One Year Into the Pandemic: 51% of Tech Leaders Give Companies Lagging in Digital Innovation Only Three Years or Less to Live, a 14% Jump from the Prior Year

- Second Annual Kong Survey Reveals 89% of Respondents Believe Creating New Digital Experiences to Address COVID-19 Challenges Is Critical for Their Business

- Tech Leaders Not Willing to Forsake Quality for Speed; Application Security and Performance More Important Than Reducing Costs and Time to Market

News provided by

Kong Inc.

Jan 21, 2021, 08:23 ET

SAN FRANCISCO, Jan. 21, 2021 /PRNewswire/ -- One year into the COVID-19 pandemic, new research from Kong Inc. shows the importance of digital innovation has dramatically increased. According to the 2021 Digital Innovation Benchmark report, 51% of technology leaders expect a business to go under or be acquired by 2024 if they lag in digital innovation, up from 37% in Kong's inaugural 2020 report. A shocking 84% predict this dire outcome within six years.

One year into the COVID-19 pandemic, new research from Kong Inc. shows the importance of digital innovation has dramatically increased. According to the 2021 Digital Innovation Benchmark report, 51% of technology leaders expect a business to go under or be acquired by 2024 if they lag in digital innovation, up from 37% in Kong's inaugural 2020 report.

New research from Kong Inc. shows the importance of digital innovation has dramatically increased.

Sixty-two percent of technology leaders across industries believe competitors could displace them by being quicker to innovate, up from 57% in the prior year. The survey of 400 technology leaders benchmarks the use of modern software architectures to enable business agility and compares how they are being used at organizations with 1,000+ employees. This year's research also explores the role the COVID-19 pandemic is having on digital transformation plans and technology budgets. To download the full report, visit https://konghq.com/resources/digital-innovation-benchmark-2021/.

Technology leaders face immense pressure to future-proof their organizations' infrastructure so it can support the technologies, applications and business models of the future. Like last year, a large majority of these professionals (87%) say the failure to adopt microservices will hurt their company's ability to compete. In the wake of the COVID-19 pandemic, 67% 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, Microservices and Kubernetes Power Digital Innovation
Developers favor open source software and the freedom to test-drive innovative technologies that are designed for today's needs. It is no surprise that open source is prevalent among the overwhelming majority of organizations surveyed (91%). The U.S. leads in the use of open source, where 94% of technology leaders say that their organizations have been using or just started to use open source software, compared with 89% in Europe. The types of open source technologies used most include: databases (57%), infrastructure automation (47%), API design, testing and automation (46%), and API gateway (38%) and containers (38%), which are enabling technologies to develop, deploy and manage applications with distributed architectures based on microservices.

Open source service mesh is a new type of software that companies are starting to use today (20%), fueled by high enterprise adoption of microservices, and is new to Kong's research this year. The vast majority of companies (87%) are already using microservices. Thirty-three percent have transitioned entirely to distributed architectures, including microservices and serverless, with the highest adoption in France and the U.S. (40% and 39% respectively). Of those already using or planning to use microservices, the average number in production is 102 across all regions. The average is significantly higher in the U.S. than in Europe, 129 versus 74.

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

Increase security (63%)
Integrate new tech faster (59%)
Increase speed of development (57%)
Increase infrastructure flexibility (52%)

Kong's research this year also explored current and planned adoption of Kubernetes. Eighty-six percent of organizations are already using or planning to use the open source container orchestration system, with only 5% with no plans to do so in the next 12 months. This data demonstrates that Kubernetes has emerged as the standard operating environment for applications built with modern distributed architectures.

Mixed Deployment Environments Add Complexity and New Security Risks
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. Nearly half (46%) are running services on-premises that connect with services running in the cloud. Among respondents, use of Amazon Web Services (43%) has a slight lead over Microsoft Azure (42%), followed by Google Cloud Platform (35%, up from 27% the prior year). Forty-one percent of companies currently use a multi-cloud environment, defined as services running in one cloud connected with services running in another cloud.

With the diversity of applications running across heterogeneous environments, it comes as no surprise that managing APIs is a growing problem. The top challenges include securing APIs (51%), monitoring API traffic (42%), scaling APIs (39%), API performance (36%), controlling API traffic (35%) and testing (35%) APIs.

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

Security issues (37% overall)
Complexity of managing services across platforms (32%)
Connecting all services to create an end-to-end digital experience (29%)
Communication among various teams working on different microservices (26%)
Difficulty integrating existing monoliths with microservices (23%, down from 32% the prior year)

"A year into the pandemic has made it clear that 'business as usual' is a thing of the past. It's no surprise that a company's ability to digitally innovate will largely determine whether it will survive or be displaced in a few short years," said Marco Palladino, CTO and co-founder of Kong. "Our research shows that technology leaders understand that speed of innovation must also be matched with security, operational efficiency and reliability. As infrastructure and applications become more distributed and interconnected, the ability to connect and secure data as it travels across services and through clouds is vital."

COVID-19 Pandemic Accelerates Existing Trends
Technology leaders overwhelmingly agree (89%) that creating new digital experiences to address COVID-19 business challenges is a business-critical endeavor. Sixty-four percent of respondents say they will continue to pursue multi-year digital transformation initiatives. When asked about the impact the pandemic has had on their company's IT/developer budget over the last 12 months, 55% of respondents reported an increase. Twenty-seven percent of respondents in France say their budget has increased 25% or more, compared with the U.S. (21%), UK (16%) and Germany (14%).

Funding Innovation and Speed in 2021
Organizations recognize that while fast innovation is essential to stay competitive in 2021, speed cannot come at the expense of other fundamentals. When asked to rank business priorities, improve operational efficiency (39%), improve application performance/reliability (37%) and improve application security (35%) were deemed higher priorities than reduce cost (33%) and accelerate innovation (27%). The vast majority of U.S. (81%) and European (78%) companies are increasing their IT budgets in the coming year, with 21% of U.S. companies expecting their budgets to grow by 26% or more, compared with only 16% in Europe.

Resources:

For reporters interested in seeing the full data set or speaking to a Kong executive about the findings, please contact [email protected].

About the Survey
Kong engaged Vanson Bourne to field a survey of 400 senior technology decision makers in the U.S. and Europe, including CIOs, CTOs, VPs of IT, IT directors/architects and software engineers/developers from organizations across a range of industries. The survey was fielded in December 2020-January 2021, with respondents coming from a range of industries, including business and professional services; financial services; IT, technology and telecoms; manufacturing and production; and retail, distribution and transport. Vanson Bourne rigorously screened interview candidates to ensure suitability and data quality.

About Kong Inc.
Kong creates software and managed services that connect APIs and microservices natively across and within clouds, Kubernetes, data centers and more using intelligent automation. Built on an open source core, Kong's service connectivity platform enables digital innovation by allowing organizations to reliably and securely manage the full lifecycle of APIs and services for modern architectures, including microservices, serverless and service mesh. By providing developer teams with unprecedented architectural freedom, Kong accelerates innovation cycles, increases productivity, and seamlessly bridges legacy and modern systems and applications. 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.

Media Contacts:
Pauline Louie, Kong, [email protected], 4157549283
Jill Reed, Sift Communications for Kong, [email protected]

SOURCE Kong Inc.