Navigating the Legacy System Modernization Journey: A Roadmap for Product Owners

Legacy system modernization turns out to be a critical challenge for businesses. With outdated technology and infrastructure, companies face operational risks and heightened security vulnerabilities, while missing opportunities for growth. 

With over ten years of experience in software development as a Solution Architect, I have led numerous application modernization projects at MobiDev. My expertise in transforming outdated systems into agile, efficient, and secure infrastructures provides invaluable insights into this complex process.

In this article, I will explore common indicators of legacy systems and explain how to implement modernization, drawing on the best practices developed by MobiDev and our clients’ success stories.

How to Understand That You Are Dealing with a Legacy System 

A legacy system is an outdated platform, application, or technology that was once cutting-edge but is now considered obsolete. These systems can become dated due to the rapid advancement of technology or because they require significant effort to maintain compatibility with newer systems. Typically, legacy systems are over five years old and struggle to handle modern business requirements effectively. High maintenance costs and operational inefficiencies are common indicators that a system has become a legacy. However, there are other indicators of legacy systems:

• Poor Performance: Frequent crashes, slow operations, and regular reboot requirements hinder productivity.
• Security Vulnerabilities: Out-of-date security protocols make legacy systems susceptible to cyber threats.
• Limited Scalability and Integration: Legacy systems often struggle to integrate with modern systems and scale with growing business needs.
• Compliance Risks: Keeping up with evolving regulatory requirements can be challenging with outdated systems.
• User Frustration: Inefficient and complicated systems can lead to user dissatisfaction and reduced productivity.
• Business Inefficiencies: Legacy systems can create bottlenecks and inefficiencies in business processes, such as outdated reporting tools and manual data entry.

To better understand legacy systems and the business role of innovations, I suggest considering Clay Christensen’s “Innovator’s Dilemma” applied to legacy system modernization. It explains the challenges organizations face when upgrading or replacing their legacy systems. The dilemma highlights the conflict between continuing to invest in existing systems, which are still generating revenue, and the need to innovate by adopting new technologies.

This graph depicts the growth trajectories of legacy systems and the adoption of new technologies. The green curve shows the initial growth phase driven by legacy systems. As these systems are implemented, they lead to increased revenue over time. The curve flattens at the maturity point, indicating that the legacy systems have reached their peak effectiveness. At this stage, they struggle to drive further growth, leading to a plateau in revenue.

The blue-shaded area represents the dilemma or stall zone, where businesses face the decision of whether to continue with the legacy systems or transition to new technologies. This period is marked by uncertainty as the potential benefits of modernization are weighed against the risks and costs.

The blue dot marks the point where new technologies, such as AI, are adopted. The blue curve then shows the renewed growth trajectory driven by these innovations. This phase represents the potential for increased revenue and improved efficiency as modern systems replace or augment the legacy ones.  

Despite the advantages of modernization, some legacy systems persist for several reasons. The high cost and complexity of replacement, along with their integral role in critical business functions, often lead companies to maintain these systems. Customizations, lack of in-house expertise, and regulatory compliance in industries like banking and healthcare further contribute to the reluctance to upgrade. But do all companies modernizing legacy systems yield amazing results? While some companies successfully carry out modernization, for others, it ends in failure.   

4 Legacy Modernization Examples: Winners & Losers 

To understand the reasons for success and failure when it comes to legacy modernization examples, I’ll analyze the experience of well-known companies.

Example #1: Shopify System Modernization — Wisely Adopting Modular Monolith 

Shopify is a prime example of impactful legacy system modernization. Initially, Shopify’s infrastructure was built as a monolith, where all functionalities were tightly interwoven, creating significant challenges as the platform scaled. To address these issues, Shopify decided to evolve into a modular monolith, preserving a single codebase while enforcing clear boundaries between different components. In this way, the company managed to get the advantages of both monoliths and microservices. 

