Top 8 Legacy System Modernization Approaches for 2025 and How to Choose the Right One for Your Business

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Did you know that 44% of CIOs consider legacy systems as the major roadblock to business growth? This could be due to many factors – operational inefficiencies, downtime, high maintenance costs, hefty energy consumption bills and many more.

These operational and financial challenges are driving enterprises toward legacy system modernization. In fact, a survey reveals that 87% of IT decision-makers believe modernizing legacy systems is essential for their success.

To help the CTOs and key decision-makers with the right strategy, we have compiled the top 8 legacy system modernization approaches that will be revealed here. You will also discover the key essentials of choosing the right strategy for your business.

Before diving into that, let’s first take a moment to understand the process.

What is System Legacy Modernization?

Legacy system modernization means revitalizing old software and applications to meet today’s technology and business needs. This does not necessarily change the operating systems or applications. In most cases, legacy hardware is the main roadblock, making business-critical applications prone to failure.

Modernization upgrades these systems, moving old systems to new platforms. This, in turn, streamlines IT operations, lowers maintenance costs, and boosts performance.

These improvements also make systems more adaptable to future technologies. Companies that modernize are ready to take advantage of next-generation technologies such as AI, big data, and cloud computing.

When to Modernize Legacy Systems?

Recognizing the early warning signs is the important first step. If overlooked, they can disrupt your operations and jeopardize business continuity. Check out whether these challenges resonate with you:

• Does your system rely on outdated hardware that vendors no longer support? If so, you could be exposed to potential downtime and security threats.
• Searching for replacement parts is a challenge. Finding skilled experts can be extremely difficult. Under these conditions, maintaining your legacy system functioning becomes not only difficult, but costly.
• Legacy systems frequently face challenges in integrating with modern software, resulting in data silos and hindering cross-functional collaboration.
• Frequent outages, downtime, or crashes not only damage brand reputation but also hinder productivity.
• Legacy systems frequently lack essential security measures and do not align with contemporary compliance standards.
• Are your critical processes taking a lot of time due to outdated hardware? Now is the moment to look past the outdated infrastructure.

When your infrastructure presents one or more of these challenges, embracing legacy system modernization becomes essential.

8 Legacy System Modernization Approaches

Legacy system modernization helps organizations to stay efficient, competitive and future-ready. Let’s look at the top legacy system modernization approaches that decision-makers should consider.

1. Rehosting or Lift and Shift

Rehosting or “Lift and Shift” is the process of redeploying application components to a different infrastructure (on-premises or cloud) without altering the code or features. Only the underlying hardware platform gets replaced with a modern infrastructure. Legacy applications and their core functionalities will remain as they are. This strategy is often used to quickly migrate legacy applications to the cloud and leverage its benefits without the need for code changes.

Pros:

• Cost-effective and quick legacy modernization approach
• Minimizes code modifications, reducing project complexity
• Faster and less risky compared to other strategies
• Ensures optimum business continuity

Cons:

• Does not address underlying code issues

Best for: Organizations looking for a speedy, cost-effective, and frictionless legacy system modernization strategy that does not require changes to the underlying application code.

2. Refactoring or Re-Architecting

It’s a legacy system modernization approach of restructuring and optimizing the existing code without changing its existing behavior. Refactoring enhances system flexibility, allowing for easier adaptation to current conditions. Companies transitioning from containers to microservices are advised to use this strategy. Some changes are small, others large. But all contribute to a more robust system.

Pros:

• Enhances code quality and maintainability
• Aligns the codebase with current software development practices

Cons:

• It can be time-consuming and costly
• It may not be sufficient for systems with fundamental architectural issues

Best for: Organizations looking to enhance system flexibility and adaptability.

3. Rebuilding or Rewriting from Scratch

Rewriting is the process of developing a new application from scratch while keeping the requirements and functionalities of the legacy system. This allows the opportunity to leverage modern frameworks, codes, and tools.

Pros:

• Allows for the creation of a highly efficient, state-of-the-art application
• Developers can avoid past mistakes and implement best practices

Cons:

• Time-consuming and expensive
• Risky; as it needs a lot of testing to match the previous functionalities

Best for: Businesses that require an entirely new, modern application created from scratch while retaining the essential functionality of the legacy system.

4. Encapsulation

Encapsulation reuses core system components while removing legacy code. It links these components to new access layers through APIs. This approach to updating old software creates a fresh interface for existing parts, tapping into the app’s capabilities. It often requires careful planning as some parts may need more work than others. If your goal is just to update the interface, encapsulation works well.

Pros:

• Reduces risks by preserving legacy code and data
• Allows for gradual modernization without disrupting operations

Cons:

• Limited improvement in performance and scalability.
• May not fully leverage new technologies.
• Doesn’t fix maintenance issues

Best for: Enterprises that wish to update their legacy system’s interface without making extensive changes to the underlying code.

5. Application Program Interface (API)

API modernization creates interfaces for legacy systems to work with new apps and services. It expands old system capabilities without major code changes. The process varies in complexity. Some interfaces are simple, others intricate.

Pros:

• Enables integration with modern systems and platforms
• Extends the functionality of the legacy system without major changes

Cons:

• Does not address underlying code or architectural issues
• Potential security risks if not properly managed

Best for: Businesses that need to integrate legacy systems with new applications or services without changing how the old systems work.

6. Cloud Migration

Moving legacy systems to the cloud shifts apps and data to cloud infrastructure. This improves scalability and flexibility while cutting costs. It often boosts system performance. The transition can be gradual or swift, depending on system needs.

