Legacy modernization: Open Source Software as an Alternative?

If you are searching about legacy migration you might have heard about legacy modernization to open source software (also known as OSS). So have you ever wondered if this would be a reasonable step to take? Maybe you need some more information about open source, first.

Open-source software is the kind of software that provides its source code open to public, so that anyone is able to copy, modify and redistribute it without paying royalties or fees. The code can evolve through community cooperation. Often someone who started an open-source project ends up as a large company. Many producers of OSS offer trainings or Service-level-agreements (SLAs), which is a part of a service contract where a service is formally defined.

Examples of open-source software products are the web-browser Mozilla Firefox and the operating system Linux. The expectation by switching to OSS is most of the times to save money – and it is true: Such products are most of the times for free or really cheap implemented, why license costs can be saved. Nevertheless, adoptions and extensions might be necessary, as well as trainings and other external services. So license costs should not be the only reason to switch to OSS without further investigations.

Other relevant topics when thinking about implementing OSS in a company would be the data privacy and IT security. A lot of questions need to be answered here: Where and how will data be saved or shared and how could the systems be controlled? Might there be a possibility for developers to control the system unnoticed and grab data out of it? All those questions regarding security topics should be verified by experts.

So as you can see: It is not always easy to decide, which software to switch to due to cost reduction or due to just modernize your systems. But don't worry: We will keep on writing about legacy modernization, legacy migration or whatever you want to call it. Please stay tuned and feel free to leave a comment!

Do we really need to think about legacy modernization?

If you hear the term “data migration”, it might send a chill down your spine. It doesn't matter, whether you work as a CEO or as a secretary: sometimes you might feel, that something regarding your work with the computer goes wrong or things just should not be the way they are. Then you maybe find yourself swearing at the computer but anyhow thinking: “Never change a running system”.

But what if you always find yourself in trouble, even if the problems are not that big? So first of all, you might want to figure out, whether a legacy modernization or a migration is necessary for your company and could help you, to get your work done more relaxed.

A good way to start this is to take a look outside your window. Relax and think about the following questions – but please: be true to yourself!

1. Do you still have (enough) technical support for your legacy systems?
2. Do you have more and more problems with downtime? If yes, how does this affect your work?
3. Do you have problems, recruiting new qualified employees, who can deal with your legacy systems?
4. Do you sometimes think, that you are way too inflexible with all your legacy systems and wish for more extensions, interfaces or an improved usability?
5. Do you have to deal with data security issues, because your legacy systems don´t accomplish the standards?

So what do you think right now? Might some of this be true? Is it for real, that you just thought about answering at least one of these questions with yes? Because if you do so, you really should answer our title question with yes, too. In this case, you really should think about a legacy modernization.

What does that mean? Well, you first of all should consider, that changing a running system, might be a good thing. As the American writer Alvin Toffler said in 1970: “Change is not merely necessary to life – it is life.”

If this now has been a kick-off for you, to finally become an interest in the topics related to data migration or architecture migration, it would be a pleasure for us to welcome you as a new follower of our blog. Stay tuned for the next articles, in which we offer you more information about what migration is and how it could look like.

Modernization of our Blog

Dear reader,

Starting now we are going to modernize our migration blog. From now on we will offer you blog entries with information and news about automated migration and related topics, such as legacy modernization, more frequent.

So stay tuned and lets have fun. If you visit us for the first time, it would be our pleasure to welcome you as a new follower.

Your PASS Consulting Team

Smart Field Analysis

Many companies still use old and expensive systems unaware that there are better solutions out there. Similarly, there is always a potential for optimization in all areas of your IT landscape. 

As business consultants, we are committed to ameliorate your infrastructure and processes. Let us guide you and assess your current IT situation and identify potentials for improvement.

For this purpose, we developed our SmartField Questionnaire, which will enable to target inefficiencies in your business. A first series of general initial questions will give an overview of your:

• Architecture: Do you have an up-to-date illustration of the architecture used?
• IT strategy: In-house developments yes/no, self-operation/data center yes/no?
• Criticality: What’s the impact of a system failure on business activities
• Certifications / regulations: What policies and laws does the company have to comply with? 

