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What is Application Modernization (AppMod)?


We define modernization as the process of digitizing traditional processes on a timeline that aligns with our customers’ business strategy. Application modernization, or AppMod, happens when an enterprise adds new, modern functionality to what an application already does.

Application Modernization values the existing functionality and reliability of the incumbent application that keeps the lights on as highly as any new capability. OpenText calls this being able to run and transform the business; moving fast while breaking nothing. Efficient software and application delivery plays a key role in this. Outcomes look different for everyone, and really depend on what the organization wants from modernization. Generally, the answer is “like before, but better.”

Let us define applications and then explain why they may need modernizing.

Modernization: Reimagining COBOL systems for the digital age

One COBOL-focused survey in 2020 told us that 63 percent of IT leaders planned to modernize their key COBOL applications rather than using any other route. A more recent study from The Standish Group reinforces the value of modernization, citing a success rate three times higher than more draconian IT change programs.

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Application Modernization

What are applications?

Applications – or apps – are software programs that run on a computer, created to do a specific thing. That “thing” is their application, hence the name. You are using an application to read this.

OpenText does not deal in quirky, phone-style apps, but business applications. They are bigger, more complex, do more things, and work on larger computers – often mainframes.

We often prefix the word with “enterprise” to indicate scale, “core” to illustrate importance, and ”mainframe” or ”host” if that is where they run. The terms applications and systems are sometimes used synonymously, and we often cite “legacy” applications, too.

These applications are the beating heart of the enterprise. They must work, whatever else happens. Imagine a bank’s customers suddenly denied access to their money because of an application upgrade glitch. The cost in lost revenue and brand damage,[1] currently estimated at $1.7 trillion,[2] are two reasons some enterprises have yet to begin their transformation journey.

Core applications are often many years old, mired in complexity, and the original coder is unlikely to still be around to help. But change is constant and taking no action is not an option.

For context, there are different options for an enterprise, in theory at least, to boost application functionality to deliver new customer-focused innovation.

What are legacy applications?

In tech, anything labelled as “legacy” has an image problem. But to OpenText, legacy applications, often created in COBOL or Programming Language One (PL/I), are simply core programs written some years ago – and maybe even decades. Legacy applications are the original structures supporting every piece of organizational IT architecture added since.

A legacy COBOL application, typically hosted on the mainframe, might support a bank’s day-to-day operations – running overnight batch processes and supporting ATM transactions, for example. Low maintenance, high performance, below-the-radar tech quietly doing what is required of it every day.

But the bank’s customers want a mobile app, too, so a little remodelling is needed to meet future demands. By modernizing this application, the bank adds new functionality without affecting the everyday, backend processes on which their business depends.

Application modernization is part of a wider program of work called Smart Digital Transformation. This happens when our software bridges the gap between so-called legacy systems running the business, and new technology enabling the innovation needed to succeed in a digital marketplace. It gives customers new value from their core IT investments, and is a key foundation of what we do at OpenText. For more, read this.

Does Application Modernization work?

More customers than ever recognize modernization as the most sustainable, risk-averse transformation strategy out there. Recent research bears this out.

The Standish Group compared the outcomes of different approaches to the same goal – namely transforming core applications to meet the demands of the digital age – from 50,000 use cases.[3] The results were clear.

In a different report, Standish noted that “starting from scratch had a success ratio of 26 percent versus a failure ratio of 20 percent”, and organizations will have lost more than money in the process. In contrast, those taking the modernization route enjoyed a 71 percent success rate versus a failure rate of just 1 percent.

Making that happen requires enterprise-scale technology, decades of experience, and a well-defined model. We explain more under the heading How Can OpenText Help?

Why choose modernization?

Modernization is the safest business bet for the enterprise.

The alternative, nuclear option is replacing the original application with a packaged, off-the-shelf alternative that will sacrifice most, if not all of the organizational data and business intelligence.

The ”rip and replace” and the similar ”lift and shift” approaches may be why 70 percent of digital transformation projects fail,[4], creating a $900 billion hole in enterprise finances,[5] and is a great ad for application modernization.

The ongoing flow-like modernization process avoids the pitfalls of the sudden-stop, interventionist approach, and returns a more favourable ROI. The split between the enterprises using a new package and those getting fresh returns on established IT investments is profound.

The 27 percent getting a ”high” or ”very high” return on the rip and replace, compares unfavourably with the 55 percent choosing modernization. Equally, 41 percent of rip-and-replacers saw only a ”low” or “very low” ROI, while only 16 percent of modernizers claimed the same. It’s a key business decision. Strategic, you might say.

What is strategic modernization?

Both strategic modernization and software modernization are, effectively, application modernization by another name. It is a useful way to think of AppMod because the word strategic speaks to these core applications’ importance and significance to the business.

In a recent survey, a huge majority of IT leaders, 92 percent, defined their COBOL applications as ”strategic”.[6] That generally means that those running IT enterprises understand their core applications – the technology supporting their business for so many years – must continue to do so.

Application modernization was once an IT-only thing. That time is over, and our recent research proves CEOs and other stakeholders are now making modernization decisions, often around the platform hosting these core applications, particularly the mainframe.

