What are microservices? They're like little modular pieces of an application that can all be built, maintained, and deployed separately so that if one goes down, it doesn't bring down the whole app. A few features or sometimes or sometimes one feature of an app are all the constitute a microservice. Think of it like a single-purpose unix app.
This is an emerging pattern on cloud platforms given the occasional volatility of the shared infrastructure. Netflix uses microservices and has separate development teams for each one. CloudBees is a PaaS provider that has also embraced this pattern. Michael Neale recently gave a presentation about this (see slides below). Latency was the main concern with these services, and Neale addressed these questions saying:
"the assumption was that you would end up with a chain of remote (http?) calls with accumulated latency - but in practice the services fall out so that there aren't too many "chains" like this (so far)."