The modernization process involved several strategic steps:

1. Code Organization: Shopify reorganized its codebase by real-world concepts (like orders, shipping, inventory, and billing), making it easier to locate and manage code. This reorganization highlighted and reduced unnecessary coupling.
2. Isolating Dependencies: Shopify developed tools to track and enforce boundaries between components, ensuring that each component had a clean, dedicated interface with clearly defined domain boundaries.
3. Componentization: Shopify split its monolithic codebase into distinct components, structured as mini Rails apps, which allowed for better modularity without the overhead of maintaining separate services.

These steps led to improvements in developer productivity and system reliability. The reorganization and isolation of dependencies reduced the complexity of making changes, leading to faster development cycles and fewer unintended side effects. The adoption of a modular monolith allowed Shopify to scale efficiently while maintaining the advantages of a single, cohesive codebase. 

Example #2: Walmart System Modernization — Blazing a Trail in Cloud Computing

Walmart is a prime example of effective cloud application modernization. Recognizing the limitations of its existing infrastructure, Walmart embarked on a transformative journey to build one of the largest hybrid clouds in existence, known as the “Triplet Model.” This model integrates public clouds with Walmart’s private clouds across the U.S. (West, Central, and East), enabling 10,000 edge cloud nodes to bring computational power and data closer to customers and associates.

The modernization process involved several strategic steps:

1. Adoption of the Triplet Model: Walmart’s Triplet Model combines public, private, and edge clouds, enhancing system performance, reducing latency, and increasing capacity to handle peak consumer demands. This approach also offers resiliency and disaster recovery capabilities while cutting cloud costs by 10-18% annually.
2. Custom-Built Infrastructure: Walmart developed custom infrastructure components, including Traffic Management for intelligent routing, OneOps as an open-source cloud management platform, and Walmart Cloud Native Platform (WCNP) as a cloud abstraction layer. These innovations enable seamless switching of applications across clouds and improve operational efficiency.
3. Scalable Cloud Platform: With over one million CPU cores, Walmart’s cloud platform supports massive scale operations, allowing for significant backend adjustments to its website and the rapid launch of new features like vaccine appointment scheduling and AR experiences in the Walmart app.

These steps led to remarkable improvements in system reliability, performance, and innovation capacity. By integrating public, private, and edge clouds, Walmart achieved the flexibility and scalability needed to drive future growth and technological advancements. This strategic approach to modernization not only enhanced Walmart’s operational efficiency but also positioned the company to continually innovate and deliver exceptional customer experiences.

Despite Shopify and Walmart’s success in modernizing their legacy systems, not all companies have the same experience and take timely steps to stay on the cutting edge of technological change. 

Example #3: Blackberry — Failing to Meet Customer Expectations

In early January 2022, BlackBerry announced it would discontinue provisioning services. BlackBerry’s downfall was due to its failure to innovate and integrate easily with other applications. The reasons lie in legacy systems and integration challenges. Delays in maintenance and increasing service costs could be indicators that a system was obsolete. It’s important to evolve with technology to avoid becoming irrelevant. 

Example #4: Netflix vs. Blockbuster — Adapting to The Digital Shift

The story of Netflix vs. Blockbuster highlights the impact of technological innovation, market strategy, and adaptability in the competitive entertainment industry. Netflix’s pivot from a DVD rental service to a streaming giant showcases how embracing new technologies and adapting to consumer needs can lead to success. In contrast, Blockbuster’s failure to recognize and quickly adapt to the digital shift ultimately led to its downfall.

Why Modernize Legacy Systems

Legacy products often come with a range of issues that can compromise their quality and negatively impact a business. Here are some common problems associated with legacy systems:

1. Product Maintenance Challenges: Over time, the technologies used in legacy projects become outdated, making service and maintenance difficult. This necessitates timely updates and replacement of unsupported tools. Additionally, legacy code can be riddled with bugs and inconsistent coding practices, turning it into a complex puzzle.
2. Limited Scalability: Legacy apps frequently struggle to scale in response to changing business needs and growth demands, which can restrict business expansion and adaptability.
3. Security Vulnerabilities: Outdated technologies and insufficient attention to security during the development stage make legacy products susceptible to cyber-attacks.
4. Incompatibility: Legacy apps often face compatibility issues with new technologies and software, leading to integration problems when connecting with other systems.
5. Difficulty Adding New Features: The complex structure and dependencies of legacy systems make it challenging to modify and add new features.
6. High Service Costs: Supporting legacy products can be expensive, as they require specialists skilled in outdated technologies, driving up maintenance costs.