The following is a step-by-step evaluation of your global operation costs. How much are the data center/servers/operating systems etc. costing you?

The result of the SmartField analysis is a clear assessment of your IT Infrastructures. It shows you what the strengths and weaknesses of your IT systems are and identifies possible solutions for optimization.

If you are interested in taking the questionnaire, please feel free to contact us.

Success Story

Any doubts about migration? PASS Consulting took the challenge and has been very successfully with his migration projects. KfW Bankengruppe, Germany’s third largest bank, trusted PASS to replace its PL/I based system with a Java based system. Here is their feedback:  

“Through this pilot project, the KfW has gained assurance and a new degree of freedom regarding the IT STRATEGY 2020. We now know that a 100% automated migration using the PASS Migration Factory is viable. The results of the migration are sustainable and will be very useful for further development. In addition, the demands we set for code quality and performance were completely fulfilled.” (Volker Scheringer, Director, IT Strategy 2020)

Read the complete success story here.

Risks of Legacy Applications

There is no better idiom that “If it ain't broke, don't fix it” to illustrate the main barrier to IT migration. The attitude “if a system or method works there is no reason to change it” is the enemy of innovation! Why? Do business executives know what that really means for a company? In this article we will go through the main impacts of legacy applications by highlighting the connection between business and IT and seeing the potential savings and benefits companies get from moving far away from old systems.

Inefficient IT Infrastructures

Console Vs Web GUI

Legacy applications provide companies with systems that, even if they work well, are no longer able to adapt to a changing business environment. See for example the problems financial institutions are facing whose core banking system relies on COBOL programs that were built more than 30 years ago. At that time priority was given to security and reliability and although these criteria are still relevant, today systems need to be more flexible agile and innovative. IT inefficiency would consist of the following points:

• Lack of integration:
  Systems integration is the process of linking together different computing systems and software applications physically or functionally to act as a coordinated whole. It is challenging to link together several applications that use different languages and or architectures. If we go back to the banking example, their core system was developed in COBOL, if additionally they have SAP and if they acquire a new CMS in Java all three items must work together. It is possible to do so but it demands complicated workarounds.
  Advantage of Migration:  A Service Orientated Architecture based on software components that can be re-used for different purposes. 
• Lack of scalability:
  The scalability is the ability of a system to handle an increasing amount of work in a capable manner or its ability to be enlarged to accommodate that growth. The problem with legacy systems is that once it reaches its physical limits it’s impossible to it make it faster. This means that if a company has high potential for economic growth is planning to expand its activities; its legacy system is likely to be overwhelmed by new workload. 
• Lack of accessibility:
  Most of legacy applications still use complicated command line interfaces that limit the ways to use a program, as opposed to graphical interfaces that are more intuitive, and easier to use.  Moreover migration with cross platform technology facilitates the development of mobility applications.

In the long run, inefficient IT infrastructures, lower firm’s competitiveness which directly affect its revenue and market share.

Business Continuity 

Will the company have the resources to fix hardware or software problems? As newer technologies emerge, the pool of skills qualified to work on legacy applications shrinks: employees retire from work, old programming languages are no longer taught in universities, or employees would rather work on projects that keep their set of skills updated.

According to a Computerworld survey of around 350 IT professionals, for 50% of them, the average age of their COBOL programmers is 45 or older, 46% of them already noticed a shortage in COBOL programmers. Next to the skills management issue, the lack of qualified employees brings the problem of respecting Service Level Agreements. For instance, in the financial industry SLAs are made over a 10 year time frame or longer. Given the fact that’s it is already difficult to find staff today we can only be pessimistic about the situation 10 years from now.

Unexpected Costs

A common misconception about modernization is that it's often considered as “spending” rather than “saving”. Although migration costs can be significant, firms could think of it as a way to potential savings and potential business opportunities. Leaving the systems in their current state involve direct and indirect costs, often not fully understood.

