2023 Predicts Composable Applications
2023 Predicts Composable Applications
Predicts 2023:
Composable Applications
Accelerate Business
Innovation
17 January 2023
Predicts 2023: Composable Applications
Accelerate Business Innovation
Published 17 January 2023 - ID G00778690 - 19 min read
By Analyst(s): Yefim Natis, John Santoro, Jo Liversidge, Stephen White, Gregor Petri, Paul
Vincent, Anne Thomas
Initiatives: Emerging Technologies and Trends Impact on Products and Services
■ Ubiquitous, and increasingly strategic, use of APIs, especially those published for
external business access, creates a growing demand for governance in the form of
marketplaces, portals and governance extensions to other platform technologies.
Recommendations
Technology and service providers supporting emerging technologies and trends impact on
products and services should:
■ Redesign platform technologies to support the separation of roles and skills in a life
cycle of a composable application by providing integrated but separate support for
professional software engineering, business-driven application composition and
governance via a component marketplace.
By 2026, all the top 20 cloud platform and SaaS providers will offer component
marketplaces to enable customers’ composable strategies, differentiating by quality,
convenience and security.
By 2026, revenue growth at leading enterprise software providers will slow as increasing
adoption of composable application development shifts mainstream business investment
to more modular providers.
By 2024, 50% of Industry Cloud Platform providers will use composability for creation of
their vertical offerings as well as for enabling unique change-capable customer
deployments.
By 2025, 60% of the new custom business applications will be built using reusable
business services via a shared curated component catalog or marketplace.
To support the accelerating business appetite for targeted digital innovation, its
technology capabilities must become flexible and ready for fast, safe, efficient and
nuanced change. To that end, both technology providers and business users turn to
reusable and composable modularity. Technology providers and business technologists
take on complementary roles in the pipeline of digital business engineering.
The old one-way relationship of providers and users of technology must change to a
bidirectional partnership in a business-IT collaboration (see Figure 1).
In all these scenarios the business organization receives the finalized applications from
the providers and, after some cosmetic customization, deploys them to the users requiring
that they receive some dedicated training.
■ Corporate IT and business units form fusion teams to actively cooperate on the
development of relevant and changeable application assets, processes and
experiences.
■ Application and platform vendors deliver their products in a modular form designed
and packaged for composition, often using API-first design principles, essentially
serving the business as a partner development organization.
These business and technology partnerships enable the efficient and agile creation of
digital business experiences for their customers and employees by transforming
application products from fixed dedicated solutions to modular business innovation
platforms. Low-code application, process or integration platforms and other automation
tools are often used as the “last mile” composition platforms to deliver adaptive digital
business processes and experiences. Advanced API marketplaces provide governance to
assure integrity and efficiency of compositions.
Procurement of technology products will increasingly include demands for reuse and
continuous change. Product leaders should form new, more interactive relationships with
their customers by adopting composable modularity in application and platform
offerings.
Key Findings:
■ Business leaders are seeking a self-service ability to innovate with technology. Newer
applications offer published, or even productized, business APIs, in addition to the
traditional UI access. These enable faster composition of new processes and
experiences by business teams, often utilizing low-code development tools.
■ Increasing use of business APIs promotes the strategic API-first model of application
delivery and architecture (e.g., API-first digital commerce back end like
Commercetools and API products like Stripe).
■ Both API and UI access to applications are required in modern application use;
however, while UI-first has been the tradition for application delivery for decades, API-
first is just gaining traction in mainstream SaaS applications to serve the increasing
digital sophistication of the skills and use cases of modern business organizations.
Market Implications:
■ The increasing use of low-code tools to expedite the use of the new collections of
business APIs will further accelerate the market of low-code platform technologies.
Some will incorporate business API catalogs, others will rely on external catalogs or
marketplaces. The interaction between the low-code development tools and
business API marketplaces will alter the product strategies and architectures of both.
■ The growing use of applications as business API back ends will provide vendors a
new model for pricing their services. Business API access will likely turn out to be
both more flexible for the users and more profitable for the vendors than the
traditional UI-first.
Recommendations:
Related Research:
To Create a Successful API Marketplace or API-Based Ecosystem, Look Before You Leap
Strategic Planning Assumption: By 2026, all the top 20 cloud platform and SaaS
providers will offer component marketplaces to enable customers’ composable strategies,
differentiating by quality, convenience and security.
Key Findings:
Technology providers typically focus on delivering either packaged applications, the tools
to build custom applications, or a platform on which to deploy applications. Enterprises
aspiring to build composable applications need all three of these capabilities. As a result,
their challenges will shift to areas not well addressed by technology providers today:
Addressing these customer needs provides a significant opportunity for providers, but
doing so will change how they position their offerings and how they deliver them:
■ With so many available tools, content, rather than tool support, will differentiate
providers in a competitive market.
