Application Modernization: A Comprehensive Guide

Digital transformation has altered the business landscape in numerous ways. It has augmented growth in the form of technological integration and the adoption of modern business practices. 

One such transformation is application modernization, which focuses on improving outdated infrastructure with the latest ones, thus improving overall business operations. Like every digital transformation, this is a complex yet necessary step.

With this guide, we aim to simplify this concept for you. Today, we will discuss everything concerning application modernization services, including the whats, whys, and hows. So, let us dive right into it.

What is Application Modernization? 

In simple terms, application or legacy modernization is updating, rehosting, repurposing, or retiring a company’s digital infrastructure with the latest technology to ensure it aligns with its objectives. 

To quote Gartner here, 

Application modernization services address the migration of legacy to new applications or platforms, including the integration of new functionality to provide the latest functions to the business.

The main purpose of application modernization services is to make the system more secure, efficient, and faster. Additionally, regular upgrading can also increase the lifespan of companies’ older resources and reduce the cost of replacing almost every digital asset. 

A broad spectrum of services, including migrating legacy systems to the cloud, DevOps integration, agile practices, etc.,  come under the umbrella of app modernization. Leading businesses have already started the modernization journey, while many others are planning how to proceed.   

According to a Markets and Markets report, the size of application modernization services is expected to grow from $15.2 billion to $32.8 billion by 2027. 

So, it is clear that application modernization will continue to maintain a stronghold in the market, not just for the present but also for the future. To support our claim, here are a few statistics and trend predictions:

• Cloud professional services market is expected to reach from $25.6 billion to $55.3 billion by 2028. Showing a massive shift from a monolithic architecture to Cloud-based applications.
• As per IDC, GenAI will reinvent legacy applications by initiating and executing 60% of code conversions and development by 2027. 
• Another IDC report claims that, by 2025, updating the legacy system will become a necessity to survive for about 60% of businesses. 

Application modernization is the next big thing that will take over the business world. However, right now, it is like an opportunity. The companies that embrace the digital shift will lead the market in the future. 

So apart from “leading the market,” why else should you invest in this modern infrastructure? 

Why Go For Application Modernization Services?

Legacy systems might feel familiar, but they can pose innumerable challenges, some of which are: 

• Outdated Interface 

Being an old technology, the legacy applications won’t have any modern integrations, which will prove to be limiting. 

• Security Issues  

In the present scenario, applications come with high-level security systems to safeguard apps from security breaches, which would be missing in legacy applications. 

• Incompatibility Issues  

Using a legacy system might also pose compatibility issues with the current resources as they are built to match the current digital landscape. 

• Slow Processes 

Working with legacy systems can get tedious and time-consuming because the technology isn’t advanced enough to provide a seamless experience. 

• Shortage of Experts  

Older the technology, the lower the chances of getting a competent individual, thus adding to the maintenance burden. Depending on the age, eventually, finding someone with a basic knowledge of the said technology won’t be possible. 

• Operational Restrictions  

Since the system would support only some of the many functionalities, it will limit the overall process. It will not be compatible with the latest or upcoming tech stack. This will further hinder the whole process. 

• Limited Services

After a point in time, manufacturers stop producing a set of technology, which means you won’t be able to receive any maintenance service from them. Going to a local service center is also an option, but eventually, even that won’t be possible because of the lack of the proper knowledge or tools. 

• Legal Issues 

Every country has some legal and compliance requirements that are updated regularly. Legacy systems might not comply with the new compliance guidance. Older systems might not comply with existing policies, which may cause legal complications. 

Many other challenges, like high maintenance, limited service availability, and more, are bound to unfold at one time or another with legacy modernization. 

Companies with legacy infrastructure start losing the competitive edge in the market, which happens much faster than anticipated in the present technologically fast-evolving space. This is why faster adaptation to newer technologies is essential. 

A digitally advanced company stays forward in the market and maximizes ROI while minimizing time and cost. 

