What is Application Modernization?
The definition here is simple, Application Modernization is taking a software system that was built on older technology and giving it a refresh. The refresh would be both using the latest modern technology as well as updating software features. There could be security issues or compliance issues with the current software. Some software features may no longer be used. It's possible the technology it was originally built with is no longer supported.
The other major consideration today is the addition of AL/ML or GenAI in the new version. Do you need to build custom models? Integrate a large language model? Capture more data to train a future AI model? These are all part of the decision of when to start an application modernization process.
Strategies for updating legacy software systems
It can be daunting to even think about replacing a critical piece of technology. The risk of harm to the business often keeps legacy software untouched for years. It make sense, making that change can cause disruptions and any disruption equals lost money. My advice is don't wait until you are forced to make the switch.
Here are some strategies for approaching the update:
- Big Bang - Build a new one and flip the switch in one risky moment.
- Lift-and-Shift - Sometimes also called Retain/Rehost. You take the existing software but move it to a new environment (i.e. the cloud)
- Rebuild ("Big Bang") - Rewrite the application from scratch using modern tech stacks and architectures. Also known as Refactoring or Rearchitecting.
- Replace - Find a commercial or SaaS solution and migrate to it.
- Encapsulate - Wrap legacy components with APIs that can integrated with new systems.
- Retire - If the system isn't critical or isn't frequently used, sometimes it's best just to turn it off.
Step-by-step plan to increase the chances of success
Success rates improve with phased, incremental approaches (avoiding "big bang" replacements, which fail ~70% per some reports).
Here is how our founder, Kenny Pyatt, recommends approaching the problem:
- Always start with an assessment. You need to know where you stand right now. What the software does, integration points, databases, etc. What is in scope? What are the priorities for migration? What can be left behind?
- Develop your migration strategy. The dream scenario is to approach it in phases. Can we modify existing code or is the risk too high? If making changes to the code isn't possible, can we access the database? Our goal is to increase the odds of success while reducing the risk to the business.
- Build the Team and follow a proven Process. Once we have the strategy you need to build the team and follow a proven process. We like our DevOcho Way process for Application Modernization projects. It's a partnership between the business and the technical teams.
- Execute and communicate. This is so important. As you build and roll out the new system, you need a strong communication strategy.
- Turn off the old system. Once you've completed the migration and you feel confident everything has been migrated successfully, it's time to turn the old system off. Kenny's go to approach here is to turn it off but wait a few weeks or a month before you tear it down. Are there critical monthly processes that run? If the budget allows, keep the system available for one or two of those, just in case.
Thorough portfolio assessment, strong data migration plans, and tools like containers (Docker/Kubernetes) it's easier today to take on legacy systems.
"It's much easier today to tackle a legacy system than it was 5 years ago." - Kenny Pyatt, Founder & CEO of DevOcho.
Most common strategies
- Replace / Big Bang: This is the most risky. You build a new platform, do a data migration, and then flip the switch. Depending on the size of the system, this can be a workable approach, but it carries the most risk if the software system is critical.
- Rehost/Replatform: Migrate the existing code base and databases to the cloud. Security and performance options here to potentially get the software back in compliance and improve performance while you look for other options.
- Replace with SaaS/COTS: Replacing custom tools with modern SaaS platforms can often be the right approach. An interesting trend in 2026, AI seems to be flipping the script here from a cost perspective. It's now often cheaper to build vs buy depending on your scale.
- Rearchitect/Refactor with Strangler Fig Pattern: Popular for incremental replacement: Gradually building new microservices around the monolith, "strangling" the old code over time (low risk, no big-bang downtime). This is a lower risk strategy (see the picture of the vine surrounding the tree)
- Hybrid Approaches: The most common approach is to combine a few different strategies (e.g., encapsulate core, replace UI, re-platform the backend).
(photo courtesy of Wikipedia)
| Modernization Strategies | Pros | Cons |
|---|---|---|
|
Lift-and-Shift (Rehost) |
- Quick migration with minimal changes |
- Limited optimization for cloud benefits like scalability |
|
Rebuild/Refactor |
- Enables full cloud-native optimization and scalability |
- High upfront costs and development time |
|
Replace (SaaS / COTS) |
- Access to vendor-supported, up-to-date features |
- Risk of vendor lock-in and dependency |
|
Encapsulate |
- Low-risk way to extend legacy system usability |
- Adds layers of complexity to the architecture |
|
Retire |
- Significant cost savings by eliminating maintenance |
- Risk of losing valuable data if not properly archived |
Common Industry Patterns
- Banks/Finance → Often retain core (e.g., COBOL mainframes) but encapsulate with APIs and replace frontends (e.g., mobile banking apps).
- Retail/E-commerce → Frequent full replacement or rebuild for scalability (e.g., moving from custom monoliths to microservices on AWS/Azure).
- Non-Profits/Education → Incremental rearchitecture to handle growth without disruption.
- Manufacturing/Logistics → Replatform to cloud, with gradual retirement of obsolete systems/modules.
Want to see similar results?
Let's discuss how DevOcho can apply these Application Modernization strategies to your business. We offer very low pressure pre-sales consulting. We are here to help if you need it.