Why SMBs want Application Modernisation Services
If there’s an unwritten rule in the general law of modern business technologies, it’s that everything old needs to be new again. Once, this was largely about refreshing hardware, then it became about upgrading software. Today SMBs have a growing appetite for services to help them modernise applications.
Cloud Value Realisation Drives Increased Investment
Our recent regional study of SMBs show they equate the adoption of cloud infrastructure and platforms with lowering the total cost of IT ownership, faster development and time-to-market for products and services, as well as increased operational efficiencies during peak demand periods.
The study also found a clear and positive correlation between cloud implementation and revenue results for SMBs. Over 320 businesses with up to 1,000 employees were surveyed. 84% had achieved revenue growth over two successive years. Of those, 94% had implemented cloud, and either maintained or increased their spending on cloud during the height of the pandemic. Moreover, businesses with cloud-powered operations were statistically more likely to have driven double digit revenue growth.i
In short, cloud is helping businesses to run better, innovate more rapidly and control the costs associated with growth.
SMBs have realised the value of cloud technology, not just to discrete parts of their operations, but to the whole business. As a result, 83% will maintain or increase their investment in cloud over the next two years, which bucks the historical trend of SMBs cutting technology spend during tougher economic times.
Even more importantly, 87% are allocating increased budgets to engage third party service expertise to support their cloud investment goals.ii
SMBs need service partners that can help them with strategies to deliver a return on planned cloud investments, over the long term. In the short to mid-term, they need to drive more value from what they already have in place. This is where application modernisation comes in.
What is Application Modernisation?
Application modernisation is something of a catch all phrase that covers a range of strategies, methodologies and practices used to update legacy software applications.
Why update from legacy systems? In simple terms, as software ages, it accrues more technical debt. The time spent to patch, maintain and secure, update code and incorporate new features and functionalities needed to meet the changing needs of the business increases. This increases cost overheads, and sucks scarce, skilled resources away from higher priorities.
Technical debt is a burden for businesses of any size, but even more so for SMBs that often have very lean IT teams. Modern applications allow SMBs to take full advantage of cloud technologies to improve performance, functionality, scale, and efficiency.
How Big is the SMB Appetite for Application Modernisation?
The application modernisation services market is expected to grow from USD $15.2B in 2022 to $32.8B by 2027. Asia Pacific is projected to be a fast-growing market over this time.iii
This data would seem to be supported by our own survey, which showed over 55% of SMBs are actively seeking services to migrate or re-platform their cloud infrastructure, modernise core business systems, and the applications used for backup and disaster recovery. Containerisation is on the up with SMBs that are already underway with their application modernisation strategies.
- 29% have already containerised existing workloads
- 24% have modernised applications using container development platforms
Within the next two years
- 43% intend to containerise existing workloads.
- 40% intend to modernise applications using container development platforms
- 34% intend to adopt container management
There was also a healthy appetite for developing cloud native applications. In fact, 52% of SMBs surveyed confirmed they are currently engaging developers. However, this can also come at a high cost, and our data suggests SMBs are driving forward with plans to adopt Low Code/No Code platforms and tools to reduce their need for external developers over time.to reduce their need for external developers over time.
Servicing the Need for Application Modernisation
If you caught our recent playbook for MSPs ‘Cloud Growth Horizons’ you’ll recall the Five R’s of cloud migration are ‘Retire, Rehost, Refactor, Rewrite and Replace. Figure 1 below breaks this model down into more detail, and highlights where application modernisation typically comes into play.
There are a myriad of services that partners can provide to SMBs to support their modernisation programs. Often, defining the scope of a modernisation effort can be a project unto itself, but assuming the business case can be made, partners can work with their customers to help define a strategy, using the Five R model.
Defining the goals and requirements of an application modernisation effort:
- Identify the business drivers: The first step is to identify the business drivers behind the application modernisation effort. This includes understanding the business objectives, identifying the pain points and challenges that the current application is facing, and determining the desired outcomes of the modernisation effort.
- Assess the current application: The next step is to assess the current application to understand its strengths and weaknesses. This includes analysing the application’s functionality, performance, scalability, and maintainability.
- Define the scope of the modernisation effort: The next step is to define the scope of the modernisation effort. This includes determining which parts of the application will be modernised and which parts will be replaced.
- Determine the target architecture: The next step is to determine the target architecture for the modernised application. This includes identifying the architecture components, such as databases, middleware, and application servers, and defining the interfaces and integration points.
