Choosing between monolithic and microservices architecture is more than a technical decision – it’s a strategic one. This is the case where the size really matters. The size of your company, of course.
This article compares monolithic and microservices architectures, focusing on implementations in specific industries like healthcare, finance, marketplaces, edtech, and travel. Along the way, we’ll share key considerations to guide your decision-making process. By exploring their unique advantages, challenges, and real-world applications, we’ll help you uncover which approach best aligns with your business needs.
Understanding microservices & monolithic architecture
Imagine a busy restaurant with one chef handling every dish. This works well when the restaurant is small, but as demand grows, the chef gets overwhelmed, causing delays. Similarly, monolithic architecture is a unified codebase where all components are tightly interconnected. It’s simple and efficient for smaller systems but struggles to scale as complexity increases. Monolithic systems are rooted in the client-server architecture, which has long been the backbone of network computing models. Understanding the advantages and disadvantages of the network computing model can provide you with deeper insights into why some businesses opt for a unified, monolithic approach.
In contrast, microservices architecture is like running a restaurant with a specialized team of chefs — one for appetizers, one for entrees, and another for desserts. They operate independently but communicate to ensure every meal is complete. If the demand for desserts skyrockets, you can simply add more pastry chefs without disrupting the other stations. In the same way, microservices architecture breaks an application into smaller, independent services, each focused on a specific function. These services communicate through APIs, making it easier to update, scale, or replace individual parts without affecting the entire system.
Microservices vs. monolithic architectures in various industries
Microservices architecture remains a trend and the most widely adopted architecture. According to Statista, as of 2024, approximately 89% of organizations adopted microservices as their preferred architectural style. Meanwhile, around 20% of companies continue to rely on monolithic architecture, placing it third in popularity after service-oriented architecture (SOA), which holds a 35% share. Below, we explore examples from various industries to understand when and which architecture is the best fit for specific business needs.
Financial services & banking
The fintech industry often faces challenges like handling high transaction volumes (just in 2023, the global financial system managed 3.4 trillion transactions), real-time processing, compliance with strict regulations like GDPR and PCI-DSS, and addressing cybersecurity threats.
Monolithic architectures can serve well in small-scale or legacy banking systems. These systems are stable, centralized, and easier to maintain — for instance, core banking systems in traditional institutions that have operated for decades with little need for adaptation. However, they lack scalability and flexibility, especially during market fluctuations or sudden shifts like new fintech trends. For instance, American Zions Bank focused on modernizing legacy components through incremental upgrades rather than fully replacing its core system with microservices. It uses a component-based strategy to replace systems step-by-step while maintaining much of its legacy systems’ monolithic design.
Microservices are better suited for payment gateways, fraud detection, and blockchain. They offer modularity for faster deployment, seamless scaling, and easy integration of tools like AI-driven fraud detection. Their resilience ensures that if one service fails, it impacts only that part, not the entire system. Recently, Square Payroll transitioned from a monolithic architecture to a serverless microservices model, which reduced system complexity, improved scalability, enhanced fault tolerance, and increased transparency in workflows.
EdTech industry
According to Statista, the number of users in the online education market is projected to reach 1.12 billion by 2029, which means the EdTech industry has been growing at an unprecedented pace. That leads us to a high demand for online learning platforms, personalized education experiences, and scalable solutions to cater to millions (and soon billions) of users worldwide. However, the growth means handling high traffic during peak usage times, ensuring data security for student information, integrating with third-party educational tools, and providing a seamless user experience across devices.
Smaller EdTech startups, usually with a limited user base, benefit from a monolithic approach. For instance, a private tutoring company with an online portal for a few hundred students might use a monolithic system to handle student registrations, course access, and payment processing in a single application. Its simplicity and lower upfront cost make it ideal for organizations just starting out.
For large-scale platforms like Coursera or Udemy, microservices are essential to meet the demands of millions of learners across the globe. Each service — such as video streaming, user authentication, course recommendations, and certification management – operates independently, ensuring high availability and scalability. For instance, when Khan Academy expanded to serve over 18 million learners per month, Khan Academy transitioned to a microservices-based architecture to improve scalability. This allowed them to handle traffic surges during school closures while maintaining a high-quality user experience. Each module — such as progress tracking, content delivery, and user authentication — is independently managed, ensuring uninterrupted service even during peak demand.
