Microservices improve software architecture by breaking down applications into smaller, independent components that can be developed, deployed, and scaled individually. This architecture allows for better agility and flexibility in development, enabling teams to implement updates faster without affecting the entire system. Each microservice can use its own technology stack, promoting optimal performance and easier integration of new technologies. Moreover, microservices enhance system resilience; if one service fails, it doesn't take down the whole application, improving overall application reliability.