- Define the functional and non-functional requirements: The next step is to define the functional and non-functional requirements for the modernised application. This includes defining the key features and functionalities that the application should support, as well as the performance, scalability, and security requirements.
- Prioritise the requirements: The next step is to prioritize the requirements based on their importance and impact on the business. This includes identifying the must-have requirements versus the nice-to-have requirements.
- Develop a roadmap: The final step is to develop a roadmap for the modernisation effort. This includes defining the timelines, milestones, and deliverables for the modernisation effort, as well as the resources required to complete the project.
Developing a Modernisation Strategy
Strategies will vary from customer to customer, but typically would need to cover the following:
- Business case and goals: This typically formalises aspects of the business case for the modernisation effort, with more specificity around the applications included within the scope of work. The strategy should provide a clear understanding of the expected benefits, such as increased efficiency, reduced costs, improved customer experience, and enhanced security.
- Application inventory and assessment: This component involves taking an inventory of the applications that need to be modernised and assessing their current state. It should identify the applications that are most critical to the business and determine their compatibility with modern technologies.
- Modernisation approach: This component involves selecting the most appropriate approach for modernising the applications. This may include rehosting, refactoring, re-platforming, or rebuilding. The approach chosen will depend on the specific needs and objectives of the modernisation effort.
- Technology stack: This component involves selecting the technology stack that will be used to modernise the application. This may include cloud services, microservices, containers, and serverless computing. The technology stack should be selected based on its compatibility with the existing infrastructure and the needs of the business.
- Data migration and integration: This component involves migrating data from the legacy systems to the modernised application and integrating it with other systems. It should ensure that data is transferred accurately and securely and that the modernised application can seamlessly integrate with other systems.
- Testing and validation: This component involves testing and validating the modernised application to ensure that it meets the business requirements and functions as intended. It should include functional testing, performance testing, and security testing.
- Deployment and maintenance: This component involves deploying the modernised application in a production environment and maintaining it over time. It should ensure that the application is monitored and maintained to ensure that it remains up-to-date with the latest security standards and technology advancements.
Evaluation and assessment of legacy applications.
Again, there are many techniques that can be deployed during this phase, but some of the fundamental steps and stages include:
- Identify the suitability of legacy apps against currently stated business objectives: This includes identifying the critical business processes that the application supports and the specific features and functionalities required to support those processes.
- Determine the application architecture: The next step is to determine the architecture of the legacy application. This includes identifying the components of the application, such as databases, middleware, and application servers, as well as the programming languages and frameworks used to develop the application.
- Identify the application components: The third step is to identify the individual components of the application. This includes understanding the different modules or components that make up the application and their interdependencies.
- Analyse the application code: The next step is to analyze the application code to understand how it is structured and to identify any areas of complexity or technical debt. This includes analysing the code for maintainability, scalability, and performance.
- Assess the application security: Security is a critical factor to consider when evaluating a legacy application. This includes assessing the application’s vulnerability to cyber threats, such as malware, phishing, and ransomware attacks.
- Identify the application dependencies: The next step is to identify any dependencies that the application has on other systems or components. This includes identifying the APIs or web services that the application uses and any external databases or systems that it relies on.
- Analyse the application data: The final step is to analyse the application data to understand how it is structured and to identify any areas of complexity or inefficiency. This includes analysing the data for accuracy, completeness, and consistency.
How can we help?
For many partners, entering the application modernisation services arena represents greenfield interaction. Success involves change to how organisational resources are skilled and resourced, and to your customer engagements.
As a global organisation, Crayon has itself needed to modernise its applications over time. This, combined with the extensive advisory we provide to partners around the world gives us great insight that can help you service SMB customers across the APAC region.
To participate, sign up for our On-Demand webinar, which provides a solid overview of ways our partners can respond to emerging demand.
It is highly recommended viewing and will only take 30 minutes of your time.
Every partner that opts-in to watch the On-Demand webinar will receive ongoing information to support your learning on Application Modernisation. The series includes a number of instructional videos to further accelerate your understanding of the processes, technologies and services available from Crayon, including how we can help with:
- Attaining technical capability
- Building consultative capability
- Architecting solutions
- Assessing migration needs
- Assessment tools
- Executing workload migrations
- Optimising cloud solutions
We look forward to you watching our webinar and engaging with us further to drive value for your business and your customers through application modernisation services.
i Future of Operations: Maximize Cloud Value with a Strategic Mindset, a Forrester Consulting study commissioned by rhipe, January 2023.
ii Future of Operations: Maximize Cloud Value with Strategic Mindset, a Forrester Consulting Study commissioned by rhipe, December 2023