By Kong on December 11, 2019

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Nearly Forty Percent of Public Company Technology Leaders Believe Organizations Will Fail Within Three Years if They Don’t Keep Pace with Digital Innovation

Kong Survey Reveals 84 Percent of Companies Have Adopted Microservices to Accelerate Innovation Efforts and Enhance the Ability to Compete

 

SAN FRANCISCO December 11, 2019 Kong Inc. today released findings of new research that shows a large percentage of companies in the United States have a shocking three-year window of survival if they fail at digital transformation. According to the 2020 Digital Innovation Benchmark report, nearly 40 percent (39 percent) of technology leaders at public companies expect companies to go under or be acquired by 2023 if they lag behind.

The survey of 200 technology leaders at large U.S. companies, with respondents equally divided between publicly traded and privately held companies, benchmarks the use of modern software architectures to enable business agility and compares how they are being used at the two types of organizations. To download the full report, visit https://konghq.com/resources/digital-innovation-benchmark-2020.

There is no denying that technology leaders are at the frontline of a revolution in how software is created, facing immense pressure to future-proof their organizations’ infrastructure so it can support the technologies, applications and business models of the future. The overwhelming majority of these professionals (89 percent) think the failure to adopt microservices will hurt their company’s ability to compete. Likewise, three quarters of them expect serious professional ramifications—being fired, losing out on a promotion or missing out on a bonus—for failed modernization initiatives (e.g., cloud, microservices, adopting new technologies).

Open Source is Prevalent; Most Have Migrated to Microservices Already

Busting a common misperception that public companies are less innovative in their use of technology, the survey provides evidence that this is no longer the case. Open source is prevalent among a large majority of organizations (83 percent), with public companies emerging as the biggest users (84 percent), pulling ahead of private companies (81 percent). The types of open source technologies used most include: databases (64 percent), containers (48 percent), API gateways (41 percent), infrastructure automation (40 percent) and container orchestration (37 percent).

The vast majority of companies (84 percent) are already using microservices. Thirty percent of public companies have transitioned entirely to distributed architectures, including microservices and serverless, which is slightly more than privately held companies (28 percent). Notably, 43 percent of organizations with between 3,000 to 4,999 employees are using entirely distributed architectures.

The main reasons (beyond cost) that are driving enterprises to transition to microservices include:

  • Increase security (56 percent)
  • Increase speed of development (55 percent)
  • Integrate new tech faster (53 percent)
  • Increase infrastructure flexibility (53 percent)

Of companies with over 3,000 employees that are using, or planning to use microservices, 40 percent are running 100 or more microservices. Thirteen percent of companies surveyed are running 500 or more microservices, with public companies (14 percent) edging out private companies (11 percent).

Challenges Using Distributed Applications and Architectures

The challenges of using distributed applications and architectures extend to a range of deployment options across on-premises, hybrid cloud, public cloud or multi-cloud. The survey respondents represented all major cloud providers, with Microsoft Azure (43 percent) leading by a nose, followed by Amazon Web Services and private cloud (tied at 42 percent each), and Google Cloud Platform (27 percent). More than one-fifth (21 percent) of companies currently use a multi-cloud environment. 

With the diversity of applications running across heterogeneous environments, it comes as no surprise that more than 40 percent of respondents reported having challenges with securing, scaling and/or ensuring performance for their APIs. Nearly all (90 percent) technology leaders agree that a major challenge is having a way to connect applications and services, while securing data in motion and ensuring optimum performance at massive scale.

When asked about specific challenges in using microservice-based applications, the top reasons cited include:

  • Security issues (36 percent overall, 40 percent public, 32 percent private)
  • Difficulty integrating existing monoliths with microservices (32 percent overall, 37 percent public, 26 percent private)
  • Updating API documentation (31 percent overall, 28 percent public, 33 percent private)
  • Complexity of managing services across platforms (31 percent overall, 32 percent public, 29 percent private)

“U.S. companies are facing a do or die moment when it comes to digital innovation, and most have a few short years to get it right before they fall too far behind to remain viable,” said Augusto Marietti, CEO and co-founder of Kong. “The shift to microservices is inevitable and already underway among most companies. But technology leaders are waking up to the fact that they need tools that make it easier to manage and secure distributed applications across old and new software architectures and platforms so they can focus on more strategic initiatives.” 

2020 Business Outlook and IT Investment

Organizations recognize the importance of being agile and forward-thinking in their use of technology and are making investments for this in 2020. Nearly four-fifths (78 percent) of U.S. companies are increasing their IT budget in the coming year, with one in four (27 percent) public companies expecting their budgets to grow 26 percent or more. The vast majority (87 percent) of companies will be increasing headcount – 56 percent will achieve this by hiring internally, and 31 percent will be using more freelancers and/or outsourcing to meet their hiring goals in a tight labor market.

Resources:

For reporters interested in seeing the full data set, please contact kong@siftpr.com

About the Survey 

Kong engaged Vanson Bourne to field a survey of 200 senior technology decision makers based in the United States, including CIOs, CTOs, VPs of IT, IT directors/architects and software engineers/developers from organizations, with respondents evenly divided between publicly traded and privately held companies that had 1,000 or more employees. The “2020 Digital Innovation Benchmark” survey was fielded in August 2019 and represents a range of industries, including business and professional services; financial services; IT, technology and telecoms; manufacturing and production; and retail, distribution and transport 

About Kong Inc.

Kong delivers a next-generation API and service lifecycle management platform designed for modern architectures, including microservices, containers, cloud and serverless. Offering high flexibility, scalability, speed and performance, Kong enables developers and Global 5000 enterprises to reliably secure, connect and orchestrate microservice APIs for modern applications. Kong is building the future of service control platforms to intelligently broker information across services. For more information about Kong, please visit https://konghq.com/ or follow @thekonginc on Twitter.

About Vanson Bourne

Vanson Bourne is an independent specialist in market research for the technology sector. Our reputation for robust and credible research-based analysis, is founded upon rigorous research principles and our ability to seek the opinions of senior decision makers across technical and business functions, in all business sectors and all major markets. For more information, visit www.vansonbourne.com