Healthcare industry
Often, healthcare companies need to ensure data privacy and regulatory compliance with laws like HIPAA, scale systems to support growing patient volumes and manage complex workflows across departments. Moreover, modern healthcare providers must keep up with the times by delivering seamless digital experiences, such as telehealth platforms, patient portals, and integration with wearable health devices, to improve patient outcomes and satisfaction. These advancements often leverage the three-layer architecture of the Internet of Things, which includes perception, network, and application layers.
Monolithic architecture suits smaller healthcare providers, like local clinics or dentist offices, with limited IT needs. It simplifies patient scheduling, billing, and basic records in a single platform, offering easy maintenance and stability.
In contrast, larger hospitals and health tech innovators benefit from microservices. This modular approach supports scalability, specialized workflows, and seamless integration with tools like EHRs, medical imaging, and AI diagnostics. For example, one service handles secure patient data, while another powers telehealth, enabling advanced features like wearable device integration for comprehensive care.
Marketplace industry
Marketplaces rely on dynamic features like user interfaces and payment systems. Monolithic architectures suit smaller marketplaces or MVPs due to their simplicity and cost-efficiency but struggle with scalability, bottlenecks, and system-wide failures — challenges eBay experienced before transitioning to a more scalable architecture.
Microservices split functionalities into independent services, enabling marketplaces to scale, adapt quickly, and minimize disruptions — vital for global players like Amazon, which, in 2023, fulfilled approximately 5.9 billion delivery orders in the U.S., averaging about 16.16 million orders per day, which is over 673,500 orders every hour. While highly scalable, microservices add complexity and demand strong DevOps and planning to manage higher costs.
Travel industry
Traditionally, many travel companies operated on monolithic systems, where all functionalities – such as booking engines, payment processing, and user management — were intertwined within a single codebase. This unified approach often led to challenges in scaling services and implementing updates, as modifications required redeploying the entire system. For instance, International Travel Services (ITS) faced difficulties with its monolithic architecture, which became complex and hard to scale as demand grew, leading to slower deployment cycles.
Microservices let travel companies break platforms into independent services, enabling updates or scaling without disrupting the system. For example, Spotnana, a corporate travel platform, uses microservices to offer flexible and scalable technology, resulting in faster development cycles and continuous releases that enhance UX. Similarly, ITS transitioned to a microservices architecture to improve its air travel search engine.
Kitrum’s tips on your architecture strategy
Choosing the right architecture — monolithic or microservices — will impact your business’s success overall. At Kitrum, we’ve helped businesses across various industries navigate this decision, and we’re here to share key insights to guide your architecture strategy.
- Understand your scalability needs: Monolithic architecture can be a practical starting point for businesses in their early stages or with predictable growth. Opt for microservices if scaling specific components is key;
- Evaluate your budget and team expertise: A monolithic approach is cheaper for companies with limited resources or smaller IT teams. If your team has experience with DevOps, distributed systems, and cloud-native tools – microservices unlock long-term cost savings and agility.
- Prioritize compliance and security: Monolithic systems are easier to centralize for compliance, making them a good fit for industries like healthcare and finance with stringent data privacy requirements. Microservices allow tailored security measures for each service but require meticulous coordination to meet overall compliance standards.
- Consider integration demands: If your business relies on integrating with multiple third-party tools – such as payment gateways, CRM platforms, or analytics software – microservices architecture excels at building seamless API-driven connections.
- Assess deployment requirements: For industries with rapid innovation cycles, such as edtech or fintech, microservices allow teams to update and deploy features independently without disrupting the entire platform. Monolithic systems are better suited to businesses with stable products and infrequent update needs.
At Kitrum, we’re ready to help you analyze your business needs, implement the right strategy, and build systems that grow with your success. Let’s craft the perfect architecture together!