Pros:

• Enhances scalability and flexibility
• Reduces infrastructure costs and maintenance

Cons:

• Potential data security and compliance issues
• Requires careful planning and execution to avoid disruptions

Best for: Organizations seeking to enhance scalability, flexibility, and reduce costs by moving legacy systems to the cloud.

7. Service-Oriented Architecture (SOA)

Service-Oriented Architecture (SOA) breaks legacy systems into smaller, reusable services. These can be developed, deployed, and maintained separately. SOA improves system flexibility and scalability. It eases integration with other systems. Implementation complexity varies by system size and structure.

Pros:

• Enhances system flexibility and scalability
• Facilitates integration with other systems and technologies

Cons:

• It can be complex to implement and manage
• Requires significant changes to the existing system architecture

Best for: Organizations seeking to enhance scalability and flexibility and reduce costs by moving legacy systems to the cloud.

8. Buying a New Application

Lastly, buying a new application is another viable legacy system modernization approach where businesses replace their old system with a new application. This approach involves selecting a solution (for example, cloud-based solutions such as SaaS) and substituting it with the current application.

Pros:

• Typically, a new application is built with modern technology and shows better performance
• Modern application provides better security features

Cons:

• Implementing a new application comes with a significant initial investment
• Integrating with existing processes can be complex
• Requires a lot of time, making it disruptive to business operations

Best for: Best for: Organizations looking to replace their legacy systems with entirely new, modern applications, such as cloud-based solutions (SaaS).

How to Choose the Right Modernization Strategy?

Before considering the best strategy for your enterprise, it is important to evaluate what your business actually needs. So, before you jump into any strategy, there are a few things you must ponder.

1. Evaluate Your Business Needs

Begin by assessing what your organization truly requires. Different modernization strategies come with varying levels of complexity, cost, and risk. Understanding your specific needs will guide you in choosing the right approach, whether you’re aiming to improve performance, reduce costs, enhance security or add more features.

2. Consider the Impact on Operations

Modernization approaches that involve modifications to legacy software, or creating entirely new systems, often necessitate large-scale retraining of both administrators and end users. This can create significant operational challenges, as employees must balance training with their regular tasks. The result is often a drain on resources, productivity, and time, which can ultimately impact your bottom line.

3. Weigh the Costs and Risks

While rearchitecting, recreating, or purchasing new applications might seem appealing due to their added features, these strategies are time-consuming, costly, and carry a high level of risk. Furthermore, the process of migrating data from an old system to a new one can be lengthy and cumbersome, further disrupting operations.

4. Don’t Overlook Legacy System Reliability

Your legacy systems may be some of the most reliable, secure, and high-performing components in your data center. However, they often run on expensive, proprietary hardware platforms. While changing the application might not always be necessary, replacing outdated or costly hardware may be a more practical solution.

Changing the legacy application is not always necessary – but changing the hardware can be.

Lift and Shift emerges as a standout for businesses looking to move quickly with minimal risk. It is one of the fastest legacy system modernization approaches, without deep technical expertise overall. In fact, your end user will not even notice that the underlying hardware platform has been replaced.

The Quick and Economical Alternative to Rewriting the Whole Application

For organizations seeking a balance between legacy system modernization and minimal disruption, solutions like the Charon emulator offer an attractive alternative. It works on principles of lift and shift, emulating the existing hardware environment and creating a similar environment. The existing applications run as they did on the previous hardware – more efficiently and reliably.

There is no need to rewrite or modify software. With Charon, enterprises can emulate their SPARC, PA-RISC, VAX, PDP, and AlphaServers and extend the life of their legacy applications. The original code and functionality stay the same, running on more reliable hardware. This saves costs and time usually spent coding and testing new environments.

Conclusion

Legacy system modernization can transform operations and boost efficiency. Upgraded systems perform better, work well with new tech, and help businesses adapt quickly to market changes.

One of the notable legacy system modernization approaches is lift and shift, which is executed by the Charon emulator. With Charon, the organization can enjoy the best of both worlds. It lets old apps run on new hardware without major code changes. This cuts downtime and lowers risks compared to full system replacements. It eases the shift to advanced setups.

Are you considering modernization? Our team can guide you through the process. They’ll assess your current setup and suggest practical solutions. Every business has unique needs. Our approach reflects that.

Ready to transform your legacy systems?

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Frequently Asked Questions (FAQs)

1. How to approach legacy modernization?

There exist several legacy system modernization approaches. Options range from lift and shift, rehosting and replatforming to refactoring or full system replacement. The choice depends on the organization’s goals and resources. Some methods are less disruptive than others. Bringing in expert insights can significantly enhance this process, as specialists are equipped to develop a tailored legacy system modernization strategy. The modernization journey varies for each organization. It may be quick for some and lengthy for others. Careful planning is crucial for success.

2. What are the 7 R’s of modernization?

The 7 R’s of modernization are strategic options that organizations can consider when modernizing their legacy systems:

1. Retain: Keep the existing system as is, often temporarily.
2. Retire: Decommission the system if it no longer meets business needs.
3. Rehost: Move the application to a new environment without significant changes (lift and shift).
4. Replatform: Make minor adjustments to optimize the application for a new platform.
5. Refactor: Restructure the existing code to improve performance and maintainability.
6. Rearchitect: Redesign the application architecture to better align with modern practices.
7. Replace: Build a new system from scratch to meet current requirements.

3. What is the example of legacy Modernization?

An example of legacy system modernization is how The Taiwan Power Company (TaiPower) was struggling with their DEC Alpha computers. With Charon-AXP by Stromasys, they modernized their systems by replicating the functionalities of their legacy applications without relying on the failing hardware.