Cost comparison of a migrated and an old application

• Labor costs:
• Before Migration:
  Workforces play a major role in determining how decisive it is for a company to modernize its IT infrastructure. Companies have an increasingly tough time in replacing people with critical skills – for example maintaining the old applications – retiring from work. If the company uses an old COBOL, RPG or PL/I application, today’s new generation of developers trained in C++, Java or .Net would need an additional coaching to work with COBOL, RPG or PL/I . Hence, as the pool of resources qualified to work on old systems diminishes, the staff training cost increases.
• After Migration:
  In contrast, new applications simplify system management, which means that less staff is required for ongoing support and maintenance. Even implementing new features is cheaper because it is more efficient with modern programming languages. This does not necessarily result in the reduction of operational staff but rather in the reassignment of personal to responsibilities or projects of higher strategic value. 

• Software Costs:
• Before Migration:
  Companies have to pay thousands of dollars in monthly license fees to run HOST applications while cheaper alternatives exist.
  Operation system: zOS for IBM mainframes
  Database management system: DB2 for IBM or other utility programs proprietary for HOST systems
• After Migration:
  Firms reported up to 83% savings by moving from an Oracle/IBM solution to SQL server which is a Microsoft product with license fees. With the open source MySQL it would even be entirely free.
  Operation System: Unix or WindowsDatabase management system: MySQL or often free systems for modern platforms

• Hardware costs:
  Moving from an expensive IBM mainframe to simple personal computers or rack servers is another source of savings. For instance, an IBM AS/400, which is the mainframe/HOST of small companies, costs around $20 000 for four years. Five rack servers with an equal amount of computing power would cost around $5.000.

• Indirect costs:
  Old systems decrease overall productivity and limit firms’ competitiveness. The advantages of modern graphical interfaces (GUI) compared to terminal applications are one example. This leads to indirect costs that take the form of client’s discontents and therefore business loss.

Migrating legacy applications obviously involves costs. Whether the project is handled in house or outsourced, resources must be affected to the different stages of the process: analysis of the old application, selection of the new platform / technology, definition of the migration strategy and the code and testing of the new application.

“If it ain't broke, fix it!”

It is probably better to try to avoid the problems related to aging platforms in the first place, rather than trying to fix them once they arise.

To compare the relative costs and benefits of either keeping an old application or migrating it, organizations must review their expectations considering the various advantages and disadvantages each solution brings.

A case study by Alinean analyzes the cost reduction of migration projects conducted at two companies from two different sectors: one in financial services and one in manufacturing. The analysis compares the total cost for application migration over four years to what it would have cost to keep the old version (evaluating initial costs, annual support for new equipment and software, and labor expenses).

In both cases, the cost of implementing a new system was much cheaper than the cost of keeping and still maintaining the old one. The financial services company was able to reduce hardware costs by 72.6%, software cost by 78.8%, labor costs by 21.10%, and facility costs by 39.70%. With a total initial investment of $9,363,552 (migration project, hardware and software costs) the company reduced annualized operating costs by 46.4%. For the manufacturing company, the results are even more outstanding. The company reduced hardware costs by 22.9%, software costs by 92.1%, labor costs by 47.6%, and facility costs by 45.9%. With a total initial investment of $6,136,000 the company reduced annualized operating cost by 70.9%. (See the complete case study here).

If the IT department can be isolated from business concerns, application migration emphasis the role of IT projects in the overall business effort of a company. From a financial point of view, IT migration allows great potential savings (that can also pay back the initial investment). From an organizational point of view IT migrations improves processes and hence better support organizational objectives.

Migrating From Legacy Applications?

Legacy applications are firms’ applications that are based on old and sometimes outdated programming languages. For most large companies, they are an everyday challenge. Usually found within critical applications, legacy systems continue to be used as they still deliver value performing daily tasks even though newer and more efficient methods exist.
A recent survey from Nexaweb Technologies revealed that, out of 750 IT professionals, 88% claimed to have a problematic legacy application burden, with 57% of which categorize their problem as “serious” or “very serious”.

