Why Companies Are Moving from Microservices Back to Modular Monoliths

For years, microservices were treated like the final destination of software architecture.

If your application was growing, the advice was simple:

Break the monolith.
Move to microservices.
Scale endlessly.

But something unexpected is happening in 2026.

Experienced teams — including large tech companies — are quietly asking a different question:

Did we move to microservices too early… or without enough reason?

Even more surprising, some teams are not just going back to monoliths — they’re choosing something more intentional:

The Modular Monolith.

Let’s unpack why this shift is happening, what a modular monolith actually is, and whether microservices were ever meant to be the default choice.

The Original Problem with Monoliths

Traditional monoliths had real issues.

As applications grew:

Codebases became tightly coupled
Small changes required full redeployments
Teams blocked each other
One bug could affect the entire system

This pain pushed the industry toward microservices, where:

Each service could be deployed independently
Teams could work autonomously
Systems could scale horizontally

And for some companies, this worked beautifully.

But only under very specific conditions.

The Microservices Reality Nobody Talks About

Microservices solve some problems — but they introduce new ones.

As teams gained real-world experience, several cracks started showing.

1. Operational Complexity Explodes

With microservices, you don’t manage one system — you manage dozens or hundreds.

That means:

Multiple deployments
Service discovery
Distributed logging
Distributed tracing
Network failures
Version compatibility

Instead of writing product features, teams spend time keeping the system alive.

Many engineers describe this as “death by infrastructure.”

2. Performance Takes a Hit

Every microservice call:

Goes over the network
Requires serialization
Adds latency
Increases failure points

What used to be a simple in-memory function call becomes:

Service A → Network → Service B → Network → Service C

At scale, this adds up — fast.

3. Development Speed Slows Down

Ironically, microservices often reduce developer velocity.

Why?

One change may require updating multiple services
Shared libraries must be versioned and redeployed everywhere
Local development becomes harder
Testing becomes fragmented

Several teams reported spending more time coordinating changes than building features.

4. Cost Increases (Sometimes Massively)

More services = more:

Containers
Servers
API calls
Observability tools
Cloud bills

A famous example is Amazon Prime Video’s internal monitoring system, where a distributed microservice-based workflow was later redesigned into a single service, reducing costs by over 90%.

That moment forced many engineers to rethink architectural assumptions.

So… Were Microservices a Mistake?

No.

But they were overused.

Microservices work best when:

You have large, independent teams
You need independent scaling
You accept operational overhead
Your domain is extremely complex

For many companies — especially startups and mid-sized teams — this was never the case.

And that’s where Modular Monoliths come in.

What Is a Modular Monolith?

A modular monolith is:

A single deployable application, internally structured into well-defined, independent modules.

Key characteristics:

One codebase
One deployment unit
Clear module boundaries
Strong separation of concerns
Minimal coupling between modules

Think of it as:

Microservice discipline without microservice distribution

Modular Monolith vs Traditional Monolith

Traditional Monolith	Modular Monolith
Tightly coupled code	Strong module boundaries
No clear ownership	Clear responsibility per module
Hard to change	Easier to evolve
Grows into a mess	Enforced structure

A modular monolith is intentional, not accidental.

Modular Monolith vs Microservices

Aspect	Microservices	Modular Monolith
Deployment	Multiple	Single
Communication	Network calls	In-process
Latency	Higher	Lower
Cost	Higher	Lower
Complexity	Very high	Controlled
Scaling	Fine-grained	Coarse-grained

For many teams, modular monoliths hit the sweet spot.

Why Companies Are Choosing Modular Monoliths in 2026

1. Simpler Systems Are Easier to Maintain

A single deployable system:

Is easier to debug
Is easier to monitor
Has fewer failure points

When things break, engineers can reason about the system without tracing 15 services.

2. Better Performance by Default

Modules communicate via:

Function calls
Shared memory
Direct method invocation

No serialization.
No network latency.

This alone makes modular monoliths attractive for performance-critical systems.

3. Faster Development and Fewer Blockers

One repository means:

Easier refactoring
Easier testing
Easier dependency upgrades

Teams regain focus on product development, not infrastructure survival.

4. Lower Cloud and Infrastructure Cost

Fewer services mean:

Fewer servers
Fewer containers
Fewer managed services

This matters more than ever as cloud costs rise.

5. A Safer Path to Microservices (If Needed)

A modular monolith doesn’t lock you in.

If a module:

Becomes too large
Needs independent scaling
Requires isolation

You can extract it later as a microservice.

This makes the modular monolith a starting point, not a dead end.

Real-World Examples

Amazon Prime Video (Internal Systems)

Amazon did not abandon microservices entirely.

But for specific internal workflows, Prime Video engineers:

Replaced distributed microservices
Built a single-service architecture
Achieved massive cost and performance improvements

This case made waves because it came from Amazon itself — a company known for pioneering microservices.

Segment (Twilio)

Segment originally split its system into 100+ microservices.

Over time:

Operational overhead grew
Deployments slowed
Shared changes became painful

They later merged many services back into a monolithic architecture, dramatically improving developer productivity and system stability.

The Silent Majority

Many companies don’t publish blog posts — but the pattern is visible:

Startups delaying microservices
Teams consolidating services
Architects favoring modular designs first

The industry is learning from experience.

Should You Use Microservices or a Modular Monolith?

Ask yourself honestly:

Choose Modular Monolith if:

You’re a small or medium team
You want speed and simplicity
You don’t need independent scaling yet
You want to reduce cost and complexity

Choose Microservices if:

You have large, autonomous teams
You need independent deployments
You accept operational overhead
Your system truly demands it

Microservices should be a deliberate decision — not a default one.

Common Mistake Developers Make

The biggest mistake?

Choosing architecture based on hype instead of context.

A bad monolith won’t be fixed by microservices.
A messy codebase won’t become clean just because it’s distributed.

Structure matters more than scale.

FAQs

Is modular monolith just a fancy name for monolith?
No. A modular monolith enforces strict internal boundaries, unlike traditional monoliths.

Are microservices dead in 2026?
No. They’re just no longer the default solution.

Can a modular monolith scale?
Yes. Many large systems scale successfully with modular monoliths.

Can I move from modular monolith to microservices later?
Yes — that’s one of its biggest advantages.

What should beginners learn first?
Learn modular design and clean architecture before worrying about microservices.

Final Thoughts

The industry isn’t going backward.

It’s growing up.

In 2026, the smartest teams are choosing:

Fewer moving parts
Clear boundaries
Intentional complexity

For many, that means starting with a Modular Monolith — and earning the right to use microservices later.

Sometimes, the most scalable decision…
is choosing less architecture, not more.

If you're a fresher or want to make your career in web development, read this blog Want to Start a Career as a Web Developer in 2026.