Accenture Strategy

The cloud partnering proposition: APIs and microservices

April 18, 2018

RESEARCH REPORT

In brief

To partner with each other successfully, businesses need infrastructures and applications that can “talk” to each other. Application Programming Interfaces (APIs) and microservices make that happen, acting as an admission ticket to the business ecosystems fueling the digital era.
Accenture Strategy surveyed 1,100 C-Suite executives in 2017 representing 13 industries in seven countries, to explore strategic areas and opportunities where companies are harnessing technology to increase business value. One area of the research focused on the use of APIs and microservices.
Companies fall into three categories: Leaders, Strivers and Laggards, with the majority (52 percent) falling into the Striver category.

Eight out of 10 executives say platform-based business models will be core to their business strategy within three years. For a platform-based ecosystem to work, businesses must rearchitect or isolate and shrink their legacy systems in favor of lightweight architectures built on microservices and the cloud. APIs, which serve as a bridge between software components, enable them to do so.

Companies fall into three categories:

APIs are essential to the creation of microservices architectures, providing more modularity and flexibility to businesses so they can decrease time-to-market.

Until recently, companies have used APIs mainly to modernize legacy architecture. By using them increasingly to create new business models and enable new products/services, they can begin to tie APIs to business growth. Seven out of 10 companies (71 percent) say APIs are a critical piece of their technology strategy.

With the current explosion in API-related activity as companies move to the cloud and partner in ecosystems, Accenture Strategy investigated the current landscape for insights on the value APIs are bringing to businesses around the world.

What are the primary objectives for your organization’s investment in APIs?

Enabling new digital products and services

Creating new business channels

What holds companies back?

Four key obstacles challenge companies as they move to adopt APIs and head toward microservices:

Legacy systems
Lack of needed skills
Lack of budgeting/funding
Finding the right APIs for specific needs

Top obstacles:

Leaders Organizational inertia | Legacy systems | Lack of budget/funds Legacy systems | Finding the right APIs Lack of budget/funds for my specific needs

Strivers Lack of needed skills | Legacy systems | Finding the right APIs for my specific needs | Lack of budget/funding

Laggards Lack of needed skills | Finding the right APIs for my specific needs | Legacy systems | Lack of budget/funds

What leaders do differently

Leaders forge ahead despite these obstacles, using the need for innovation as a motivator. Almost half (48 percent) of Leaders agree innovation will suffer if they are not part of an ecosystem. By contrast, only 42 percent of Strivers and 38 percent of Laggards feel the same.

In addition, Leaders see IT as a partner in this innovation, viewing legacy as an inhibitor to agility and growth.

Leaders see IT as a partner in innovation.

APIs and microservices are essential to opening up the partnering growth opportunities that can distinguish your company from the pack. A few first steps are helpful:

Follow the business value trail
Prioritize moves to APIs and microservices from a business perspective, not a technology perspective. Ask yourself where your company can glean the most business value from increased partnering, and start there.

Consider microservice architectures for new in-house developed systems
Also, favor third-party software that conforms to this pattern. This will provide far more agility and flexibility in the long term than traditional applications.

Map your company’s monolithic legacy systems, to envision how they can be split—chunk by chunk—into microservices
This action takes your enterprise one step closer to the cloud infrastructure so beneficial to partnering in an ecosystem.

As businesses become increasingly digital—moving more and more of their interactions and data to the cloud—APIs and microservices will continue to proliferate. Becoming familiar—fast—with these essential technology tools will accelerate your company’s path to successful partnering.

Tech-led M&A: From art to science

James Burrows

Managing Director – Accenture Strategy, Technology Strategy

James helps clients in Capital Markets develop the technology strategies and capabilities they need to respond to digital, cost and regulatory challenges.