The pandemic has accelerated the trend of an industry-wide migration to the cloud with a subsequent suspension in IT investments towards on-premise capabilities. This came with a concurrent increase in the intent to invest and deploy solutions that enable the smooth function of remote/hybrid working, especially on public-cloud infrastructure and cloud-based security solutions. However, CIOs have realized that to further ensure business continuity, they will need to focus on optimizing for efficiencies by adopting a Cloud Application Modernization strategy that oversees factors such as investments, impact, level of urgency and risks involved. Formulating a full-proof game plan to manage the massive amount of change that comes with such a large-scale transformation, will help them further in building a successful application modernization roadmap. Around the same, Roop Singh, Chief Business Officer, Birlasoft shares his views on why businesses should focus on cloud application modernization, steps to keep in mind, top factors to consider in the application of a cloud modernization strategy, amongst others.
- Why should businesses focus on cloud application modernization?
The enterprises are rushing towards a revival, post the Coronavirus (COVID-19) pandemic. They now need to be more agile and equipped with modern, future-ready infrastructure and applications. Legacy application architectures are increasingly growing obsolete in today’s digital value chain. The enterprises are increasingly looking towards a new framework for staying competitive in the market. Cloud Application Modernization allows enterprises to move away from a monolithic application architecture (for example, the traditional client-server-database model) to one in which applications can be deployed as a collection of independently functioning, self-contained units over public or hybrid multi-cloud.
The evolving digital needs of customers and the introduction of viable, economical, self-sustaining infrastructure models that are better suited to today’s technological change are the primary reasons for enterprises focusing on cloud application modernization.
According to a study, over 70-80% of CIOs report that their IT budgets are tied to legacy spends. The legacy systems consume almost 74% of the IT spend. The cloud application modernization not only brings the cost benefit but also unlocks the IT budget, allowing room for innovation and exploring new avenues for business expansion.
- What are the certain steps that businesses should keep in mind while building their cloud application Modernization roadmap?
To avoid any kind of failure in the Legacy Application Modernization program, enterprises need to have a clear picture of the requirements, risks and benefits involved. The CIOs must be prepared for the massive change that comes with such a large-scale transformation. Here are the four essential steps that businesses should keep in mind while building their cloud application modernization roadmap:
- Application Migration Portfolio Assessment: The first thing enterprises must do is to map their existing application portfolio along with the dimensions of migration/modernization complexity and the business value associated with it. Some enterprises might require rationalizing their portfolio before modernization. They need to be clear on the following:
- Is the application (or its parts) ready for cloud integration?
- How does the workload vary by time and geographies?
- What are the current architectural and performance considerations, and how do they stand against modern benchmarks?
- What is the net value delivered by the existing application portfolio, and how satisfied are the customers?
- If there are upcoming version releases and upgrades along with the continuous improvement strategy, then how will the modernization trajectory take care of those?
- Identifying the 5 R’s: The next step is identifying the 5 R’s of application modernization – Rehosting, Refactoring, Re-platforming, Re-building and Re-placing, prioritized from lowest to highest in terms of transformational change that fuels these approaches. For example, if a service was deployed a decade ago when smartphone penetration was relatively low, re-platforming might become an essential part of the application modernization roadmap. On the other hand, rearchitecting will make more sense if a cloud-native deployment is needed. Each of these options will require a proper strategy to maintain the target operating model’s application, in conjunction with decoupling (A process of breaking down a monolithic application and identifying constituent capabilities and services that facilitate various actions in the business’ digital value chain).
- Measure the variables against the benchmarks: The application modernization must measure change along with the variables they aim to improve and set new benchmarks for attaining agility, scalability and resilience along with an enhanced security and risk management strategy. For example, if a traditional bank is modernizing its core banking services through re-platforming, it must adopt forward-looking metrics like engagement times, reduction in common service requests along other channels. Simultaneously, the CIO’s must keep track of modernization efforts.
- Define Your Target Operating Model: While defining the application modernization roadmap, the CIOs should consider ownership of microservices, ownership of configuration and management of production platforms in their newer target operating model. The target operating model should also fit-in with the dimensions of the application portfolio – will you choose a CX-driven operating model over a data-driven one? What functions will be outsourced? How will the selection affect the sequence in which you engage the levers in the modernization process?
- Many companies are spoilt for choice when it comes to settling on a cloud migration strategy. In your opinion, how can these businesses solve the dilemma of excessive choices – cloud migration & modernization strategy.