Statista reveals the top reasons driving companies’ modernization of legacy systems and data.

In the next section of this article, I’ll explore the numerous advantages of modernizing legacy systems and how this transformation can help businesses overcome challenges to achieve greater efficiency, security, and scalability.

Top 5 Benefits of Legacy System Modernization

Here are five key benefits of legacy system modernization:

1. Improved Efficiency

Outdated hardware and software can prevent the adoption of new technology and tools designed for cloud-based systems. Modernization allows access to these tools, resulting in improved functionality, productivity, and efficiency. It also minimizes downtime as providers handle technical issues promptly.

2. Enhanced Security

Cloud modernization service offers enhanced security for data through higher levels of encryption and reduced human access to data warehouses. This is crucial in the information age, where data is invaluable and compliance with regulations is essential. Modernized systems can better protect sensitive data during the migration process and beyond.

3. Scalability and Flexibility

Older systems often have limitations that hinder business growth. Modernization removes these barriers, allowing businesses to scale up or down easily without being constrained by physical hardware. This adaptability is essential to meet evolving requirements and changing business demands.

4. Reduced Costs

Legacy systems often incur high costs due to ongoing maintenance and the need for specialized support for outdated technologies. Modernization can significantly reduce these costs by transitioning to a pay-as-you-go model, where businesses only pay for the services and resources they use, resulting in substantial annual savings.

5. Improved User Experience

Providing the best possible user experience is critical for customer satisfaction. Modernization enables the development of systems and tools that enhance the customer journey, offering better storage and protection of customer data and smoother, more enjoyable interactions.

The goals and benefits of legacy system modernization are clear. Now, it’s time to explore the strategies to achieve these goals. In the next section, I’ll discuss various legacy system modernization strategies to help you choose the best approach for your business.

2 Key Modernization Strategies: Evolutionary Vs Revolutionary

If a legacy system can’t meet the needs of today’s competitive business environment, it should be modernized. There are two main strategies for systems modernization:

1. Evolutionary Strategy: Gradually improve the system’s architecture and code quality over time.
2. Revolutionary Strategy: Completely rewrite the code or do primary code refactoring in a shorter period.

The choice of strategy depends on the project requirements, business needs, available resources, and time.

Main 5 Legacy System Modernization Approaches

When your product’s relevance becomes an issue, the first step should be to define a comprehensive modernization strategy. This involves creating a high-level plan and roadmap for the modernization process, answering the key questions of what and why you need to modernize (approaches), and how you will accomplish it (techniques).

Let’s briefly explore some legacy system modernization approaches before diving into specific techniques.

1. Legacy System Replatforming

Replatforming can help reduce scalability limitations, improve security, and enhance compatibility with new technologies. However, migrating to a new platform can be costly and complex.

2. Legacy System Reengineering 

Reengineering involves reviewing processes and systems to improve their efficiency and performance. It can enhance the functionality of a legacy product and increase its scalability.

3. Legacy System Refactoring 

Refactoring involves restructuring a project to enhance its readability and ease of maintenance. This process can improve compatibility and enable the addition of new features to a legacy product.

4. Legacy System Rearchitecting  

Rearchitecting is a common modernization approach for complex, business-critical legacy systems where simple refactoring or re-platforming isn’t enough to meet evolving requirements. This involves making significant architectural changes to the core structure and design of the product.

5. Legacy System Wrapping into a new technology 

Another way to modernize a legacy system is to wrap it in new technology, such as using Docker containers. This approach is cost-effective and allows the product to launch on a new platform and integrate with modern APIs.

