Large successful companies have one thing in common: they respond quickly to changing business conditions, often capitalizing on them. One resource that gives many of these companies their business edge is the ability to rapidly migrate legacy and proprietary, mission-critical applications to dynamic, standards-based Web environments such as service-oriented architecture (SOA).


Unlike some IT projects, application modernization works generally well and delivers benefits quickly. Successful projects refresh old applications with Web-based connections, integrate old applications with new ones, save companies money on IT maintenance and, if aligned with business objectives, are powerful engines for corporate success.


Technology issues should, of course, take a backseat to business ones. The core imperative for companies is to refresh applications quickly in response to fast-changing, often unpredictable market situations – situations that can literally sink or save a company overnight.


Application modernization initiatives enable companies to move legacy applications to modern Web-based platforms that deliver optimal functionality and flexibility, to comply with regulatory requirements and to keep pace with competitors without disrupting their operations. In addition, such initiatives help businesses cut operational costs, while refocusing existing budgets to serve new projects.


How SOA Fits into the Picture


One of the best ways to modernize legacy applications (and improve business functionality at the same time) is to integrate them into existing applications using a SOA.


SOA enables the relatively affordable creation, use and reuse of business processes, packaged as services and allows all applications to exchange data and participate in business processes. These services include applications that can be used by people inside and outside of a company for greater agility and uniformity. For example, a bank should be able to easily and quickly reuse a customer’s personal information when the customer wants to open a second account. A customer with a checking account shouldn’t have to provide personal information when he or she opens an IRA or a credit card account, nor should the bank have to rekey such data.


One of SOA’s biggest benefits is that it improves business agility, meaning that once SOA is implemented, companies can respond immediately to market changes that affect their businesses. Those changes may include new pricing for raw material, connecting to a supplier’s new third-party applications, or a sudden drop in the availability of a particular part.


SOA uses Web services, which are loosely coupled application components built upon open standards. A loosely coupled architecture enables developers to create applications that fit into heterogeneous environments inside and outside a company. The flexible nature of these open, standards-based components enable IT programmers to combine many components into new applications they can deploy at a fast pace.


Market Data and Vendors


The worldwide software market for SOA, Web services and Web 2.0 will grow from $41 billion to $142 billion from 2006 through 2011, according to a June 2007 report from Gartner, an IT research firm.1 Gartner estimated that 63 percent of the worldwide infrastructure market will support SOA, Web services or Web 2.0 by 2011. And, 60 cents out of every dollar that businesses spend on software will be spent using SOA, Web services or Web 2.0.2

Research firm IDC estimated that worldwide software spending for SOA-based initiatives will reach nearly $14 billion by 2011 and that SOA-driven professional services engagements will reach $40.8 billion by the same year.3


Vendors that play in the application modernization space include: ATERAS, BluePhoenix, Clerity, IBM, Micro Focus, Nexaweb and Unify.


ATERAS’ strength is legacy application and modernization tools that convert mainframe applications to Windows.NET. Clerity focuses on legacy migration and mainframe rehosting solutions. IBM’s is the market leader in SOA solutions. Micro Focus offers a raft of solutions for modernizing mainframe applications. NexaWeb provides an application development and deployment platform for building mission-critical, secure Web-based business applications. Unify, with its Composer offering, migrates and modernizes Lotus Notes applications to the Microsoft platform.


Different Ways to Modernize Applications


As with most important programming endeavors, application modernization can be done in different ways, depending on a company’s needs, budget, IT expertise and knowledge of the pros and cons of each approach.


Broadly speaking, there are three ways to transform a legacy application into a modern one: rewrite it, purchase an off-the-shelf solution or migrate the application to a Web-based platform, such as .NET or SharePoint.


Rewrite an Application


The big advantage of rewriting an application is that you can customize it exactly as you want it. Any application that no longer meets current business requirements will likely require a rearchitecture and change in business logic.


On the downside, however, the process of rewriting is very time intensive, expensive and consumes a lot of internal resources. Another negative is that the process can be disruptive to the end users’ work lives as they have to do their jobs while learning new technology.


Purchase an Off-The-Shelf Solution


Buying an off-the-shelf solution is a great way to avoid the considerable headache of rewriting code. All that’s required is to customize the user interface and the business logic, and integrate the application with existing applications and databases.


However, IT or outside consultants may have to do significant rewriting to meet internal demands. As with the option of rewriting an application, purchasing an off-the-shelf solution can produce quite a bit of disruption in the workplace and entail employee training.


