Digital transformation is a top-of-mind priority for CIOs who want innovative ways to deploy applications and run IT operations. In today's digital economy, companies that don't depend on applications to support their business are rare. On the contrary, most companies have some kind of digital transformation initiative in place, which is driving the adoption of cloud-native architectures and application services.\nA new report from application delivery vendor F5 Networks finds businesses are entering the second phase of digital transformation by automating more parts of their networks. Based on a survey of nearly 2,600 senior leaders globally\u2014from various industries, company sizes, and roles\u2014the 2020 State of Application Services Report\u00a0uncovered five key trends shaping the application landscape.\n\nREAD MORE: Top 10 underused SD-WAN features\n\n1. Every company is undergoing a digital transformation\nHaving conducted its annual survey for six years in a row, F5 consistently found IT optimization and business process optimization to be the top reported benefits for companies with digital transformation initiatives. At this point, most companies have mastered automation of individual tasks by digitizing IT and business processes\u2014which the report classifies as phase one of digital transformation.\nMoving on to phase two, companies are shifting their focus to reducing complexity and supporting apps with a consistent set of services. External-facing apps make up a portion (45%) of an average company's portfolio and help generate revenue. Yet, the internal-facing ones\u2014like productivity and operational apps\u2014are vital to digitizing business processes.\nModern, microservices\/cloud-native apps now make up approximately 15% of a company's portfolio, compared to 11% for mainframe-hosted apps. This mix of new and older generation apps indicates that businesses are dealing with a diverse app portfolio. As more businesses adopt an application-centric mindset, they can start managing their app portfolio like a business asset.\n2. Organizations struggle to secure multi-cloud environments\nEvery company has different needs, which is why most choose the best cloud for their applications on a case-by-case basis, the report finds. Businesses are adopting cloud platforms at a high rate, with 27% planning to have more than half of their applications in the cloud by the end of 2020.\nFor 87% of companies, multi-cloud is the preferred choice due to its flexibility. Multi-cloud typically includes a mix of infrastructure-as-a-service (IaaS) environments, so a company can choose to deploy multiple software-as-a-service (SaaS) or platform-as-a-service (PaaS) cloud services.\nHowever, multi-cloud environments pose challenges for businesses when it comes to maintaining security, policy, and compliance, according to the report's respondents. Companies are dealing with applications that reach hundreds to millions of end users\u2014each one with its own security risk. Meanwhile, many don't have the expertise to protect the apps.\nA whopping 71% of companies surveyed by F5 reported a skills gap in security. Only 45% of companies are confident that they're able to secure apps in the public cloud, while 62% think they can protect apps in an on-premises data center. The most confident companies have consistency across multiple architectures and multiple infrastructures, ensuring security and performance of all apps in their portfolio.\n3. Automation key to boosting efficiency\nManual processes may have been the norm for legacy networks, but modern networks require automation. That's why most companies (73%) have embraced it.\nIn this year's report, F5 observed more consistent use of automation in the deployment pipeline than in previous years. Automation of application infrastructure, network, application services, and security is nearly equal across the board at approximately 40% for survey respondents. (See also:\u00a0Enterprises being won over by speed, effectiveness of network automation)\nInterestingly, more companies are choosing open source and continuous integration\/continuous delivery (CI\/CD) tools for automation over proprietary vendor solutions. The report found there is a need for open ecosystems with the increasing use of CI\/CD tools, as businesses search for ways to address problems that slow down automation. Companies said their biggest struggles are with skill gaps in enterprise IT, integrating toolsets across vendors and devices, and the cost of new tools.\n4. Security app services are most widely deployed\nModern networks require application services\u2014a pool of services necessary to deploy, run, and secure apps across on-premises or multi-cloud environments. Today, 69% of companies are using 10 or more application services, such as ingress control and service discovery. Ingress control is a relatively new application service that has become essential to companies with high API call volumes. It's one of many examples of the growing adoption of microservices-based apps.\nSecurity services remain as the most widely deployed, with these in particular dominating the top five: SSL VPN and firewall services (81%); IPS\/IDS, antivirus, and spam mitigation (77%); load balancing and DNS (68%); web application firewalls (WAF) and DDoS protection (each at 67%).\nOver the next 12 months, the evolution of cloud and modern app architectures will continue to shape application services. At the top of the list (41%) is software-defined wide-area networking (SD-WAN). SD-WAN enables software-based provisioning from the cloud to meet modern application demands. Early SD-WAN deployments focused on replacing costly multi-protocol label switching (MPLS), but there is now greater emphasis on security as a core requirement for SD-WAN.\n5. DevOps picks up responsibility for app services\nAlthough IT operations is still primarily responsible for deploying app services, the report revealed a shift taking place from single-function to ops-oriented team structures\u2014such SecOps and DevOps.\nThe responsibility for securing, optimizing, and managing apps by DevOps teams is growing, fueled by cloud and container-native applications. Compared to just a few years ago, businesses have developed a preference for containers over virtual appliances for app services. Container preference grew from just 6% in 2017 to 18% in 2020, surpassing virtual machines (15%) and hardware (15%).\nRegardless of preference, the challenges of modern app architectures call for collaboration between teams. IT operations and DevOps don't have to be mutually exclusive and can work together to address those challenges.\nWhat's Next?\nSenior leaders surveyed in the report see big data analytics coming into play in the next two to five years.\nCompanies today only use a small portion of their data and aren't taking full advantage of it. In the third phase of the digital transformation, businesses can begin leveraging data captured by apps via artificial intelligence (AI)-powered analytics. The harnessed data can provide valuable insights to improve business processes.