Connecting with a legacy application modernization services provider who understands your requirements and designs the perfect set of tools and technology for seamless integration is important. 

Some might think that application modernization is an expensive step, and it is also true, but using legacy applications can cost them more. As mentioned in this section, outdated technology can lead to financial and non-financial losses. 

Benefits of Application Modernization 

• Competitive Advantage 

Businesses that leverage technology during its initial stages lead the market. It gives them a better position in the present scenario and secures their future. 

Having said that, connecting with a leading software development company is essential to get desirable results. This is needed as the experts will ensure your investments are compensated well.

• Optimal Security 

With everything going digital, cybersecurity cases have increased rapidly, and modern infrastructure can easily tackle them all. The newer applications are designed with updated security standards and authentication methods in mind. 

This is one of the most important application modernization benefits as security and privacy are the most important elements for a business’s success. 

• Relevancy Is Maintained

Today, thanks to AI/ML, AR/VR, Cloud, and other smart technologies, the whole ecosystem has taken a massive leap. It has improved operations on both internal and external levels. Today, clients seek relevant service suggestions, which can be easily done using advanced technological integrations. 

The current tech stack has these features embedded in the system to meet the client’s demands. Simplified operations imply seamless customer interaction with the company/brand.   

• Improved Productivity 

The present technological infrastructure can handle cumbersome tasks like data sorting, processing, and organization, etc., freeing the developers to focus on high-priority tasks. 

This way, developers will feel more satisfied and productive. Improved productivity will help them deliver quality products faster and more efficiently. Another benefit of these automated tasks is less chance of mistakes that occur if done manually. 

• Cost-Reduction 

Using the modern tech stack implies easily accessible services and faster updates, thus accelerating the overall upkeep.  Additionally, cloud-based operating systems further minimize the cost of assembling and maintaining the on-premises infrastructure. 

The simple interfaces make them easy to manage, eliminating the cost of hiring experts for maintenance. 

• Other Advantages 

Regularly investing in application modernization services will ensure faster delivery, innovative results, and optimal user experience, solidifying customer loyalty. It will also minimize the risk of data loss and security breaches. 

While on the client front, application modernization will improve customer satisfaction, on the operational side, it will make the processes smoother and employee-friendly. 

When Is The Right Time For Legacy Application Modernization? 

Technology updates can be tricky, especially when it involves a complete transformation. It is expensive, time-consuming, and most probably non-reversible. The first step towards application modernization should be in-depth research and understanding. 

To begin with, here are a few points one must consider when seeking modernization services: 

• Application’s Age

Newer applications are launched quite frequently, so using older technology implies its upgraded version is already on the market. If the current version does not offer enough scalability or flexibility, you must invest in getting a new one. 

• Its Compatibility 

Adding new features and integrations to match the company’s requirements on the outdated system will sooner or later cause compatibility-related issues. When the older system isn’t consistent with the newer integrations, that is a clear sign of a much-needed upgrade. 

• Security Issues 

It can’t be stressed enough as to how important this one is. The legacy system often lacks many security features that can put sensitive information at risk. If the older system doesn’t comply with the new security regulations, it is advised that it be changed as soon as possible. 

• Integration Challenges

To maintain relevancy among businesses, following current practices is essential. This implies incorporating current practices and applications into the infrastructure. In this case, using older technologies might complicate the data transfer, risking data loss. 

• Scalability Issues 

Another reason why application modernization is needed is the limited expandability option available. The older applications did help with scalability, but today, it is not enough to match the growth.  

• Maintenance  

It gets challenging to find the right expert as technology ages, thus limiting its improvement capabilities. This will further hinder the organization’s growth. With the skill gap, a lack of proper services will make maintenance expensive and tedious. 

If any of the above reasons hinder your app development journey during the process, then it is time for application modernization. Using outdated infrastructure can land you in fiscal and technical debt, unfavorable for any business, IT or non-IT. 