Buy, Develop or Migrate?

To deal with legacy systems companies can take different paths:  buy or develop a new application, or migrate. They have to chose which approach should be followed according factors such as size of the project, the level of customizations, how critical the application is, and maintainability.

With buying a new system, companies have to keep in mind that each business has its own specifics and applications rarely meet the exact needs of firms. For that reason further developments at an extra cost are required for customization. Development of a new application allows more flexibility and results in a product that exactly fits the customer’s needs. Nevertheless the bigger and the more complex the application is the more difficult it will be to redevelop. By purchasing or developing, companies need to carefully test the replacement and the risk of errors, bugs, or misconceptions is high (unlike migration with Service Orientated Architecture (SOA).

Migration differs from the two previous methods in that it actually takes the old application and translates it into a modern version. It also reuses the original systems’ business logic which guarantees that the migrated application will be functionally identical to the original. The legacy applications have been operational for several years or even decades, they are tested and work 100%. With the right migration code and cross platform technology, the migrated application will be correct, plus with the Build to Order technology the modern version will exactly fit company's expectations.

Types of Migration

Companies can perform three types of migration from 0% to 100% automatic. Manual migration is about re-writing all the lines of codes by hand. Imagine here one developer sitting on a desk with two screens, in the first he reads Cobol and in the second he writes Java. That solution makes sense for very small applications, probably less than 10 000 lines of code. In contrast, with automated migration a program reads Cobol and writes Java. What is interesting with this method is that automation makes the process both faster and safer (see previous post for more details about automated migration, cross platform technology and SOA).

Legacy applications are generally huge (typically millions of lines of codes) and often complicated (given that they are critical), a program will translate faster and make less mistakes than a developer. Next to the “line-per-line”-approach, automatic migration can also use smart patterns to detect and change programmatic concepts. In doing so, architectural changes according to the program structure can be made and the converted program becomes much more flexible and maintainable. Somewhere in between, there is semi automated migration. A program will automatically migrate parts of the code and developers will manually migrate what’s left. For example if some concepts in the original system can not be translated with a feasible effort, the migration tool will leave it to the developers. The more complex and critical the application is, the more automated the migration should be.

IT migration as a strategic move

Even though IT execs acknowledge the need of moving away from legacy applications, and that relevant technology exists, it is what business executives think that matters. They are those who decide on the funding of migration projects but they are also those who don’t particularly see the challenges of IT. IT is often seen as a technical function hence the connection between IT modernization and operational concern isn’t clearly established.

Besides, in these times of economic insecurity, investments are reduced. The problem with doing so is that it is likely to offer market share to competitors who look at out of the box solutions. In 2008 Diamond Management and Technology Consultants analyzed the performances of 400 companies during the 2001 recession. According to their results companies that made the strategic decisions by being "smart about their cuts" and "successfully improving the design of their business", increased their margins by 20%. The question in then: Is migration a strategic decision?

Let’s illustrate the need of modernization with an example in the mobile phone industry: Around a decade before Apple, Nokia spend millions of dollars on research to develop touch-screen devices very similar to smartphones. Although the technology was in their hands they redirected efforts from smartphones to basic phones. In 2007 Apple came up with the iPhone and the success we all know. By sticking to old technologies Nokia progressively lost its position of world's largest maker of mobile phones. Its share price went from US$40 in 2007 to less than US$3 in 2012. In Contrast, in 2007, when Apple released the iPhone its stock was selling at about $85. By the time Job resigned in 2011, it had risen more than 350 percent. In June 2012 Nokia’s CEO even had to admit that the problems the company was facing were mainly due to the failure to anticipate the changes in the industry.

In the same way, IT modernization and the risk of aging platforms is an urge that execs should be aware of: Migration is a must; the question is not if but when!