Each legacy system should be thoroughly analyzed to determine the best tools for modernization. Consider the following factors:

• Code quality
• Timeframes and budget
• Condition of libraries and frameworks used in the project

Top 5 Legacy System Modernization Techniques

Now, let’s explore the specific techniques for legacy system modernization and the business challenges they can address.

1.  Legacy System Migration to The Cloud

Migration to the cloud involves moving a software system from an on-premises server to a remote cloud provider’s environment. This improves its availability and scalability. In the cloud, you can store and process data, run apps, and handle different tasks without maintaining your own infrastructure.

Advantages of cloud migration include:

• Improved Availability: Cloud services provide high availability and reduce downtime by running applications on remote servers.
• Increased Scalability: Cloud environments allow easy scaling to enhance performance and efficiency.
• Reduced Costs: Cloud services lower infrastructure maintenance costs, eliminating the need to buy and support physical equipment.
• Simplified Updates: Applications can be updated centrally without installing updates on each server.
• Enhanced Security: Cloud infrastructure offers better security than local servers and allows for easy control over system and data access.

However, cloud migration is not a one-size-fits-all solution for all legacy projects. Each system requires a unique approach based on various factors.

2. Moving Legacy System from Monolith to Microservices 

Modernization by moving to microservices involves splitting a product into smaller, independent services that work together. This is useful when a monolith becomes too big and complex, making maintenance and development difficult. If system requirements change frequently and new features need to be implemented quickly, transitioning to microservices can speed up development and simplify feature addition.

Benefits of moving to microservices include:

• Improved Performance: Microservices allow scaling specific components as needed without scaling the entire application.
• Better Fault Tolerance: Errors in one service do not affect others, keeping the system functioning effectively.
• Easier Development: Independent services can be developed and tested separately, making the process faster and more efficient.
• Faster Delivery of Changes: Each service can evolve independently, allowing quick updates without re-releasing the entire system.

Overall, moving from monolith to microservices can greatly enhance a product’s flexibility and scalability, helping businesses grow and meet customer needs more effectively.

3. Legacy System Tech Stack Modernization

Rebuilding an application can reduce costs, enhance quality and customer service, and speed up delivery. The main goal of modernizing the tech stack is to boost the product’s performance and efficiency.

We update outdated systems to a reliable tech stack, considering the specifics of legacy projects. Here are the most common scenarios.

These recommendations aren’t universal; each project is unique and requires tailored solutions. Therefore, it’s always a better option to start with a technical audit to find the most effective strategy for legacy system modernization. 

4.  Migrating Legacy Systems from Desktop to Web 

Legacy system migration from desktop to the web is a technique of moving the software from local computers to a web server, allowing users to access it via a browser. This is useful for organizations with employees working from different locations who need consistent access to systems.

Benefits of migrating desktop applications to the web include:

• Reduced Service Costs: Minimizes costs associated with maintaining individual user computers since applications are hosted on a web server.
• Increased Mobility: Enables employees to work remotely and access applications from anywhere in the world.
• Simplified Updates: Products can be updated centrally without needing to install updates on each computer.
• Enhanced Security: Allows for controlled access to applications, protecting against hackers and viruses.
• Greater Flexibility: New features can be accessed on any device with a browser, making it easier to adapt for mobile devices and expanding the platforms where your product is available.

Migrating from desktop to the web is a crucial step in business growth, enhancing employee performance and business mobility.

5. Legacy System Encapsulation 

Another approach is covering a legacy system with modern technology, for example, Docker or REST. Encapsulation is a technique for reutilizing legacy app components. While leaving the code in its current environment, encapsulation links it to the new presentation and accesses layers via an API. This technique helps to enrich the system’s features and value. At MobiDev, we use this technique to provide low-cost and low-risk legacy app modernization to meet clients’ demands.