What is mainframe Application Modernization?

Mainframe application modernization relates to the platform on which the application runs.

While these applications often live on the mainframe, some organizations want to move them on to more contemporary, distributed platforms. We wil cover the cloud shortly.

But the mainframe is not another legacy technology, as our dedicated ”What is the Mainframe?” page explains. Similarly, COBOL continues to evolve, and those running mainframe applications often attribute the same values of reliability and trustworthiness to the language used to write them.

Much of OpenText’s core business is in modernizing mainframe COBOL applications, and we have lots of ways to do that as part of a Smart Digital Transformation strategy. COBOL developers pack OpenText events such as #DevDay to see what’s new and next for their favourite programming language.

Maybe you would even like to learn COBOL yourself, and earn and earn your Micro Focus™ COBOL certification.

How does OpenText help with Application Modernization?

Application modernization is our home turf and our Modernization Maturity Model has launched digital transformation for thousands of our customers.

By overcoming cost, complexity, and agility on-and off-premises for multiple platforms including the mainframe, the AppMod model meets the modernization challenges of application, process, and infrastructure to deliver quantifiable success.

  1. Application: Extend application value with low-risk innovation.
  2. Process: Leverage new practices and tools for Agile and DevOps.
  3. Infrastructure: Deploy applications across every platform of hybrid IT.

This time-proven process creates new value from IT investments. It bridges the old (that COBOL or PL/I application), and new (whatever technology will support the innovation needed to meet customer demand).

Enterprises modernizing through our model undertake a low-risk, core application upgrade that helps the enterprise meets the increasingly sophisticated demands of tech-savvy customers. Think of the funky interface of the mobile banking app built on, and supported by, mainframe-hosted COBOL and data.

Post-modernization, enterprises can deploy reimagined business applications anywhere in the hybrid IT landscape – host, server, cloud, container or mobile–crucially delivered with confidence and speed.

Continuous modernization – boundless business value

Transform your business with continuous application modernization.

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Need to go deeper?

While we have covered the big-ticket questions, you will have many more. So we have covered a few more, very specific, queries about how application modernization works in particular circumstances. If they don’t tick all your boxes, please get in touch.

Does modernization work beyond the mainframe?

Yes. Enterprise IT is often a multi-platform environment and core COBOL systems exist across a range of non-mainframe platforms. These systems can be developed and adapted to live either on-premises or beyond. Micro Focus™ Visual COBOL developers and COBOL developers using the ACUCOBOL-GT portfolio build and deploy applications across desktop, web, and mobile platforms using AcuBench and the COBOL Virtual Machine.

What is Application Modernization to the cloud?

Some organizations want to move, or rehost, their core systems – the host applications keeping the lights on–to other platforms within the hybrid IT landscape. Migrating to the cloud is one option, particularly through Microsoft Azure, Google Cloud or Amazon Web Services (AWS).

While the mainframe remains the cornerstone of enterprise IT and continues to evolve to meet the challenges of the digital age, COBOL’s built-in portability makes application re-hosting a straightforward and simple activity. Our enterprise application modernization capabilities enable deployment to mainframe, cloud, containers and elsewhere, as needs dictate.

For COBOL applications running on distributed platform systems, Visual COBOL is the market-leading solution for modernizing core business systems, a pathway to the public or private cloud, and the preferred toolset for developers with Continuous Integration (CI) and Continuous Delivery (CD) pipelines who want to leverage cloud vendor solutions to accelerate application delivery. Similarly, the Enterprise Suite solution enables mainframe application workloads to be migrated to the cloud including Azure, AWS or Google Cloud platforms.

But moving to the Cloud, for many, is a step-by-step journey. Whether Cloud is your final destination or if you’re unsure, but seeking new approaches for application modernization, there are many resources available to support your strategy. At OpenText, we see that modernization journey to the cloud in three 3 steps:

    • Get Cloud Ready: Plan using code analysis tools. Move to commodity x86 hardware platforms. Adopt Agile and containerization for more reliable and faster application delivery.
    • Migrate and Optimize: Quickly extend application value into the cloud using virtualized, containerized and cloud platforms. Adopt DevOps and managed services (XaaS) such as databases, analytics, and storage.
    • Go Cloud Native: Embrace cloud-native architectures and reach higher levels of performance and reliability at lower cost. Deliver new business value faster by implementing DevSecOps and API-enabling applications.

For those interested in getting started and mapping their Destination Cloud strategy, explore this resource page for more information.

What is Application Modernization transformation?

In the context of business applications, AppMod is a subset of the digital transformation process. Although related, modernization and transformation are not interchangeable terms. An organization will modernize their application as part of their digital transformation program.

The fact that modernization does not necessarily ever end is not a bad thing. In the same way as Sony’s personal music players and Boeing’s jets continue to evolve in line with supporting technology, an IT organization will make ongoing changes to their core application to remain competitive in a marketplace driven by customer demands.

Ready to start your Application Modernization efforts?

If you are all set to begin your modernization journey, then we’re ready to help.

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