Being able to bring the whole application up locally should be an absolute non-negotiable.
This usually doesn't work that well for larger systems with services split between multiple teams. And it's not typically the RAM/CPU limitations that are the problem, but the amount of configuration that needs to be customized (and, in some cases, data).
Sooner or later, you just start testing with the other teams' production/staging environments rather than deal with local incompatibilities.
That's probably about the time when your development pace goes downhill.
I think it's an interesting idea to consider: If some team interfaces with something outside of its control, they need to have a mock of it. That policy increases the development effort by at least a factor of two (you always have to create the mock alongside the thing), but it's just a linear increase.
Either way, once the local version exists, then the job becomes maintaining all the infrastructure that lets you bring up the pieces, populate them with reasonable state and wire them into whatever the bits are that are being actively hacked-on.