Dilemma of legacy technology
Companies are migrating applications to the cloud, looking to shrink or shut down their legacy data centers. Many quickly realize that they have a portfolio of legacy applications that are simply too expensive and too risky to migrate to the cloud. However, they have unrealistic expectations regarding the possibilities of these applications, which leads to a dilemma in deciding how to manage them.
As companies consider what to do with their old domains that they decide not to migrate to the cloud, they expect these applications to be short-lived and, within a few months or years, they will be modernized and moved to the cloud. They don’t expect the applications or infrastructure they run on to evolve, so they view them as frozen, like a block of ice.
However, they recognize that the block of ice will melt, so they are adopting a strategy of aggressively reducing the costs of operating these areas, including migrating the talent that supports them to a cloud environment. Think of it as a harvesting strategy. They extract as much value as possible from these assets and move people and investments into more strategic cloud environments.
The problem is that their expectation that legacy apps will be short-lived is based on an underlying faulty assumption. This realization often comes after a company has made multiple attempts to migrate domains to the cloud and failed, or when detailed migration plans outline costs and risks. Once they recognize that the cost and risk are too great to justify migration, their view of the likely length of successions changes.
The reality is that inherited estates can persist for decades. To fully appreciate this reality, you need look no further than previous IT architecture migrations. After migrating their compute environment from the mainframe to the client server decades ago, some companies still use legacy domains on IBM and Unisys mainframes for mission-critical work.
Because enterprises need to access data in their legacy applications, applications must evolve over time – not at the same rate as new applications, but they must evolve with organizational operations and the digital applications that access their data.
Once companies recognize that their legacy assets generate and host vital data, and that they perform vital and often critical functions, it leads them to change their perspective on how to manage legacy assets. Because these domains will need to evolve with other technologies as business needs change, companies are finding that they cannot put legacy domains into a freeze state.
This, in turn, challenges the harvesting strategy of moving resources and talent from legacy to the cloud. Instead, companies must undertake an investment strategy for their legacy assets.
To be clear, the posture of investing in legacy is modest compared to investing in new cloud environments. However, it quickly becomes apparent that they need to make ongoing investments in legacy areas due to many factors, which range from ever-evolving security threats to the ongoing need to access vital data and evolve critical functionality.
As reality sets in regarding the need for a vision and investment strategy, it becomes clear that moving legacy talent to cloud environments creates the threat of a death spiral for legacy assets.
Threat of the death spiral
The challenge for companies in adopting and maintaining a legacy investment posture is talent. It’s no surprise that IT professionals are looking for interesting, rewarding, and well-paying careers. As a result, many IT professionals supporting legacy domains want to move to more exciting and higher paying cloud environments. To attempt to reverse this dynamic is to deny the force of gravity.
Talented IT professionals always have career options, including the ability to transfer within the company or leave the company for better opportunities elsewhere. Unfortunately, today’s extremely tight job market exacerbates this situation, leaving companies facing a looming cliff of outgoing seasoned IT professionals who have supported their legacy environments.
Over time, and often much faster than expected, companies struggle to retain quality talent in place to support their legacy assets. This struggle puts them in an unacceptable position as the risk of critical application failures reaches an unacceptable level. The most obvious and frequent examples of failure are in the area of security. However, the inability or frustration to extract data in a timely manner and the need to evolve critical features weigh more and more over time.
Over time, the dual driver of the need to increase institutional focus on rapidly changing cloud environments, combined with the death by a thousand cuts of the death spiral due to the loss of legacy talent, drives companies to outsource their legacy assets.
This transfer of inherited assets to third-party service providers has been happening for years. But that will accelerate as companies move forward with their cloud computing and modernization strategies.
The thinking of the companies is that by moving these domains to a third-party provider that specializes in legacy applications and infrastructure, companies can then direct their energies and internal investments to the digital or modern domains that are their “future”. At the same time, the idea is that they may be able to save money and reduce the risk of exploiting legacy domains.
However, it is not that simple. The selection of a third-party service provider for heritage assets now involves tactical and strategic issues. Third-party options have changed and evaluating vendors is now more complicated than before.
First, due to the need to modernize and transform legacy assets, a business must find a service provider with the knowledge and expertise to move to the cloud. By this I mean finding a company that has the ability to transform legacy heritage, but is also willing to partner to achieve the desired outcome. This is essential, and it will also be prudent to incentivize the service provider to achieve this result. Many cloud migrations fail – meaning the cost goes over budget and the migration takes much longer than expected – due to a lack of understanding of the details of the desired outcome. Well-documented expectations and incentives will avoid potential failure.
Additionally, the vendor selection process is more complicated today than in the past, as there are now two different types of legacy service providers. In my next blog, I’ll explain the differences between the two types, how those differences affect their customers, and how to choose a provider with the ability (and willingness) to transform legacy heritage.