Microservices Architecture Market

Market Overview

The global microservices architecture market size was valued at USD 4.10 billion in 2022. It is estimated to reach USD 18.46 billion by 2031, growing at a CAGR of 18.2% during the forecast period (2023–2031). 

The rise of the Internet of Things (IoT) adoption has significantly impacted the adoption of connected devices in numerous organizations. Technologies are transforming the conventional workflow of organizations, allowing them to become digital workflow networks, driving the market.

Microservices design is a style of architecture that builds an application as a group of small, independent services that are only slightly connected. This approach divides an application into multiple smaller services, each responsible for a specific business capability or functionality. These services are designed to be highly cohesive and independent and can be developed, deployed, and scaled individually. The key principle behind microservices architecture is the separation of concerns. Each microservice focuses on a specific business capability and is responsible for performing a well-defined task.

One of the advantages of microservices architecture is its ability to enable continuous delivery and deployment. Since each service is decoupled from others, updates or changes to one service can be made without affecting the entire system. This allows for faster and more frequent deployments, reducing the time to market for new features or updates. Another benefit of microservices architecture is improved fault isolation. Since services are independent, a failure in one service does not bring down the entire application. Faults are isolated to individual services, making identifying and fixing issues easier without affecting the overall system's stability.

Market Dynamics

Global Market Drivers

Digital Transformations

Emerging and developing technologies such as Big Data (analytics), social business, cloud, cognitive computing, mobility, and the Internet of Things (IoT) provide numerous opportunities. This is attributed to the fact that these technologies are transforming the conventional workflow of organizations, allowing them to become digital workflow networks. Moreover, such quick digitization has led to a major change in customer expectations across numerous industries. The rise in competition from start-ups is increasing customer expectations, so it has become crucial for organizations to change how they deliver their services and operate their business with customers. Microservices make integration much simpler and secure and help organizations build a transformation strategy to meet customer expectations, driving the adoption of microservices architecture among numerous industries.

Proliferation of Connected Devices

The rise of the Internet of Things (IoT) adoption has significantly impacted the adoption of connected devices in numerous organizations. For instance, according to a survey by GSM Association’s Connected Life, by the end of 2020, it is estimated that around 24 billion connected devices will be in use. In addition, according to Cisco’s recent Internet of Everything prediction, over 37 billion intelligent things will be connected to the Internet, like smartphones, appliances, tablets, cars, and sensors. Moreover, these devices involve various complexities, from communication and cooperation to application. Thus, with an increase in the deployment of microservice architecture and its distributed approach, such complexities are anticipated to reduce significantly, which will drive market growth during the forecast period.

Global Market Restraints

Security and Compliance Issues with the Implementation of Microservice Architecture

In the recent past, there has been improvement in overall microservices infrastructure security. However, microservices still face several challenges which impact the work of architects and developers. Moreover, microservices can get compromised due to numerous Application Programming Interfaces (API) and network connection security. In addition, improper designing of microservice architecture can lead to multiple vulnerabilities, owing to the uniform replicable nature of containers. Thus, all these factors together are expected to hamper the growth of the microservice architecture market.

Global Market Opportunities

Increase in Adoption of Virtualized Infrastructure

The market for the virtualization of servers has witnessed significant growth in the recent past. This is majorly attributed to the economical maintenance and infrastructural cost associated with the servers. Moreover, an increase in investments in virtual infrastructure by multiple organizations has boosted the growth of the global market. In addition, numerous cloud service providers use virtual machines (VMs) for their infrastructure-as-a-service (IaaS) offerings.

Furthermore, the virtualization of servers divides a server into slots for various users using virtual machines (VMs). Virtualization infrastructure is a mature and well-established technology that most enterprises are investing in. In addition, several cloud providers use virtual machines as the basis for their infrastructure-as-a-service (IaaS) offerings. An ideal way for running a microservices application architecture is application containers. Containers contain a lightweight runtime environment for the application, providing a consistent software system that can run containers on physical or virtual machines. Thus, a major shift toward virtualized infrastructure is expected to increase the adoption of microservice architecture.

Regional Analysis

North America Dominates the Global Market

Based on region, the global microservices architecture market is bifurcated into North America, Europe, Asia-Pacific, Latin America, and the Middle East and Africa.

North America is the most significant global microservices architecture market shareholder and is estimated to grow at a CAGR of 15.9% over the forecast period. North America's global market is analyzed across the U.S. and Canada. North America dominated the global microservice architecture market in 2022 and is forecasted to remain dominant during the anticipated period. The presence of major market players such as Microsoft, IBM, and Cisco and the increase in the adoption of microservice architecture solutions among users are the major factors contributing to the growth in this region.

Moreover, numerous companies in this region are expanding their business offerings by entering into strategic partnerships, agreements, and collaborations. For instance, in July 2019, IBM and Cisco announced a partnership to enhance application modernization through microservice applications for their customers. The U.S. accounted for about 84.65% share of the global market in 2018 and is expected to account for 80.64% in 2026. Canada accounted for about 15.35% share of the global microservices architecture marketing in 2018 and is expected to account for a 19.36% share in 2026 at a CAGR of 19.7%.

