CIOs Focused on Modernizing Legacy Applications

The ability to upgrade legacy applications is a good skill to have right now. Forrester Research says modernizing older software is a top priority for IT decision makers in the U.S. and Europe.

It’s all about the costs: Continuing to operate “monolithic legacy applications” is “unsustainable,” in the words of Jean-Pierre Garbani, vice president and principal analyst at Forrester. “Companies are willing to adapt their business processes to cheaper packaged software solutions rather than wait for custom applications. Automation is the key to IT’s future.”

Updating key legacy applications was cited as the top initiative for both enterprises and small and medium-sized businesses, (64 percent and 55 percent, respectively). More than 25 percent of enterprises and more than 20 percent of SMBs said it was “very” important.

Other highlights include:

  • Software budgets will hold relatively steady. Enterprises allocated 16 percent of their IT operating budgets toward expensed software costs in 2008 and plan to allocate 17 percent over the next year. SMBs allocated 19 percent toward expensed software costs in 2008 and plan to allocate 19 percent.
  • Reducing IT costs and improving integration are top goals. Eighty-one percent of enterprises consider reducing IT costs to be an important goal. Improving integration between applications wasn’t too far behind at 77 percent. Seventy-one percent of SMBs consider improving integration to be important.
  • Software-as-a-service concerns and barriers have diminished. The 2009 landscape for SaaS is looking brighter compared to last year, but there are still some bumps ahead. Currently, security concerns are the most commonly cited reason why enterprises aren¿t interested in SaaS (31 percent). That’s another bit of good news for security specialists.
  • Packaged applications are preferred. Packaged applications or modules are the most preferred deployment options for 33 percent of enterprises and 45 percent of SMBs when it comes to major initiatives. The next preferred option for both is a tailored solution assembled from existing custom and packaged application modules. Few firms prefer SaaS or hosted solutions.

— Mark Feffer

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