For most of the enterprises, the first and foremost challenge in modernization of cloud application is the problem of choice. Over 2/3rd of CIOs prefer working with multiple providers to avoid vendor lock-in. However, only a few of them are able to allocate the spends evenly to make the most of cloud application modernization. To overcome this dilemma, CIOs will have to ‘rightsize their way to the cloud’ by thoroughly examining the computing and storage practices within the company.
- According to Birlasoft, what are the top factors to consider in the application of a cloud modernization strategy?
The top factors that we at Birlasoft consider in the application of cloud modernization strategy are:
- Modernization Analysis
- Risk Factors: As a business, it is vital for an enterprise to consider the risk factors associated with application modernization. In the case of modernizing multiple legacy applications together, CIO must assess the time required to modernize each application individually. Also, when the enterprise has countless lines of code, they should handle the code with extra care. Apart from these, they also need to consider the operational risks that arise during modernization.
- Expenditure Review: Legacy application modernization is not an easy task. So, it becomes essential to perform an in-depth analysis of the expenditure. It will help the enterprise identify if the legacy application modernization process will be profitable or not. They need to assess the costs of modernizing the legacy applications and perform the following cost analysis:
Maintenance cost analysis: Estimate infrastructure maintenance costs and calculate maintenance spending by Constructive Cost Model (COCOMO).
ROI analysis: Calculate the Return on Investment (ROI) to assess the enterprise’s current situation and take appropriate decisions.
Infrastructure cost analysis: Evaluate and calculate the IT infrastructure costs. It will help outline how much to allocate for the infrastructure.
- Skillset: The enterprises must take into account the existing skill set that the team possesses and must evaluate if it needs upskilling while deciding on an appropriate strategy for cloud migration. Importantly, low-cost public cloud solutions are becoming popular due to lower costs, better features and easier integration. This has led to the market moving towards a hybrid-cloud model, which necessitates enterprises to develop the skills needed to manage a hybrid-cloud setup.
- Effort: The CIOs must analyze the expected benefits of the cloud migration strategy with respect to the efforts that are required in implementation. Some of the steps involved in cloud application modernization are not easy to implement and might not deliver the kind of results that the CIOs expect. Thus, it is extremely important to choose a right strategy that is aligned with the objectives of the enterprise.
- Operational Savings: A well-thought-through migration strategy will not only bring about significant reductions in costs but will also improve operational excellence. This is one of the main attractions of cloud migration as it is driven by higher utilization rates and lower unit costs.
- Resilience: Another major advantage of cloud migration is operational resilience. The Coronavirus (COVID-19) outbreak made the enterprises realize the futility of on-premises solutions and that they must switch to cloud solutions to ensure continuity, even while working remotely.
- High Degree of Security: The older systems are becoming easy targets of malware and security breaches. This may be due to older applications are incompatible with contemporary security standards and authentication techniques. Legacy systems are exposed to increased risk due to poor application support, lack of security patch updates and lack of compatibility with upcoming security standards. This makes application modernization important as it will significantly reduce the security risks that older systems represent while adding value to the enterprise.
- Birlasoft puts focus on 5R’s of cloud migration- Rehost, Refactor, Re-platform, Rebuild and Replace. Could you share more information on these elements?
- Rehost: Most of the cloud-spending is bound to come from ‘slow and steady’ enterprises that have only toyed with cloud migration strategies before. These enterprises are conservative in approach and have just started to embark on their cloud migration journey. Rehosting (lift and shift) is a widely chosen strategy for such enterprises due to the relatively low migration effort. The existing applications that run in are simply copied to a cloud provider.
- Refactor: It requires enterprises to build their applications from scratch to develop cloud capabilities, which might not be feasible with their current set-up. The plus point with Refactoring is that it is more compatible with future versions and contributes heavily towards building business resilience.
- Re-platform: A re-platform migration is the middle ground between ‘Rehosting’ and ‘Refactoring.’ It’s similar to rehosting applications on the cloud, but it does involve some application modification to take advantage of the cloud platform.
- Rebuild: This is an enhanced version of ‘Refactoring’ approach, which discards the existing code (and frameworks) for a completely new and dynamic variant of the existing application. This allows greater feasibility to realize the unique attributes inherent to the provider. However, this comes with the risk of a complete lock-in, which might not appeal to some CIOs.
- Replace: In this strategy, enterprises abandon their existing applications entirely and take up commercially developed solutions by vendors. Under this strategy, enterprises don’t have to worry about allocating resources towards a development team as there would be no need for it. However, it has challenges like the lack of control arising from such a strategy may result in issues with data accessibility, lock-ins and data inconsistencies.