As organizations respond to external pressures to be more agile and efficient, this transformation extends to its portfolio of applications. Application modernization is the ‘digital transformation’ of software to take advantage of modern architecture, tools, languages, and approaches.

This guide was created to help enterprises understand the importance of application modernization, its benefits, and all the various technologies that can be leveraged when shifting on-premise, monolithic applications to the cloud with flexible, scalable microservices.

What is Application Modernization?

What is meant by Application Modernization? Application modernization, also known as legacy modernization or software modernization, is the act of re-writing or porting (adapting) a legacy system to a more modern system to help enterprises benefit from new technologies and deliver better user experiences.

Application modernization can include a shift in the programming language, architecture, libraries used, or other technologies, as well as shifting paradigms to reflect modern user interactions - how to interact with the user, engineer interactions, or deliver interactions.

What is a Legacy Application?

A legacy application is any business-critical application that relies on older technology or methods and may not interact well with newer systems or applications. While some may call the system “obsolete,” it remains in use because it is still needed for day-to-day business in some way.

Legacy code, often inherent in legacy applications, can become obsolete when it is no longer supported within the ‘new’ standard environment or when it uses languages, frameworks, or libraries that are no longer ‘common’ knowledge, making it difficult for others to maintain. Further, many legacy applications lack automated tests, making updating or integrating with other systems or hardware complex.

Why is Application Modernization Important?

As organizations continue their digital transformation journeys, which have been accelerated in the past few years, leaders know that new technologies are the key to business success, changing how work is done and the value that is driven to end customers. As we emerge into a time of “combinatorial” technology, it is more important than ever that organizations consider how all their systems and applications work together - and modernize any that do not mix well with others. Gartner estimates that cloud spending will surpass IT spending by 2025, a migration to the cloud that will soon leave behind any on-premise monolithic software solutions.

Over time, legacy applications begin to accrue an increasing number of issues as the systems become difficult to maintain, use or integrate with, to increase technical debt and overall costs:

1. High maintenance costs

Applications become bloated over time as new features or changes are made, and support for systems finishes increasing maintenance costs.

2. Doesn’t work with modern technologies

Many modern cloud and SaaS solutions are not compatible with on-premise applications.

3. Costly custom integrations

Integration with modern tools may require expensive custom work vs. newer modern solutions with APIs to ease integrations.

4. High technology costs

As enterprise workloads shift to the cloud, continuing to support on-premise software requires continued costs for hardware, security, storage, etc.

5.Lack of business agility

Legacy applications remain an obstacle to being agile to changes in the business environment or to overall digital transformation efforts.

6.Not responsive

The software also becomes less agile, with a long pipeline to release new features or updates.

7.Data silos

When data is held within legacy applications, it must be actionable across the entire organization, making it out-of-date by the time it is used for decision-making.

8.Inefficient workflows

Working around legacy systems is costly from a user standpoint, leading to process inefficiencies.

9.Security

Legacy applications may additionally reply on older operating systems or third-party software or code that is no longer updated and remains unpatched.

10.Barriers to digital transformation

As other business areas are modernized, legacy applications keep organizations from reaching their full potential in digital transformation efforts.

However, application modernization is driven not just by cost or IT drivers but business drivers: the need for agility, delivering on business value, or meeting the strategic demands of the business. App modernization can provide an ROI of up to 228%, suggests one Forrester study.

“For many organizations, legacy systems are seen as holding back the business initiatives and business processes that rely on them. When a tipping point is reached, application leaders must look to application modernization to help remove the obstacles.” - Stefan Van Der Zijden, VP Analyst, Gartner.

Application Modernization Technology & Key Components

It’s clear to say, “let’s modernize an application,” but what does a modern application look like? Today, that always means a cloud-based application, but there’s more to it than just cloud. Enterprise application modernization will involve several key technology choices, including one or more of the following:

Cloud

First and foremost, enterprises undergoing application modernization are looking to leverage the power of the cloud, which means coming up with a cloud migration strategy that works, shifting to either a public cloud (the most popular and flexible being Amazon AWS or Microsoft Azure), private cloud deployment, hybrid cloud, and multi-cloud.

