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.

A 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—from various industries, company sizes, and roles—the 2020 State of Application Services Report uncovered five key trends shaping the application landscape.

1. Every company is undergoing a digital transformation

Having 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—which the report classifies as phase one of digital transformation.

Moving 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—like productivity and operational apps—are vital to digitizing business processes.

Modern, 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.

2. Organizations struggle to secure multi-cloud environments

Every 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.