Migrate an Application


Hands down, this is the best option for many reasons. By using an offering from NexaWeb, BluePhoenix or Unify, you can produce a replica of the original application quickly, efficiently and with minimum workplace disruption. Unify offers a like-for-like migration of the Lotus Notes applications to the Microsoft stack.


Many migration offerings offer wizards that automate most, if not all, of the process. Thus, the process involves little or no additional coding. Produces expected results rapidly, minimizes IT effort and saves time and money.


The most advanced offerings do not change the source code but recompile it to run natively on the new platform. They write data directly to the new database. More importantly, they maintain familiar interfaces without forcing employees to learn new interfaces and acquire new skills. Usually, existing staff can easily maintain and support the new applications.


Some solutions can convert an application to a more modular and standards-based services-oriented model, making them more useful than those that perform just a straight code translation. The best offerings can transform the complexities of sophisticated workflows and massive amounts of intricate code.


Which Kinds of Companies Are Successful At Modernizing Applications


While all kinds and sizes of companies do or plan to do legacy application modernization, large and midsized enterprises are the most active, for obvious reasons. They have the most legacy applications, the largest IT budgets and the greatest needs to improve the agility of their businesses.


Agility, not cost, is the driving factor by a ratio of two to one for best-in-class organizations that are working on legacy modernization projects.4


The Aberdeen report, based on a survey of more than 300 organizations worldwide, found that the modernization of legacy applications is a long-term, strategic initiative for more than 90 percent of companies that participated in the survey.5


Aberdeen found that IT is under intense pressure from business units to deliver applications that provide new ways to look at old processes and data. The companies that excel at modernizing applications keep up with these demands while lowering their overall costs for maintaining legacy applications. These companies leave applications in place and build services-based interfaces on top of their legacy packages and data.6


The research firm also found that companies which deploy service layers on the mainframe in order to expose legacy packages see a 60 percent decrease in the cost of legacy application maintenance versus an average 30 percent decrease from other approaches.7

Benchmarking the Success of Companies


Legacy applications, which usually contain a company’s essential business functionality, are expensive and difficult to maintain. Completely replacing these applications is never a viable option because the cost and time involved would be grossly disproportionate to the benefit.


Faced with the challenge of preserving their investment in legacy applications and developing new applications to meet business needs, companies typically rehost the applications or add new interfaces to them.


Rehosting involves moving the legacy application to a new platform while keeping the code intact. Adding interfaces can be done on the mainframe or off to best integrate the application with Web services or SOA middleware.


The best-in-class companies mostly choose to SOA-enable their applications, according to Aberdeen. Thirty-three percent of those companies SOA-enable on the legacy platform while 19 percent SOA-enable off the platform.8


Aberdeen also found that best-in-class companies continue to invest in SOA infrastructure. Twice as many of these companies deploy SOA service layers on the mainframe compared with laggard and industry average companies.9


The Nexus of Organizational Capabilities and IT Capabilities


Companies that align their IT capabilities with their business capabilities tend to have more success with their application modernization projects than those that don’t.


Key to achieving success is adopting a metric-driven approach whereby a company can verify that critical objectives of the project are achieved. The approach should cover all aspects of the project so that the migration proceeds smoothly and within budget. Shop around - some vendors deliver a fixed fee/scope migration service.


Application modernization is vital to the long-term business agility of a company, and is more doable than ever thanks to new standards-based open technologies and migration solutions that leverage those technologies.


However, migrating or modernizing applications is not without its complexities.


Before taking any action, companies need to carefully examine each application to determine which processes can become more automated and responsive, and to identify generic services that can be leveraged across the enterprise.


A typical project entails not only technical expertise and experience but business understanding of the company’s existing processes and how the new technology will impact those processes. Of course, companies should also consider the total financial effect, overall disruption and organizational strain of doing an application modernization project.


Finally, consider that the most efficient migration solutions enable organizations to extend data and improve integration and collaboration. Products with more advanced technology transform legacy applications feature for feature better, including the user interface, business logic, workflow and security, to a standards-based platform.




  1. Gartner. "Dataquest Insight: Worldwide Software Market for SOA, Web Services and Web 2.0, 2006-2011." Gartner, Inc., June 2007.
  2. Gartner.
  3. Marianne Hedin. "Worldwide SOA-Based Services 2007–2011 Forecast and Analysis: A Maturing SOA Market Fuels New and Different Demands for Professional Services." IDC, 2007.
  4. Perry Donham. “Modernizing Legacy Applications: Maximizing the Investment.” Aberdeen Group, June 2007.
  5. Donham.
  6. Donham.
  7. Donham.
  8. Donham.
  9. Donham.

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