It’s obvious COVID–19 accelerated digital reliance for many companies. And it’s no surprise that, according to a recent study, 89% of tech leaders believe digital experiences are critical to addressing new COVID–19 challenges. In this race toward 100% digital business, agile innovation is the new elixir of life — without it, a company may face an early retirement.
Kong just released their 2021 Digital Innovation Benchmark, which summarizes the tech priorities of 400 IT leaders. The findings stress the importance of rapid digital innovation, open source, microservices architectures, and high quality practices for scaling today’s application ecosystems. Here are the key points technology leaders need to know to remain competitive.
Innovate or Dissipate
The urgency to innovate is increasing. According to the survey, 84% of respondents predict a business will go under within six years if they lag behind in digital innovation. Fifty one percent of tech leaders believe their business can only survive three years.
If digital transformation happens too slowly, it can pose an existential threat. But there are many factors that can hinder faster digital innovation; the complexity of using multiple tech stacks, reliance on legacy IT and lack of automation. Not only are there internal woes, but external danger — 62% of respondents worry about failing to keep up with competitors who innovate faster.
It seems the urgency has increased over the last year. In last year’s report, just 37% reported they’d be out of business in three years if they didn’t keep pace with digital innovation. That figure rose to a whopping 51% in 2021.
COVID Amplifies Digital Drive
Virtually no one is anticipating a decreased IT budget in light of COVID–19. On the contrary, long-term digital transformation efforts are well on target at the majority of institutions, and 75% expect to see an increase in IT/developer budgets over the next 12 months.
Interestingly, when it comes to securing the digital-only economy, European tech may have a head start. Only 40% of European tech companies have increased their security focus, compared to 51% in the U.S. This could be due to previous investment in security and stricter regulation in European countries.
In terms of cloud adoption, 40% of tech leaders feel COVID–19 has accelerated their move to the cloud. Nearly 40% say the pandemic has encouraged the use of microservices and cloud native architecture.
Quality Outweighs Speed
When gauging what matters most to tech leaders, “improving operational efficiency” is still a top priority. However, this year’s report saw a spike in respondents saying application performance and reliability, as well as application security, were moving up the priority list. Though 3 in 5 (62%) respondents said they are “extremely concerned” about competition from speedier rivals, application stability outweighs the collective drive to innovate.
These trends are likely indicative of a notable rise in cybercrime. As I’ve covered previously, to respond to emerging threats, DevSecOps practices and new security tooling are shifting left within the development cycle, automating things like vulnerability detection. Simultaneously, roles to increase application integrity, like site reliability engineers, are in high demand.
New Technologies and Open-Source Thrills
As mentioned earlier, IT budgets are increasing across the board. When adopting new technologies, companies place the highest emphasis on the tech that increases efficiency. A surge in automation follows a low-code movement gaining steam. Companies consider the following key factors when introducing new tech: reducing deployment risk, increasing collaboration, and increasing development. Ninety five percent of US respondents also listed the “need to integrate with existing tools” as necessary — no surprise in today’s API-driven development landscape.
Ninety one percent of organizations use open-source software in 2021 — this is up from 82.5% in 2020. Across the board, open-source is intrinsically embedded into most software projects. We see open-source especially used in open databases, infrastructure automation, API design and testing, CI/CD tools, Docker containers, Kubernetes and service mesh. Arguably, modern DevOps would not be possible without such open source initiatives.
Bring it on, Microservices
If you haven’t heard of microservices yet, we would be worried. An impressive 87% of survey participants believe that microservices-based applications are the future.
While that sounds substantial, a path toward 100% distributed microservices architecture has not been mapped within most organizations. In 2021, only 33% of companies have transitioned entirely to a distributed architecture, whereas most (53.5%) adopt a hybrid mix of microservice and monolithic styles.
“This is strong evidence that microservices have quickly become the de-facto approach for modern application architectures that enable digital innovation,” the report said. Though more development is required, a microservices-centric future seems obvious.
Within organizations that have already adopted a microservices approach, the average number of microservices in production is 102. And those are primarily to increase security. Ironically, the report also found maintaining security to be the top challenge of deploying a microservices system. Other drivers for microservices adoption include integrating new tech, increasing development speed and boosting flexibility.
Kubernetes Becomes Ubiquitous
Kubernetes has clearly emerged as the industry standard orchestration platform. Eighty six percentof all respondents report they now use Kubernetes in production, or plan to within 12 months. This is a massive jump from VMWare’s 2020 report, which put Kubernetes use at 48%.
However, there are challenges to implementing Kubernetes in practice. Companies cite security, complexity, performance and monitoring as top setbacks when introducing Kubernetes. To say Kubernetes has a steep learning curve may be an understatement, as abstraction layers are introduced to rectify a widening knowledge gap.
Service Mesh Prickly for Early Installs
Interestingly, API gateway adoption and container usage, according to the survey, are both 38%. Yet, service mesh adoption is only at 20%. This could underscore the fact that service mesh is still an emerging concept — service mesh experts say the tech isn’t ready for widespread adoption. Or, it could reflect that production use cases are rare (primarily for supporting vast microservices deployments).
Early service mesh adopters see increased service connectivity and discovery as a top benefit of the technology. This seems logical, as service mesh aims to be a common networking framework. Other common benefits include cost reduction, meeting compliances, zero-trust security in networking and traffic observability.
Naturally, service mesh isn’t without its thorns. Complexity in deployment and ensuring performance at scale top the list of challenges faced when deploying service mesh, slowing its adoption.
Hybrid Multicloud
The current status of multicloud deployment sees a mix of on-premises and multiple cloud providers, with 41% of organizations using multicloud deployment strategies. While cloud adoption rates are increasing, 31% of organizations are still running on-premises servers. The saturation of cloud tooling, and the market validity of Azure and Google Cloud Platform to take on AWS, have influenced a multicloud environment. Cloud expertise is now a hot commodity to navigate multicloud modalities — so much so that some companies have introduced a new role, The Other CFO, or Cloud Economist, to balance the cloud checkbook.
Riding out the Virtual Wave
The pandemic has accelerated the move toward digital experiences, and in turn, quickened the pace of enterprise technological evolution across the board. As COVID–19 effects continue, there’s no indication the virtual wave will recede anytime soon.
To summarize the current state of digital innovation:
- Rising digital tide: The pace to innovate is rising, and those left below the new-digital-normal water line will drown.
- IT spend is up: Most companies have increased IT budgets moderately to support new digital norms.
- Needs for adoption: Desires for automation, speed, security and integration rank high for adopting new tech.
- Microservices on fire: The report describes “accelerated mainstreaming of microservices.” Microservices, and the tech that supports them, are clearly the future.
- Kubernetes everywhere: As Kubernetes rises to ubiquity, last-mile efforts center on security and developer usability.
- Bullish on service mesh: Service mesh sees early production uses, which will likely signal more growth in this area.
There’s nothing unexpected in these findings; instead, they affirm what most of us already know — digital innovation is going full throttle. Check out the entire 2021 Digital Innovation Benchmark here.