As businesses embark on this cloud application modernization journey, they will embrace both platforms as a service (PaaS), a framework to build / test / manage custom applications, and likely infrastructure as a service (IaaS) refers to virtual data centers.

As many business factors are involved in just cloud, and cloud application modernization and migration can be a large job, 19% of enterprises report relying on the experience of a cloud migration partner to assist in the project.

MACH Architecture

While organizations were only looking to the benefit of microservices, today’s application modernization approaches are elevating one step higher to ensure the architecture reflects the greatest flexibility possible. MACH architecture is one such approach, characterized by the following:

1.Microservices

The use of independent services for different components or business processes, each communicating through API. A microservices approach allows enterprises to build or choose the best service for each component and scale or swap each service as needed. Built-in modular fashion, microservices enable organizations to create multiple modules, accelerating time to market. Like the cloud, this is one of the top reasons for application modernization.

2.API-First

To be API-first means to think of the API as the center of the product design, not an add-on. This concept forces developers to think of product design that prioritizes how individual components communicate effectively.

3.Cloud Native

As mentioned above, application modernization is often called “cloud application modernization” because it prioritizes the cloud. In MACH, cloud-native means the design has all servers, databases, and software running in the cloud. Ideally, it leverages containerization to isolate them from architecture and help reduce dependencies.

4.Headless

A headless design is an architecture design that “decouples” the front and back ends of the application, connecting them via API, allowing businesses to make changes to the front or back end without impacting the other and allowing each ‘end’ to be optimized with different frameworks. Combined with microservices, this usually means the backend comprises many different business modules.

MACH architecture can be applied to many products that want to launch quickly and support changeable components and scalability. Still, it is well-designed for digital commerce and for digital transformation efforts.

Composable Architecture

Composable architecture is similar to MACH architecture, which includes incorporating microservices into the front end, further increasing that flexibility across various touch points. Composable architecture is extremely common in modern eCommerce applications:

Containers

Most modern applications leverage containers and Kubernetes. A container will hold everything needed to run an application (all the code, libraries, etc.). Kubernetes is a container management platform that helps create a unified pool of compute resources.

UX Modernization

Consumers demand more personalization, modern experiences, and intuitive design. As part of application modernization, many organizations are rethinking how they approach user experience (UX) with a UX modernization activity that examines an existing application and how it can better meet the user's needs, expectations, and desires. As with any great UX design, this will involve research into visual design, features, or accessibility.

Benefits of Application Modernization

Why modernize applications? Research suggests that updating legacy applications can deliver agility, innovation, cost savings, and increased productivity. Here are some other benefits of Application Modernization:

Agility

Agility is one of the top business drivers for application modernization. Modern applications are integrated and agile to changing demands, providing real-time access to data for decision-making and the ability to update or pivot as needed to meet the new demands of the business.

Accelerated Innovation and Time to Market

According to a Forrester study, organizations average a 50% increase in the speed of application development with application modernization. Further, innovation is two-fold, as application modernization is not a “once and done” approach but one that helps future-proof organizations to be able to continue to innovate over time.

Security & Reliability

On-premise infrastructure could be better for uptime and increases the burden on internal teams to be security experts. The cloud improves uptime, and modern architecture such as MACH and composable help introduce greater independence between parts in the overall system to ensure reliability. In terms of security, modern cloud providers act as trusted partners in security, taking over the management of the underlying infrastructure.

Efficiency

One of the main goals of application modernization is to reduce IT costs and complexity, so the benefit here is to reduce how much it costs to maintain or update the application. Further, application modernization also unlocks reduced infrastructure costs.

Compatibility

Application modernization opens up the ability to integrate with current or future technology.

Application Modernization Steps

Once the cost-benefit analysis identifies the need for application modernization, organizations need a clear path to success. The step-by-step guide to application modernization includes the following:

• Evaluate legacy systems
• Define the problems
• Evaluate the types of application modernization
• Choose the application modernization approach
• Prepare for the future
• Choose the right partner
• Optimize

Step 1. Evaluate legacy systems

At this stage, organizations need to evaluate their systems against their internal costs, whether those are high IT costs or risks or they are business drivers to become more agile. It is time to switch where the drivers outweigh the cost of application modernization efforts.

