The monolithic architecture is a single codebase that builds an application, with tightly coupled functions, designed mainly for enterprise applications on laptops and desktops. It has three divisions: business layer, database layer, and presentation layer, all acting in isolation from each other, requiring updates to the entire application when changes are made. This architecture is being replaced by microservices due to its limitations such as scalability issues, difficulty in continuous deployment, and slower performance with growing size. Microservices, on the other hand, divide functionalities into smaller units called services, which communicate among themselves through APIs, allowing for easier development, scaling, and integration of new technologies. While monolithic architecture is easier to develop due to a single codebase, microservices are more suitable for businesses that need to bridge gaps between different processes and remove data silos, making them faster and more agile.