In recent years, the development trend recorded by IT fruition paradigms such as cloud computing, and the spread of digital platforms and devices for communication and collaboration even on the move, are pushing organizations of all kinds to adopt application modernization of the business to work better, and strengthen competitiveness in each business activity. Projects, processes or application modernization services - as market research firm Gartner explains -, aim to address the migration of legacy systems to new applications or platforms, including the integration of new features, to provide the business the latest features.
More business agility: application modernization and SaaS
Organizations today need to streamline the management of traditional legacy applications, which are often monolithic, and have been stratified and consolidated over time in corporate data centers. The business application modernization allows to adapt to the modern requirements of speed, scalability, flexibility, modularity, modifiability and addition of new features required by digital transformation. In fact, global spending on enterprise-grade application software is projected to grow, exceeding $201 billion in 2019, according to recent Gartner forecasts. But above all, analysts say that long-term growth will be driven primarily by business application modernization, functional expansion and digital transformation projects. "Most of the spending - explains Bianca Granetto, Research Director at Gartner - is going towards the modernization, functional expansion, or replacement, of outdated business and office applications, with cloud-based software-as-a-service".
Application modernization of the business: the heart of the processes
In addition, the data indicates that modernization efforts are focusing on the enterprise applications that are at the heart of the business. Also according to a recent survey by Gartner, 45% of respondents with an understanding of their organization's software strategy report that one of the current top five priorities of IT projects is "application modernization of enterprise core applications installed on premise". And a further 41% indicate that "extending the functionality of enterprise core applications" is one of the top five priorities.
Switching from a Capex to an Opex model
Another fundamental aspect to consider in business application modernization initiatives is the ability for companies to choose alternative IT solutions, and migrate to new IT consumption models. Subscription-based alternative solutions, and particularly the software-as-a-service (SaaS) model, are increasingly being adopted by organizations. Another recent Gartner research shows that such alternative consumption patterns, compared to traditional on-premise licenses, account for more than 50% of new software implementations.
A trend that can also be explained by the fact that, by adopting the cloud and SaaS applications, it is possible to migrate from a Capex model of economic management of the business, based on capital investment for the purchase of hardware and software, towards an Opex paradigm. In this case, you only pay for what you actually consume: this obviously allows you to transfer greater flexibility to your business. In fact, if the initial capital expenditure can be reduced, and converted into operational expenditure, this means that even companies that do not have the critical mass necessary to make large initial capital investments still have the opportunity to implement business application modernization. This way, they can in fact create enterprise-level architectures and infrastructures capable of using all the main latest generation software technologies (microservices, containers, serverless systems), which are increasingly widespread today, and adopted for the development of modern applications and mobile apps.