Enterprise application modernization is the recognition that the costs associated with legacy applications have become too high and far outweigh any cost associated with application modernization. Further, as the list above alludes, the application modernization business case is driving the shift - that, according to Gartner’s six drivers, it needs to create business value, deliver agility, or have the appropriate business fit.

Step 2. Define the problems

So once the cost/benefit analysis shows that the legacy application is no longer meeting current business needs, it’s essential to break that down further. In product development terms, this is the process of developing user stories that describe the desired behavior of the application. Sometimes, the legacy application may satisfy those user stories (great, it works!), but in other cases, it doesn’t.

Step 3. Evaluate the Types of Application Modernization

How do you modernize an application? There are several types of approaches to legacy application modernization. These are expressed by the 7 R’s.

1. Retain

Retaining an application is valid if the system is business-critical. In this approach, organizations will simply encapsulate the application by building an API wrapper around the system that allows other systems to communicate with it. However, while this is a fast approach, it still hits the limitations of its existing code base.

2. Rehost

In the rehost model, enterprises “lift and shift” data and applications to the cloud.

3. Refactor

In refactoring, developers “lift, tinker and shift,” making changes to optimize a legacy system for the PaaS approach, including shifts that impact performance, scalability, or maintainability. Think of this as “customizing” or “optimizing” an app.

4. Replatform

In replatform, an application may already be on the cloud but on a legacy platform or one that simply no longer suits in terms of functionality, performance, or scalability.

Variant: eCommerce Replatforming

In eCommerce re-platforming, an eCommerce site is moved to a new platform while ensuring all parts transfer: product information, customer data, and order history. In a re-platforming situation, it is common to update the front-end design or architecture to include new features of the platform or new third-party services. Further, the replatform will likely re-evaluate the back end and potentially add new third-party services (microservices) to optimize the offering. Learn more about how to choose the best eCommerce platform.

5. Re-architect

In re-architect, organizations divide an app into functional components that can be reassembled as microservices and shifted to the cloud.

6. Rebuild

In rebuild, organizations will start from scratch to build an application of the same scope or with the same specifications as the legacy application but with newer technologies.

7. Retire / Replace

In this option, organizations may be modernizing many applications. They may find that some are obsolete and should simply be retired or that they can be replaced by software-as-a-service (SaaS) or by going back to the product development process to rethink how a different app could best suit the business need.

Step 4. Choose the application modernization approach

As noted earlier, user stories are the key to understanding which legacy application modernization approach to take - the pain points of the current app and how well they can be salvaged. However, there is a methodology that can supplement this, ranking both efforts (time and cost) alongside business impact (low lift, not as modern vs. high work, more modern approach). Other factors to consider include the internal team's capacity, budget, risk, security, and overall support of the organization.

Re-platforming, refactoring, and architecting are the most common approaches to legacy application modernization – the right mix of ease and return. Organizations can choose a gradual approach to enterprise application modernization, first opting to encapsulate while undertaking a more comprehensive (and time-consuming) refactor, rearchitect, or rebuild strategy for the long term.

Step 5. Prepare for the Future

Today, 90% of organizations are being held back by legacy technologies, so the last thing that organizations want to do is create an app that creates future technical debt. Choose an application modernization framework with the least " lock-in " possible to avoid this. Think not just of now but of the future.

When choosing an application modernization method, ask how long that method will work for and if refactoring, re-architecting, or rebuilding offers the best long-term approach.

Step 6. Choose the Right Partner

Only a few organizations rely on internal resources to modernize applications - it is not the experience of internal staff to take this on. IT skill shortage is still rampant across the US and many other countries, with the majority of skills focused on modern areas such as architecture (34%), cloud (28%), and DevOps (32%).

A trusted application modernization partner can bring technical expertise with teams experienced in the latest web, mobile, and cloud technologies. Look for an agency specializing in digital transformation with an established track history in delivering end-to-end Agile development to support the latest digital products and customer experiences.

Step 7. Optimize

As with any effective product development process - and application modernization is one such variant - it is essential to include iterative feedback. Agile principles are designed to support rapid development backed by transparency, continuous feedback and improvement, and adaptation. Further, DevOps helps ensure that development and operations teams are aligned on quick deployments that help reduce error and promote better team collaboration.