Types of Application Modernization 

Legacy modernization isn’t an off-the-shelf process; it involves numerous approaches that can be easily leveraged. Based on the preferences and requirements, one or a combination of the following application modernization approaches must be chosen:

• Rehosting 

This approach is about taking the application and shifting it from a legacy system to a modern infrastructure. This is often seen when transferring regular systems to the cloud. In this method, the application is taken and transferred as it is, thereby also known as the “lift-and-shift” method. 

• Refactoring 

This approach involves making a few easy-to-do changes without affecting its external behavior. This is done to ensure that the system is in sync with the latest cloud-based technologies. The main goal behind this approach is to improve the design, structure, and responsiveness without compromising the fundamental functionality. 

• Replatforming

It is a good middle ground between the first two approaches; and is used to change the codes to make the app compatible with the latest cloud technologies. This is done to increase the longevity of the application via regular updates. 

• Rearchitect

This approach involves completely redesigning the structure using modern technologies to incorporate current architectural patterns like microservices or service-oriented architecture, etc. This allows organizations greater flexibility and scalability. 

• Rebuild

As the name suggests, this approach is about rewriting the entire architecture from scratch. In the case of old technologies, companies use this application modernization approach to recreate the entire application from scratch. While this one is most time and resource-consuming, this approach also offers maximum modernization advantages. 

• Replace 

This approach is like the last approach in the development journey. Suppose the application doesn’t provide optimal performance even after rehosting, refactoring, or rebuilding it from scratch. In that case, it is advised to be replaced by a ready-to-use SaaS-based application. This saves the development team a lot of time, effort, and resources.   

Application Modernization Tools

Depending on the company’s requirements, a myriad of application modernization strategies can be designed using a few fundamental tools listed below: 

• Cloud Computing 

Taking the traditional system to the cloud is necessary to make the operations easily accessible and flexible. There are also numerous options to choose from. Depending on the project requirements, complexity, and budget, businesses can go for Hybrid cloud, public cloud, private cloud, or multi-cloud services. 

Taking the whole system to the Cloud eliminates the need to be constantly on-premise. Operations can run from anywhere. 

• Containers And Kubernetes 

Containerizing an app makes it extremely lightweight and portable. This is especially beneficial for businesses looking to update their mobile applications. With this, the newly designed application will work efficiently across multiple devices and platforms. 

A thorough discussion with your chosen mobile app development services provider is advised for better decision-making.   

• Microservices 

In the case of monolithic architecture, application modernization entails taking the whole system and dividing it into smaller microservices for faster development and deployment. It also makes the app more agile, scalable, and resilient.

• CI/CD Automation 

The manual deployments of updates can be automated using CI/CD pipeline automation services. This will reduce human dependency and save developers time while ensuring no delays. 

Cloud resource deployment and management can also be automated using Infrastructure-as-a-code (IaC) tools. 

• AI/ML

Going for legacy application modernization means it has to have intelligent AI-powered integrations. This will help channel the data for improved suggestions, better data utilization, and enhance the overall experience.  

Other than that, AI-powered automation solutions can also be implemented depending on the requirements. 

• Serverless Operations 

Many development platforms, cloud service providers, and BaaS providers offer serverless functionality. By going serverless, resilient applications can be deployed faster while saving the cost of buying and maintaining a server. 

Application Modernization Process: Key Steps for Success

When it comes to any effectual digital transformation, the rule of thumb is to start by designing a perfect strategy. Mapping out every step of the process with a set intention behind it. Legacy modernization is no different. 

From identifying the problem areas to listing the required integrations, a lot goes into developing a perfect modernization solution. 

Here’s an easy-to-follow, step-by-step process to help you design an effective application modernization strategy that enables you to reach your desired business goals. 

Step 1: Evaluate The Current Infrastructure

Start by assessing the existing situation with a question, which applications need to be modernized and why? Identify the applications hindering the process, like causing a delay, not adding enough value, or affecting the customer experience. 

Then, determine which needs to be replaced and which can be improved with minor changes. Doing so will help maximize profits while eliminating risks and unnecessary expenditures. 

