Enterprises are investing in next-gen application development, particularly microservices, containers, service mesh and serverless.
Enterprise adoption of cloud-native applications has quadrupled over a three-year period, according to new research from Everest Group. Standalone cloud-native initiatives jumped 2.5 times in three years. Over the same period, cloud-native engagements per enterprise nearly doubled, jumping from 4-5 to 8-9.
Enterprises’ application portfolios continue to be dominated by monolithic and legacy systems; however, new applications are increasingly being built on cloud-native principles. Everest Group asserts that enterprises need to focus their application strategy on five key tenets to ensure success with modern applications:
- Evolving the technology stack to include next generation application development concepts such as microservices, containers, service mesh orchestration and serverless
- Rethinking funding parameters to support shorter development cycles
- Managing change successfully
- Embedding security across entire application lifecycles
- Upskilling talent and targeting the right profiles when hiring
“The talent issue is becoming critical, and although we find that enterprises acknowledge the skills gap, they aren’t yet addressing the gap appropriately,” said Yugal Joshi, vice president at Everest Group. “For example, we analyzed 22,000 developer openings in the United States and found that less than 10% of job postings demand true cloud-native developer skills. Recognizing the need for new talent profiles for digital business is a good start, but to achieve results, enterprises need to target the right profiles when hiring.”
These findings and more are shared in Everest Group’s recently published report, “Cloud-native Application Services – the Cloud-native Juggernaut is Rolling; Be Mindful of Pitfalls.” The research analyzes the evolving dynamics of the cloud-native application services market, including enterprise demand themes, consumption patterns and evolving priorities. This Everest Group “State of the Market” report points to certain areas that need enterprise attention and provides key tenets responsible for the successful execution of application strategy.
Additional key findings:
- Though cloud-based applications are gaining traction across all verticals, Banking, Financial Services and Insurance (BFSI) is the leader. High growth is expected in consumer-facing verticals—especially Telecom, Media and Technology (TMT); Travel, Transportation and Logistics (TTL); and retail and consumer goods—as enterprises in these segments aim to differentiate offerings.
- Public cloud is taking the lion’s share of cloud-native business. Among hyperscalers, AWS continues to maintain a significant lead with more than 50% of engagements.
About Everest Group
Everest Group is a consulting and research firm focused on strategic IT, business services, engineering services, and sourcing. Our clients include leading global enterprises, service providers, and investors. Through our research-informed insights and deep experience, we guide clients in their journeys to achieve heightened operational and financial performance, accelerated value delivery, and high-impact business outcomes. Details and in-depth content are available at http://www.everestgrp.com/