90% of Australian Companies Fear Competitive Displacement in Post-Pandemic Business Climate if Innovation Lags

SYDNEY, March 31, 2022​​ – Despite two years of heavy investment in digital transformation to survive the pandemic, the new 2022 API & Microservices Connectivity Report from Kong Inc. reveals that the pressure to innovate continues to mount for technology leaders. A surprising 90% of technology leaders fear competitive displacement if they fail to keep pace with digital innovation.  Compounding this fear is a lack of skills and talent, cited by 40% of survey respondents as a drag on innovation, when recruiting qualified developers during the ‘Great Resignation’ is more challenging than ever for organisations across industries.

According to the new research, 40% of respondents predict they will go under or be absorbed by a competitor within three years if digital innovation lags, while an overwhelming majority (78%) predict the same outcome within six years and all within 10 years. The annual survey of senior technology leaders across the U.S., Europe and Asia-Pacific benchmarks how APIs, microservices and modern software architectures enable business agility and compares how they are used at organisations with more than 1,000 employees.

“Kong’s latest API & Microservices Connectivity Report sheds critical insights into the state of business innovation and technology adoption as we enter this new post-pandemic era,” said Marco Palladino, CTO and co-founder of Kong Inc. “We are in a unique business climate today where almost every minute of our customers’ lives are digitally connected, and they expect nothing less than seamless connections and the best digital experiences possible. Businesses must make customer experiences a priority in 2022 – starting by investing in the right tech stack and empowering their developer teams to build the applications of the future.”

Technology Leaders Make Creating World-Class Digital Experiences a Top Priority

While business leaders believe they must innovate quickly to stay competitive, the speed of innovation cannot come at the expense of security, performance and reliability. When asked about their top business priorities, technology leaders most cited the need to improve application performance/reliability (48%), improve application security (42%), make it easier to adopt new technologies to bridge the transition to the future (38%) and improve developer efficiency (30%).

As they strive to accomplish their business priorities, technology teams are most commonly challenged by a lack of automation in IT that ties resources up on trivial manual tasks (40%), the complexity of using multiple technologies (38%), and reliance on legacy technologies/monolithic architectures (34%).

APIs and Modern Software Architectures Accelerate Innovation

In today’s world where digital experiences are king, a reliable, secure and scalable tech stack is the linchpin of innovation and superb customer experiences. It comes as no surprise that 90% of survey respondents believe that microservices-based applications are the future and the ability to support distributed applications is critical for success. Likewise, 86% said that organisations unable to ensure the reliability and resiliency of the APIs that connect microservices-based apps are more likely to lose market share to competitors who can.

Just over one in eight (82%) technology leaders say their organisations have either already fully transitioned to entirely distributed architectures (microservices, containers, serverless, etc.) or are currently using a mix of monolithic architectures and microservices, with 38% fully transitioned to entirely distributed software architectures. As business software architectures become more decoupled, microservices continue to grow in use. The majority of teams (64%) run 20-99 microservices in production, and over one in five (22%) teams run 100-499 microservices.

To handle microservices at scale, technology leaders are increasingly turning to service meshes as a complement to API gateways in providing reliable, secure and observable connectivity between services in distributed, cloud native environments. This year, almost one-third (32%) of respondents report already having service meshes in production. Another 44% report having service meshes in deployment, making it a vast majority of technology leaders (76%) who already have a service mesh either in production or deployment.

2022 IT Budgets and Funding Priorities: Tech Leaders Invest in Empowering Developer Teams

Providing developers with the modern technology tools they need will be a major focus for business leaders in 2022. In order to meet their business priorities and overcome their IT challenges, technology leaders plan to allocate more to their IT/developer budgets:

• 86% of respondents expect their organisations’ IT/developer budgets will increase in 2022, with a vast majority (72%) expecting it to increase by as much as 25%.
• Another 14% say their IT/developer budget will increase by 25-50%.
• 64% of respondents believe that their budgets for APIs will increase in 2022, with 32% expecting a large increase of 25% or more. In 2021, 36% of teams increased their API budgets up to 25%, and 20% increased budgets by 24% or more.

The increase in API budgets complements most teams’ priority to build or expand access to APIs. Fifty-four percent of technology leaders say that 60% or more of those current projects focus on building new APIs or expanding access to APIs. For 24% of respondents, APIs are even more crucial, with 80% or more of their current projects focused on building new APIs or expanding access to APIs.

Brad Drysdale, APJ field CTO at Kong Inc., said, “As Australian businesses enter the post-pandemic era, the pressure to innovate will continue to mount and digital transformation will accelerate. This survey suggests that IT departments will be constantly tasked with finding solutions that will enable their organisations to better understand and engage customers, while supporting innovation and reducing the time to market. Ultimately, in today’s increasingly digital world where everything is connected, digital experiences are king and customers expect nothing less than seamless experiences.”

To learn more about how businesses are using APIs, microservices, service mesh and other modern software technologies and architectures, download the full 2022 API & Microservices Connectivity Report.

Resources:

• Download the full report
• Check out an infographic highlighting report findings
• Read the blog post series
• Join the “Building a Winning Digital Experience Strategy Starts With Empowering Today's Developers” webinar on April 14 at 8:00 a.m. PT

About the Survey

Kong engaged Vanson Bourne to field a survey of 500 senior technology decision makers in the U.S., Europe (France, Germany, UK and Sweden) and Asia (Australia, Japan and Singapore), including CIOs, CTOs, VPs of IT, IT directors/architects and software engineers/developers. The survey was fielded in December 2021 and January 2022, with respondents coming from companies with more than 1,000 employees spanning 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 centres and more using intelligent automation. Built on an open source core, Kong’s service connectivity platform enables digital innovation by allowing organisations 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 konghq.com or follow @thekonginc on Twitter.