State of Application Strategy 2021: Modernization Mania

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Lori MacVittie
Published March 17, 2021

When We (that’s the corporate We) talk about digital transformation we use a framework consisting of three phases. This framework maps the technology evolution that accompanies the business journey from physical to digital models. Each phase is marked by a business initiative that is enabled by technology.

The second phase, Digital Expansion, is marked by modernization. In this phase, business is expanding its digital presence. The most obvious of these efforts is seen in the digital experiences offered online but is not restricted to websites and mobile apps. This phase includes digitization of products and is in part the cause of a rise in the rapid increase in “connected” devices and the apps that operate them that create the urgent need for an Edge 2.0 platform.  

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Which is why the term modernization has ramifications beyond that of a new website. Modernization is how organizations create seamless experiences that span products and processes. Based on our research, a lot of enterprises are doing it.

Modernization Mania

Over half (56%) of respondents told us they are modernizing applications because of digital transformation initiatives. Modernization is necessary because many of the monoliths the enterprise relies upon for core business functions can’t present the kind of interface consumers expect.

Modernization is not a new idea. Organizations have been modernizing monoliths since before I was in college. The significant contribution to the enterprise app portfolio by client-server and three-tier web apps are a testament to modernization. Many of these apps were created solely to provide access to existing, monolithic core business applications. Today, the growth of mobile and container-native applications can be attributed, in part, to modernization.

Indeed, the data bears this out. Organizations are primarily modernizing applications by extending them with more modern counterparts—container-native apps and APIs. 

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When we dig into some data on the deployment of applications in containers, we see the impact of modernization. Those organizations operating in the latter phases of digital transformation are twice as likely to be running more than half their application portfolio in containers.

Modernization Impacting the Application Portfolio

We also see a significant shift in the enterprise portfolio. Not a dramatic increase in mobile and container-native applications, but a serious decrease in the percentage of aging, traditional applications. Both client-server and three-tier web applications make up a much smaller part of the enterprise portfolio this year.

A rarely talked about but essential activity of modernization is a portfolio audit. These audits discover duplicated functions that can be eliminated as well as business applications that can now easily be replaced by a comparable SaaS offering. Certainly, some of the growth in modern applications can be attributed to modernization, but there is a greater impact on the portfolio from organizations cleaning up and streamlining their portfolio. 

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Methods Are Mostly Additive 

While refactoring remains one of the most loved terms in technology marketing today, the data tells us it is not the most popular means of modernizing applications—unless you’re a technology company.

When we looked at how enterprises were modernizing, we discovered that nearly half (44%) were using only APIs (61%) or modern components (54%) to expand the digital presence of their portfolio. Companies in financial services, utilities, manufacturing, and telecommunications were all more than twice as likely to use APIs or modern components over refactoring.

This should not be surprising. Though many technologies are considered quite old by technology standards, firms operating in well-established and mature industries have been operating applications for longer than I’ve been alive. That’s a long time, I’m not ashamed to say. Thus, the cost and effort to refactor core applications is significantly higher than it would be for a relatively young technology company.

Still, it’s good to note that all four methods of modernization—including lift and shift to the public cloud—are on the table when organizations modernize. Reduce, reuse, and recycle would work well for an application modernization strategy:  

  1. Reduce the number of applications in the enterprise portfolio with a thorough audit. Eliminate redundancies and adopt SaaS equivalents when possible.  
  2. Reuse proven, traditional apps by extending them with APIs and modern components that enable seamless digital experiences and connectivity to third-party ecosystems.
  3. Recycle existing logic by refactoring into new applications, effectively modernizing access and operational models to improve the speed with which new features and security measures can be delivered.  

The Implications of Modernization

Long term readers will recognize at this point that changes in application architectures have significant impacts on every other technology and, in particular, application delivery and security technologies (the technologies formerly known as application services).

But it isn’t just the changes in application architectures that are driving change across the technology spectrum. The way in which applications are being stitched together to deliver seamless digital experiences is disrupting existing methods of monitoring and giving rise to a new kind of analytics. Automation and orchestration are critical capabilities needed to manage the increasingly multi-cloud portfolio, and organizations are struggling with the tools they need to do it.

There’s more, of course, and we’ll dig deeper as we continue to explore the State of Application Strategy 2021. In the meantime, be sure to check out more about modernization in this year’s report