How To Choose Your Modernization Approach

The answer is simple: choose the modernization approach that will bring the highest value to your business with minimal effort. To make the right choice, consider the level of needed transformation, risks, and costs. Popular options might not suit your product, as all legacy systems are unique. Evaluate your system, prioritize tasks based on user research, and start modernizing. Remember, you can always consult tech experts like us to help you make the right choice and guide you through the entire modernization process.

 Legacy System Modernization Best Practices

As we’ve already mentioned, modernizing legacy systems is a complex but necessary process for businesses aiming to stay competitive and efficient. Here are some best practices to consider.

1. Deeply Analyzing the System to Estimate Tech Debt 

Technical system audit is essential for modernization since it helps identify necessary changes and potential risks. The principle is simple: understand the problem before solving it. A tech audit helps uncover tech debt in the code and architecture and assess product risks.

It also identifies which parts of the product can be migrated to a new platform and which need rework. As a result, you get recommendations for improving the code and architecture, along with a clearer project budget and timeline.

You need a tech audit in the following cases:

• New features implementation
• Ensuring your product meets industry standards and norms
• Developing a competitive advantage
• Identifying areas that need updates or replacement
• Better error detection and fixing
• Increasing performance

A technical audit can be challenging, especially with outdated documentation or large monolithic apps that are difficult to understand. To overcome these challenges, work with experienced software engineers and consultants.

2. Wisely Outlining Your Business Goals with Available Tech Solutions

One best practice for legacy system modernization is to approach it strategically, keeping business requirements and desired outcomes in mind. A seasoned business analyst and an experienced software architect can help answer key questions before starting the modernization:

• What’s driving your need for system modernization?
• Is your current system lacking essential features?
• Is it costly or time-consuming to maintain?

This approach will help you avoid unnecessary work and determine if you need modernization or new features. As a result, you’ll have a clear, consistent roadmap outlining the modernization plan and future system development.

3. Smartly Leveraging AI for Legacy Code Modernization

Although legacy system modernization brings numerous benefits, business leaders and CTOs are often concerned about associated risks and high costs. They also take into account security vulnerabilities that remain a significant constraint for upgrades. With the arrival of Generative AI, the usage of this tech for coding tasks looks promising, but are AI-powered tools a silver bullet for all things modernization? Definitely not. Let me share modernization tasks that best suit AI tools.                    

Search

Traditional search methods can be slow and imprecise, especially in systems with vast amounts of data stored in outdated formats. AI can:

• Improve Search Accuracy: AI algorithms can understand the context and semantics of queries, providing more relevant results than basic keyword searches.
• Speed Up Searches: AI can quickly scan through large datasets and retrieve information in seconds, saving valuable time.
• Handle Unstructured Data: AI tools can effectively search through unstructured data, such as emails, documents, and logs, which are common in legacy systems.

Analysis

AI tools relying on Large Language Models (LLMs) are suitable for analyzing and understanding legacy code. This can be crucial for modernization projects where understanding the existing codebase is necessary. AI can:

• Analyze Code Structure: AI tools can break down complex legacy code to understand its structure and logic, providing insights that can guide modernization.
• Identify Dependencies: AI can map out dependencies within the code, helping to pinpoint areas that require updates or rework.
• Understand Code Purpose: Using natural language processing, AI can interpret comments and documentation within the code to understand purpose and functionality. This is especially useful when documentation is outdated or missing. 

LLMs can read and interpret legacy code, identifying functions, variables, and their interrelationships. They can also suggest optimizations and highlight redundant or obsolete sections of code. This analysis helps developers understand the existing system’s functionality and design a more efficient, modernized architecture.

However, the code written exclusively with AI isn’t accurate enough, and the percentage of bugs in such code exceeds 25%. AI-generated code can be difficult to maintain, especially if it’s not well-documented or doesn’t follow your organization’s coding standards. Moreover, using AI to modify existing legacy code can also be fraught with issues due to bugs, copyright concerns, and integration problems.     

Success Story: Modernizing IoT Access Control System

Now let’s look at a real-world example of a legacy system that was successfully modernized by rewriting old architecture that hindered from adding new functionality.