These principles are essential during the entire application modernization roadmap to ensure user stories are realized, no unexpected hiccups or connectivity issues, and that performance is optimized. Long term, continue to optimize and expand.

Top Challenges During Application Modernization

What are the top application modernization challenges? While at the business level, application modernization is the right approach; there are common challenges that may occur:

• Have chosen an approach that was not comprehensive enough, leading to incompatibilities with desired tools or services
• Have trouble determining which application modernization method is the right one
• Internal resistance to change
• The interconnectedness of the ‘monolith’ system is overwhelming as it may be connected to other apps or infrastructure, third parties, or have accumulated large amounts of technical debt.
• A lack of experience in choosing the best microservices to start with
• Lack of internal skills for the migration phase
• Data security during the transition

The truth is that application modernization can be a large job - and the more integrated, critical, or central the application is to the business, the bigger the risk of ‘getting it wrong.’ Rather than go it alone, the best option is to bring in a business partner who can advise at critical junctures.

Application Modernization Trends & Tools

New Generation eCommerce Platforms

As enterprises look toward the future of eCommerce on Digital Experience Platforms (DXPs), they seek to provide transformative customer experiences across multiple channels thanks to the merger between a traditional content management system (CMS) and eCommerce platforms.

Many new generation eCommerce platforms embrace modern architecture and deliver on the content+commerce ideal, including BigCommerce and Commercetools. BigCommerce is based upon MACH, allowing enterprises to start and scale robustly, ideally suited for omnichannel and headless commerce. Fantastic features are available in the form of customizable templates, an extensive in-built feature set, and unlimited bandwidth. Commercetools is based on Composable architecture, focusing similarly on microservices and modern tools.

Artificial Intelligence (AI)

AI is being incorporated in new and exciting ways, including as part of virtual assistance, in the automation of business processes, help services, forecasting, and many areas. Modern product development processes will evaluate whether AI can drive business value.

Composability

While addressed earlier as a common approach for product architecture, there is a growing trend toward compatibility due to its high flexibility and agility, the reusability of components to support future innovation, and the ability to quickly adapt to changing user demands.

Multi-Cloud

The use of multiple cloud services (more than one platform provider) is growing since each cloud provider offers different features. Rather than build and integrate these features, it’s faster to multi-cloud with infrastructure (API, containers, middleware) to manage workload.

Net Solution’s Approach to Application Modernization

Net Solutions has proven experience in application modernization following our Agile DevOps process to ensure that, no matter the approach, we have the team ready and experienced to help.

Net Solutions will work with you to ensure your goals are heard, incorporated, and reflected:

• Define goals - examine the current legacy system and what does or does not work. Create user stories.
• Establish scope - prioritize the user stories that need to be solved
• Craft requirement - brainstorm an approach to application modernization, looking at architecture, technologies, frameworks, languages, and microservices. Align a team internally around those requirements.
• Development - build the user stories in time-boxed sprints.
• Test and deliver - incorporate testing after each user story / major step to identify bugs or incorporate feedback to create the ideal end product.
• Training and support - create a smooth hand-off to the client, including training, technical handoff, or any ongoing support in terms of maintenance or endless new features.

FAQs

1. What is Strategic Modernization?

Application modernization is a key part of business strategy. While always customized, take a strategic approach that builds value in phases - both a short-term return with a more straightforward method followed by a more strategic long-term improvement.

2. Application Modernization Vs. Data Modernization?

Application modernization changes the application to the new architecture, microservices, or cloud capabilities. Data modernization looks only at the data layer and focuses on using cloud data services.

3. What are the different types of Cloud modernization?

Cloud migration moves an app, systems, and data to the cloud. Still, this process has many pieces - from the type of cloud (public, private, hybrid, multi-cloud) to cloud-native architecture (containers, microservices).

4. Why is Cloud Migration coupled with Modernization better?

Cloud migration alone only addresses one piece of a potential ROI from digital transformation. While it can reduce cost, potentially include API communication, and meet needs, this ‘lift and shift’ approach does not optimize apps to all the modern benefits of microservices, flexible architecture, or improved workloads.