Europe is anticipated to exhibit a CAGR of 17.5% over the forecast period. The microservice architecture market in Europe is analyzed across the UK, Germany, France, Italy, and the rest of Europe. The presence of prominent telecommunication and IT corporations is expected to grow this region's microservice architecture market. In addition, a surge in the adoption of DevOps and cloud solutions is anticipated to boost the growth of the market in this region.

Moreover, DevOps combined with microservices architecture enables faster management of performance metrics, technology standards, and stack control and empowers innovation for IT teams. Furthermore, an increase in the adoption of SaaS solutions by various organizations that depend on the internet and routed networks to conduct essential business operations is forecasted to drive the demand for microservice architecture in this region.

The Asia-Pacific market is analyzed across China, Japan, India, Australia, and the rest of Asia-Pacific. The surge in the penetration of smartphones and the increase in netizens are the major factors contributing to market growth in this region. In addition, the increase in the need to meet the requirements of modern application development fuels the demand for microservice architecture in Asia-Pacific. Moreover, the surge in demand from organizations to secure and simplify their business information and processes drives the demand for microservice architecture in the region.

The global market in LAMEA is analyzed across Latin America, the Middle East and Africa. Rapid innovation in the mobile ecosystem due to the development of new technologies, applications, use cases, and services is driving the microservices architecture market growth in this region. In addition, an increase in penetration of Internet of Things (IoT) applications and other related infrastructures, such as artificial intelligence and machine learning mobile operators, is expected to fuel the demand for microservice architecture solutions in this region.

Segmental Analysis

The global microservices architecture market is bifurcated into components, deployment types, organization size, and industry verticals.

Based on components, the global market is bifurcated into solutions and services.

The solution segment dominates the global market and is projected to exhibit a CAGR of 17.2% over the forecast period. The solution segment of the microservice architecture market comprises platforms, tools, and on-premises and cloud-based software. The increase in need among enterprises and numerous industry verticals to enhance their business agility is the key factor fueling the demand for microservices architecture solutions.

In addition, several organizations are demanding a tool to integrate with their existing cloud solutions to unify their business processes on a single platform, which drives the market's growth. Moreover, the surge in demand for microservices architecture solutions among organizations due to increased pressure from customers for faster delivery of applications by avoiding unnecessary delays significantly contributes toward the segment's growth.

Based on deployment type, the global market is bifurcated into on-premises and cloud.

The on-premises segment dominates the global market and is projected to exhibit a CAGR of 16.1% over the forecast period. The on-premises infrastructure has been the dominant enterprise computing model for many years. In this infrastructure, organizations maintain their equipment and software in a captive data center with complete control over scheduling, administration, processing, and maintenance. The cost and significant capital expense of building and maintaining on-premises infrastructure encourage organizations to shift their workloads to more flexible cloud options.

Despite that, adopting on-premises microservices architecture is expected to remain high, as legacy equipment and applications may be incompatible with a cloud environment. Thus, organizations that want to protect software and hardware investments may maintain on-premises investments until depreciation cycles have run their course and applications can be redeveloped.

Based on organization size, the global market is bifurcated into large enterprises and small and medium enterprises.

The large enterprises segment dominates the global market and is projected to exhibit a CAGR of 17.5% over the forecast period. Large enterprises considered in the microservice architecture market are those with more than 250 employees and have revenue of more than $1 billion. Thus, large organizations are adopting microservice architecture to improve their business outcomes. In addition, a smaller codebase associated with microservice architecture empowers faster and easier maintenance, reducing development time and effort and increasing an organization's total productivity. Hence, all these factors together are expected to fuel the market growth.

Based on industry verticals, the global market is bifurcated into BFSI, manufacturing, retail and e-commerce, IT and telecom, healthcare, government, and others.

The BFSI segment dominates the global market and is projected to exhibit a CAGR of 14.9% over the forecast period. The BFSI industry includes numerous banks, such as private banks, public banks, insurance companies, and other financial institutions. The banking and financial sector has become digital recently and needs to become agile with rapidly evolving technologies. However, microservices architecture helps banking, insurance, and financial institutions to overcome such challenges. In addition, banking administrators are adopting innovative and easily deployable solutions and services owing to increased competition in the market.

Moreover, some banking and financial service providers are creating tough competition in the market by innovating payment mechanisms through open APIs, transaction initiation, and customer information sharing. Furthermore, the increase in the need to provide customers with new services and products is boosting the demand for microservices architecture among banking and financial institutions.

Recent Developments

• June 2023- Google Cloud announced the general availability of its Microservices Starter Kit, a collection of tools and resources to help developers get started with microservices architecture.
• June 2023- Amazon Web Services announced the launch of its new Microservices on AWS service, which provides a fully managed platform for building and deploying microservices applications.