MobiDev’s software consultants and engineers started working on the project at the stage when the client had a ready-made desktop solution but needed a web module and a number of new features. During the software audit, we came across legacy code and technical limitations that prevented us from adding new functionality to the system.

The main tech challenges we overcame:

• Improved code quality
• Rewrote project architecture
• Provided effective communication between desktop and web apps
• Added new features

Let’s take a look at them in detail.

1. Improved code quality

The product was Python-based with a legacy GUI. During the audit, we discovered that the code was written monolithically without covering many edge cases. The code very often called for methods that did not exist, but they were executed according to some common logic (for example, a set of logic on _getattr_). There also wasn’t error handling, which greatly complicated the debugging process. Overall, the code structure prevented the system from integrating with the backend and storing the necessary data. 

We provided code refactoring services to prepare the product for further development. The situation was complicated by the lack of technical documentation. However, our engineers managed to fix all bugs and improve the readability and quality of the code.

2. Rewrote project architecture

The original product architecture had some limitations. Synchronization with the database was missing. We also had a mix of logic with UI redraw functions. This complicated the system, as the same code was causing UI changes that shouldn’t have happened.

To fix this, the team had to almost completely rewrite the architecture, leaving only some key parts. We set up the synchronization of the system with the server and database in the cloud, plus added the possibility of remote control through the web admin panel. Also, engineers separated the UI from the logic and made transparent communication through WebSockets.

To create a modern front end on a desktop application, we used a custom approach. Instead of using the GUI in Python, we start the browser in kiosk mode when the operating system starts. Thus, we created an adaptive design that could support screens of various sizes from 5” to 12”. Plus, this approach made it possible to use modern JS libraries and achieve a better UI, which is impossible to do with Python. 

Last, but not least, we managed to optimize the development process, so developers could test the code on a regular working computer, without the need to constantly update the desktop app and see how it looks on it.

3. Provided effective communication between desktop and web apps and added new features

After the upgrade, the client came back to us with a new request for adding new functionality. As the project evolved, it needed more adaptability to run interfaces on different types of screens. Also, one of the key requests was to create a system to instantly respond to suspicious user behavior.

It was a really challenging task since the product was not just a web application, but basically a modernized operating system. We had to register all the hardware in AWS IoT, where the constant exchange of information between the hardware part of the project and the server part took place through the MQTT protocol. Also, monitoring of the Internet connection was added to receive a message immediately if the device lost connection or something happened to it. 

During the technical audit, we found that the current libraries used in the project didn’t meet the new requirements, so the tech stack was expanded to AWS IoT + Django framework with PostgreSQL and WebSockets.

How Mobidev Can Help You Modernize Your Legacy System

MobiDev has been assisting businesses in building, scaling, and modernizing software products to help them achieve their sustainable goals since 2009. Our years of experience allow us to take on complex software modernization tasks to turn outdated products into modern, efficient, and user-friendly solutions.

When you decide to modernize your software with MobiDev, the process will include the following 3 stages:

1. Introduction Stage

We start with an interview to understand the problems from your perspective, helping us focus our analysis.

2. Tech Strategy Consulting Stage

Current System Audit: We identify key issues by evaluating architecture, documentation, code quality, tool effectiveness, and security risks.

Modernization Strategy Creation: We set modernization goals considering your product’s functionality, performance, scalability, security, and compatibility. Then we define performance, code quality, and reliability metrics to measure success. Considering all your business goals and limitations, we propose the best modernization approach (reengineering, refactoring, code rewriting) and prepare a detailed plan outlining steps, timelines, resources, risks, and mitigation strategies.

3. Implementation Stage

 Depending on your needs, we can handle the modernization process within two possible cooperation models:

• providing you with a dedicated development team of seasoned modernization experts fully responsible for guaranteed product delivery. 
• or extending your in-house team with MobiDev’s middle & senior software engineers on demand.

If you need legacy system modernization services to help your business grow, feel free to contact us. We are ready to assist you in achieving your business goals with top-notch engineering and consulting services.