This will help set clear intentions for the project to proceed in the desired direction. 

Step 2: Choose The Right Strategy

A complete analysis of the present framework can be done using AI-powered tools. With this, companies can identify the dependencies and complexities involved to differentiate between the infrastructure that needs to be replaced and those that require an update. 

Understanding the risk of keeping the aging framework is essential here, as it can pose a major threat in the upcoming years in the form of technological debt, compatibility, security, and legal issues. So, choosing the right approach is essential before moving forward, for it will simplify the application modernization process in the future. 

Step 3: Set An Estimated Budget  

Any business step, especially a change, requires a correct budgeting system to better understand the financial aspect involved. After assessing and analyzing the current situation, it would be easier to estimate the overall cost. 

A complete assessment and analysis will help determine the extent of change required, and based on that, budgeting can be done. An essential thing to remember is that application modernization services can get very unpredictable compared to other transformation services. 

This is because it depends on the age of existing infrastructure, and secondly, it is a continuous process.  Newer digital solutions keep hitting the market, and the latest one is always one step better than the previous one.

In this case, it is important to understand the cost of application modernization against the profit earned. This will clear things up so businesses don’t get into a bandwagon of trends but choose what is profitable per their business model. 

Step 4: Define The Modernization Goals

After identifying problem areas and defining the budget, it is essential to set a goal. Depending upon the internal operations and target audience, business-critical applications can be identified, and various modernization systems can be easily explored.    

Understanding the different modernization plans and how they will help the business’s standing in the market is vital to designing a fitting application modernization strategy.  Answering questions like how it will improve the conversion rate, enhance user experience, or provide a seamless experience, etc., can be a good starting point to set the right goal. 

Defining the objectives helps achieve the desired results faster with intentional planning, followed by deliberate actions taken in the right direction. 

Step 5: Choose The Right Application Modernization Approach 

Now that there are set goals in mind, the next thing is to choose the right mode to lead the organization in the desired direction. This involves choosing the right application modernization tools and the type. 

One or multiple approaches can be selected based on all the variables, including the equipment age, risks involved with legacy infrastructure, budget, and cost. 

It is important to decide what integrations are needed, like investing in which smart technology is needed and to what level the integration is required. 

Various approaches are available, like rehosting, refactoring, rebuilding, replacing, etc. These are effective on their own or can be used in combination. Again, the choice depends on several variables, including the current business requirements, budget, and urgency. 

Step 6: Find The Right Modernization Partner

Application modernization is a complex process. This is why partnering with the right service provider who understands the requirements and shares the same vision is an undeniably important step. 

Specifying and allocating the roles accordingly will help determine a clear development process for everyone. Since doing this internally will neither provide enough clarity nor expertise, businesses need a reliable product modernization services provider to join the journey. 

With years of hands-on experience in the field, these service providers understand the nuances of modernization. They evaluate, understand, and design a clear roadmap for successful results. 

Step 7: Implement And Observe

The final step is to execute the changes, implement them in the system, and then monitor them. 

Doing so will give clarity on what is working for the business and what isn’t, thereby setting the tone for the next application modernization journey. Using KPI tools is advised to monitor different aspects of the modernization process. 

Another thing to remember is to invest in modernization services regularly so the applications align with current market trends and business requirements. Constant monitoring is needed for effective modernization practices and business growth. 

Suggested Read – Guide to Enterprise App Development 

Application Modernization Challenges

Encountering hindrances is inevitable during any change. These barriers often get so overwhelming that they either delay the whole process or, worse, stop midway through it. 

Since it is a complex, costly, and time-consuming process, knowing everything, including the good and the bad, can help businesses stay aware of what to expect and how to tackle it. 

We have curated some commonly occurring legacy modernization challenges and tips to overcome them to make your modernization journey easier. 

1) Lack Of Clarity

Many businesses often struggle with the question, “What should they prioritize?” regarding where to start the process, how to begin, and what technologies to use. This can create confusion, eventually leading to either backing out of the whole journey or not prioritizing the key problem area. 