Recommendations:
Related Research:
Quick Answer: What Are the 3 Steps for a Successful API Product
Emerging Tech: How to Select a Pricing Model for APIs and API Products
Key Findings:
■ The largest enterprise software vendors prefer to sell software in a nonmodular way,
oriented to maximizing revenue, offering application suite bundles that position
value by making the total package less costly than the sum of its parts. More
modular options are offered, but typically at a significant (25% to 400%) premium.
Application suite bundles may be convenient but may not offer best-in-class
capabilities, which could be chosen a la carte if bought in a modular way.
■ Large value contracts with restricted ability to reduce or exchange products within
multiyear term contracts are an impediment to flexibility and agility, oxymoronic to
composability.
Market Implications:
■ The growing number of smaller point solution providers regularly competing for
business becomes targets for M&A by large enterprise application vendors seeking
to sustain growth rates. Large enterprises themselves will compete to purchase
niche vendors via “techquisitions,” so they are not beholden to the large players.
Recommendations:
Technology product leaders must develop closer relationships with their customers to
understand their evolving needs and capabilities. They must prepare to meet the
customers and prospects new technology adoption strategies.
Related Research:
Maverick Research: It’s Time to Fire Software Vendors With Complex Licensing!
Presentation Slides: How to Manage Software Megavendor Compliance Risks in the Age
of Composability
Quick Answer: What Makes Industry Cloud Platforms Different From Traditional Cloud
Offerings?
Strategic Planning Assumption: By 2024, 50% of Industry Cloud Platform providers will
use composability for creation of their vertical offerings as well as for enabling unique
change-capable customer deployments.
Key Findings:
■ A composition layer where PBCs and data can be orchestrated and automated
for new digital processes and experiences
Market Implications:
Recommendations:
■ Build enterprisewide understanding and support for your industry cloud platform
adoption by involving business technologists and fusion teams early in your
composability journey.
■ Develop business strategy options to match the emerging business practices for
product procurement and pricing in the composable industry cloud environments.
Related Research:
Quick Answer: What Makes Industry Cloud Platforms Different From Traditional Cloud
Offerings?
Create Differentiated Cloud Managed Services for the Banking and Investment Services
Industry
Changes and Emerging Needs Product Managers Must Address in the CIPS Market
Strategic Planning Assumption: By 2025, 60% of the new custom business applications
will be built using reusable business services via a shared curated component catalog or
marketplace.
Key Findings:
■ Business services delivered as API products and API-first SaaS are created for
business use by professional developers using API-centric back-end platforms.
These provide a ready source of reusable services for other business applications,
delivered primarily as REST APIs and accessed through conventional code,
integration tools, business process automation and low-code development suites.
Market Implications:
The increasing modularity and reusability of application services will accelerate their
commoditization and reuse, and increase their value and ROI. Expect increased framework
and platform support for enterprise applications, packaged business processes, API
products and SaaS services.
Additional platform focus will also be given to the creation of these services, and this is
already indicated through wide back-end framework adoption and the appearance of low-
code service creation tools such as business process automation vendors creating API
services.
Additionally, low-code development tools such as LCAP, iPaaS, RPA and BPA platforms
will accelerate their catalog and marketplace support leading to partnerships between
services and development tools, as well as the continued growth of SaaS as a Platform
vendors such as Microsoft, Salesforce, SAP and ServiceNow.
Recommendations:
Technology product leaders must develop a closer understanding of the evolving needs
and capabilities of their customers and partners. The increasing practice of application
composition will demand from most technology providers’ participation through
marketplaces and compatible development, composition and automation tools.
■ Invest your enterprise architecture team to catalog and map your business
capabilities in terms of existing services and capabilities, enabling you to
understand the gaps and opportunities for reuse of services across the business.
■ Promote the catalog curator role to encourage API consumption and composability.
This role can be recruited from your enterprise architects, API product managers and
service owners.
■ Ensure that any vendor selection for low-code tooling assesses the ecosystem
aspects of catalog performance and ease of maintenance. This could include data
fabric support for data abstraction from disparate services.
Related Research:
To Create a Successful API Marketplace or API-Based Ecosystem, Look Before You Leap
Case Study: A Business “Middle Platform” Helps Achieve Composability and Digital
Success
Quick Answer: What Makes Industry Cloud Platforms Different From Traditional Cloud
Offerings?
Harness the Disruptive Powers of Low-Code: A Gartner Trend Insight Report
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