IT Budget Constraints Drive Application Modernization

Michael Vizard
Slide Show

The Case for Application Modernization

In IT, the symptoms are the proliferation of servers and storage systems. The actual disease is all the applications that the IT organization is trying to support.

As previously noted, most IT organizations have saved money by cutting back on comparatively simple stuff, such as eliminating excess server capacity by adopting virtualizaton, so any additional savings will have to come from much more difficult IT projects.

The one thing that holds application modernization projects back, however, is that these types of large-scale projects are perceived as overly risky. But in the face of a lackluster economy, a new survey of 220 global IT executives conducted by Forrester Consulting on behalf of Hewlett-Packard suggests more IT organizations appear willing to take on the risks associated with an application migration in order to accommodate substantially lower IT budgets that appear to be with us for at least the next several years.

Under the guise of application modernization, many IT organizations are now either consolidating applications as part of an effort to not only reduce the number of applications they now need to manage, but also move those applications to less costly servers and middleware infrastructure.

According to Larry Acklin, HP product marketing manager for application services, the degree to which this is happening varies widely by application workload. But whenever possible, IT organizations appear to be trying to reduce their dependencies on proprietary platforms.

The providers of such proprietary platforms take issue with some of the analysis that results in many companies migrating applications to Intel-class servers, but the trend away from proprietary platforms continues unabated.

The biggest challenges, however, are first getting application stakeholders to give up their applications and then actually getting the actual funding required to modernize the application portfolio. Unlike virtualization, where the benefits are almost instantaneous, business executives are reluctant to fork over hundreds of thousands of dollars in a tight economy even when it means potentially saving millions down the road.

Surprisingly, the Forrester study shows that adding new functionality, in addition to cutting costs, is a primary motivation for application modernization. In fact, in many cases application modernization equals replacing custom applications with packaged application software. But when customers opt not to replace applications, the study also finds that most are reluctant to migrate to a new programming language, which Acklin says is an indicator that most of the application modernization focus is on replacing aging IT infrastructure typically associated with high maintenance fees.


Acklin says HP has moved to mitigate a lot of those concerns with services that substantially reduce the risk associated with any migration. But before attempting such projects, he says IT organizations need to sit down with business leaders to map out the potential risks versus rewards for the business in order to determine where application modernization makes the most sense.

Despite legitimate concerns over cost and risks, most businesses today are sorely in need of some form of application consolidation, without which the fundamental economics of enterprise IT won't change in any lasting way.

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Add Comment      Leave a comment on this blog post
Jul 9, 2010 10:01 AM Doug Doug  says: in response to Doug

Bad link, should be http://ht.ly/29nC0, sorry

Jul 9, 2010 7:46 PM Doug Doug  says:

Mike, this is a great post.  In fact, I just referred to it and linked from a post I just put up (http://www.virtusa.com/blog/index.php/2010/07/financing-the-rationalization-renaissance/).  We have a slightly different view but the problems, benefits and project type are the same.

Thanks for posting.

Aug 4, 2010 3:39 PM GIMD GIMD  says:

Great post Mike!

I totally agree with the point of the complexity faced when trying to convince the apps stakeholders to give up their apps as well as

getting the funding approval to modernize the application.

On this topic, there's a series of posts that provide some tips/steps to overcome the complexity of justifying application modernization at this blog: http://blog.lansa.com/application-modernization/how-to-justify-application-modernization-to-your-cfo

Thanks for sharing this.


Aug 23, 2010 8:54 AM wendy wendy  says:

While the cost of consolidation via virtualization can be immediately recognized in many cases- it wasn't always that way- the idea of adding virtualization to the datacenter was a risky proposition. 

With any new trend, there's a learning curve.  Many companies will find it challenging to address the business impact of app consolidation and thus the  app owners less willing to engage in the risk for the long term payoff-- without that data and visibility.   Companies like, OpTier, deliver the application visibility across the datacenter-- so IT teams and app owners alike can see the impact of app changes, not just from the neworking or database perspectives ( as an example ), but across the datacenter.

Traditional management tools will give snapshots of the impact by functional area.  Solutions that look at the whole picture will help IT justify and implement changes, while allowing app owners visibility to the performance of their app before and after the changes.

Will this trend change the APM and BSM space and expectations?  Will be a fun trend to watch unfold.

Sep 11, 2012 8:09 PM Willie Willie  says:
It is fascinating to see how the economy is making it more economical for businesses to make changes like this. In an economy where the future looks bleak for the longterm, people have to begin doing more and more strategic structural changes. It will be fascinating to see what other changes people become more open to in the future. Reply

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