Solution – Look through the portfolios of different application modernization services providers and connect with the one that fits all your criteria, like location, competence, the skillset of resources, the technology used, etc. Discuss with them and get an expert suggestion to all your confusion for a definite start. 

2) Unprepared For The Massive Shift 

Application modernization implies a huge change in the organization’s operations, from basic to more complex. While employees might be well-informed about the change, staying prepared for it that’s a whole different story. All the modernization efforts will be rendered futile if the human resources are not adept with the updated system. 

Solution – Proper training and well-informed progress will help employees feel more included in the shift. The change will eventually cause some hindrance in workflow initially, but adjusting to it will be far easier than going in completely unaware. 

3) Disruption Caused Due To The Shift 

Often, enterprises aren’t aware of the extent of their dependence on the legacy system. This may cause a massive disruption within the organization, leading to delays, data loss, and confusion. Additionally, the lack of the right knowledge and skillset adds to the existing chaos. 

Solution – There are three approaches that businesses can opt for streamlined application modernization. One is to divide the whole project into smaller sections and work on them individually for minimal disruption. The second is to link the existing on-premise operating system with third-party managed cloud services. Lastly, go for no-code platforms for minimal friction between the business and IT before deployment. 

4) Security Vulnerability 

This is one of the crucial legacy modernization challenges among all. Transitioning from the older infrastructure to the latest one may expose the data to threats, which can lead to irreparable damage to the organization. 

Solution – Partnering with a leading application modernization services provider is advised. Being their area of expertise, they know how to seamlessly integrate modern technologies without risking any data leak or exposure.

5) High Dependency On Monolithic Application 

For organizations highly dependent on monolithic architecture, application modernization can be difficult, especially cloud migration. Highly aged technology makes the transfer more complex. Additionally, finding skilled professionals who can uncomplicate the system for an easy shift is often very difficult. 

Solution – Firstly, finding the right technical expert who can easily understand the monolithic framework is essential. Then, starting the application modernization with microservices will ease the migration process. 

Application Modernization Best Practices

The Current landscape is proof that the latest technology-powered solutions are a necessity for staying relevant in the market. These highly efficient integrations are needed for improved operations and maintaining excellent customer relationships. 

These practices can further optimize the benefits of application modernization: 

#1 Strategize And Then Begin 

Do not jump right into modernization just because it is a trend or someone else in the market is doing so. Rather, assess your current infrastructure, analyze the requirements, and strategize the modernization process. 

It is important to understand that these strategies are tailored to match the business requirements and are not off-the-shelf solutions to be followed by everyone. 

#2 Select The Right Tech Stack 

Decide on the extent of integration, like, if automating the system, should it be just the required tasks or a fully automated system, if going for cloud integration, does it have to be fully Cloud computing or hybrid system would work too. So on and so forth. 

Decide on these things to maximize the gains of application modernization while ensuring that it is not too expensive for the business.

#3 Set Up A Perfect Schedule 

Complete transformation at once will be too sudden and can cause massive disruption, not to mention hindering day-to-day operations. Avoid this by breaking the whole process into smaller operations and proceeding individually per the priorities.

This will minimize the disruption, and the transition will feel seamless. 

#4 Plan For Future Updates 

Application modernization is a continuous process. Regular investment in the same increases the value and longevity of the resources. Planning for these future upgrades will ensure there is a set budget allocated, and any training (if required) can begin in accordance with the modernization schedule for a seamless transition. 

How Can Openxcell Help? 

Application modernization is not a primary operation for any organization, IT or non-IT, but it can get very tricky for those who are not familiar with technology, frameworks, and other complexities. This is why there’s a need for partnering with a reliable service provider. 

OpenXcell brings with it more than a decade of experience to assist your organization’s growth. Our resources simplify everything from development to modernization with their comprehensive technical knowledge and intelligent soft skills. 

Leverage the flexibility of offshore hiring with the skillset of on-site experts to modernize your existing infrastructure.