson = JSON.parse(packageData);
+  const packageName = packageJson.name;
+
+  const deps = await findAllDeps(packageName, PACKAGE_BLACKLIST);
+
+  if (options.build) {
+    await run('lerna', [
+      'run',
+      '--scope',
+      packageName,
+      '--include-dependencies',
+      'build',
+    ]);
+  }
+
+  // We lazily watch all our deps, as in we don't start the actual watch compiler until a change is detected
+  const watcher = await startWatcher(deps, WATCH_LOCATIONS, pkg => {
+    startCompiler(pkg, createLogPipe(pkg.name)).promise.catch(error => {
+      process.stderr.write(`${error}\n`);
+    });
+  });
+
+  await startPackageWatcher(localPackagePath, async () => {
+    const newDeps = await findAllDeps(packageName, PACKAGE_BLACKLIST);
+    await watcher.update(newDeps);
+  });
+}
diff --git a/packages/cli/src/commands/watch-deps/watcher.ts b/packages/cli/src/lib/watchDeps/watcher.ts
similarity index 94%
rename from packages/cli/src/commands/watch-deps/watcher.ts
rename to packages/cli/src/lib/watchDeps/watcher.ts
index 10be8cbbbc..c6c4487d0a 100644
--- a/packages/cli/src/commands/watch-deps/watcher.ts
+++ b/packages/cli/src/lib/watchDeps/watcher.ts
@@ -18,7 +18,7 @@ import { resolve as resolvePath } from 'path';
 import chalk from 'chalk';
 import chokidar from 'chokidar';
 import { Package } from './packages';
-import { createLogger } from './logger';
+import { createLogFunc } from 'lib/logging';
 
 export type Watcher = {
   update(newPackages: Package[]): Promise<void>;
@@ -36,7 +36,7 @@ export async function startWatcher(
   callback: (pkg: Package) => void,
 ): Promise<Watcher> {
   const watchedPackageLocations = new Set<string>();
-  const logger = createLogger();
+  const log = createLogFunc(process.stdout);
 
   const watchPackage = async (pkg: Package) => {
     let signalled = false;
@@ -71,7 +71,7 @@ export async function startWatcher(
         continue;
       }
 
-      logger.out(chalk.green(`Starting watch of new dependency ${pkg.name}`));
+      log(chalk.green(`Starting watch of new dependency ${pkg.name}`));
       promises.push(watchPackage(pkg));
     }