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Legacy Application Modernization in 2023: New Challenges and New Solutions

Rafael Umann
Azion

Coming off the COVID pandemic, it's still urgent that companies meet consumer demand for reliable experiences, but in an uncertain economy this likely means keeping applications running with fewer resources. Legacy applications — those that aren't built on, and cannot easily interface with, modern infrastructure — are hindering digital transformation, can no longer meet enterprise needs, and can be financial and security liabilities.

The only way for companies to stay competitive is to modernize applications, yet there's no denying that bringing apps into the modern era can be challenging. Major obstacles to modernization include the high costs involved, disruption or downtime of critical functions, and the cost and time required for employee retraining.

Despite the perceived challenges, modernization efforts can yield big business benefits. They can result in long-term gains that offset short-term costs through stronger security, faster deployment, better performance, and more efficient resource usage. There are a few ways to modernize apps, and the specific approach you choose will heavily determine the benefits and trade-offs you experience.

Let's look at a few ways to modernize applications and consider what new obstacles and opportunities 2023 presents.

Application Rehosting

With this strategy, you move an application wholesale from legacy infrastructure (such as an on-premise mainframe) to more modern infrastructure, like the cloud. This is merely a stopgap measure, since the application itself is still not modernized. It can be useful for eliminating capital expenses, however.

Given that digital transformation is ongoing across every industry, this low-risk, low-reward strategy is likely insufficient for most use cases. If your legacy applications offer a poor user experience, low agility, excessive maintenance, or difficulty adapting to new use cases before rehosting, these shortcomings will persist after rehosting.

Rehosting in 2023 does offer the possibility of rehosting applications to edge compute solutions. For companies that need to see quick improvements at a low cost, an edge migration can help reduce latency by moving functions closer to end users or improving and preparing the applications to easily navigate throughout different types of infrastructures, including cloud.

Application Re-architecting and Rebuilding

These two approaches are substantially more drastic. Re-architecting involves changing substantial portions of an application to move to a new architecture, while rebuilding, as the name suggests, involves rebuilding an application entirely. Companies that undertake this task by themselves may find it costly and time-consuming, and that a skilled team is required for upkeep.

Whether re-architecting or rebuilding is the best fit for you depends on the current state of your legacy applications. If they are difficult to change, rebuilding may be ideal. Otherwise, re-architecting may be sufficient.

Application Replacement

If your current application cannot be feasibly re-architected, and rebuilding is prohibitively expensive, another strategy is to purchase a software-as-a-service (SaaS) product that accomplishes the same purpose as the outdated application without the costs of recreating it yourself. It can serve as a temporary solution until you have the resources to rebuild (or are able to finish the rebuild process), or it can serve as a permanent solution.

Take note: In 2023, many of the SaaS products you might employ run the risk of vendor lock-in and do not provide the flexibility enterprises need to customize features. Even if you later want to move away from them, the cost and effort required to shift to another provider could render this infeasible. Considering how valuable business agility is, this is a significant risk. Make sure to check that any platform you use adheres to open standards so that you can easily shift your application elsewhere as needed.

Application Refactoring

Application refactoring involves making small improvements to the code and architecture over time, though you (ideally) don't change app functionality at all during the process. For many companies that are aware their applications are outdated, this will likely be the best way forward, offering the least impact, a faster learning curve, and the best long-term results. Over time, you can make gradual changes without the need for any disruption. That includes the segregation of specific parts of the code into new microservices or functions, which are easier to maintain, update, and move to different infrastructure providers.

If your applications are severely outdated, such as those lacking standard internet protocols support — like HTTP — refactoring may not be enough. In that case, you'll need either to pay the price of rebuilding or replacing them, or consider implementing a new front-end component based on modern application architectures and incorporating a connector to your existing legacy application. This can substantially simplify the process while splitting it into multiple phases, and allows you to offer a strong user experience from the start. In turn, that will buy you more time to work on issues that don't impact users from day to day.

Getting Started

The reality is that most companies' daily duties prohibit the heavy burden required to stop everything and start the application development from scratch.

According to McKinsey, in 2023, companies in the top quartile of the Developer Velocity Index (DVI) outperformed others in the market by four to five times, proving that attracting and retaining developers is a critical need. Developers value the chance to work with modern tools and will likely be dissatisfied if they don't have access to them.

Relying on an edge platform — one that builds and maintains global infrastructure that its clients can use on an as-needed basis — is a great first step. By implementing a proxy architecture in front of your applications — such as the ones found on edge platforms — you can easily observe an application's behavior and potential starting points for making improvements. This approach also allows companies to run the entire refactoring process without needing to rehaul their infrastructures (such as migrating to the cloud or moving from one cloud to another).

While each of these modernization strategies has its own pros and cons, none of them can work unless you get buy-in from your organization's leaders. This means advocating for improvements that can impact the bottom line, explaining how new tools can substantially improve the developer experience, enabling faster and more straightforward development, and improving the customer experience.

Acknowledging the value of a modern architecture, shifting to the edge, and employing open standards can all go a long way toward ensuring a company has a financially sustainable application that developers can effectively use and evolve over time.

Rafael Umann is CEO of Azion

The Latest

Like most digital transformation shifts, organizations often prioritize productivity and leave security and observability to keep pace. This usually translates to both the mass implementation of new technology and fragmented monitoring and observability (M&O) tooling. In the era of AI and varied cloud architecture, a disparate observability function can be dangerous. IT teams will lack a complete picture of their IT environment, making it harder to diagnose issues while slowing down mean time to resolve (MTTR). In fact, according to recent data from the SolarWinds State of Monitoring & Observability Report, 77% of IT personnel said the lack of visibility across their on-prem and cloud architecture was an issue ...

In MEAN TIME TO INSIGHT Episode 23, Shamus McGillicuddy, VP of Research, Network Infrastructure and Operations, at EMA discusses the NetOps labor shortage ... 

Technology management is evolving, and in turn, so is the scope of FinOps. The FinOps Foundation recently updated their mission statement from "advancing the people who manage the value of cloud" to "advancing the people who manage the value of technology." This seemingly small change solidifies a larger evolution: FinOps practitioners have organically expanded to be focused on more than just cloud cost optimization. Today, FinOps teams are largely — and quickly — expanding their job descriptions, evolving into a critical function for managing the full value of technology ...

Enterprises are under pressure to scale AI quickly. Yet despite considerable investment, adoption continues to stall. One of the most overlooked reasons is vendor sprawl ... In reality, no organization deliberately sets out to create sprawling vendor ecosystems. More often, complexity accumulates over time through well-intentioned initiatives, such as enterprise-wide digital transformation efforts, point solutions, or decentralized sourcing strategies ...

Nearly every conversation about AI eventually circles back to compute. GPUs dominate the headlines while cloud platforms compete for workloads and model benchmarks drive investment decisions. But underneath that noise, a quieter infrastructure challenge is taking shape. The real bottleneck in enterprise AI is not processing power, it is the ability to store, manage and retrieve the relentless volumes of data that AI systems generate, consume and multiply ...

The 2026 Observability Survey from Grafana Labs paints a vivid picture of an industry maturing fast, where AI is welcomed with careful conditions, SaaS economics are reshaping spending decisions, complexity remains a defining challenge, and open standards continue to underpin it all ...

The observability industry has an evolving relationship with AI. We're not skeptics, but it's clear that trust in AI must be earned ... In Grafana Labs' annual Observability Survey, 92% said they see real value in AI surfacing anomalies before they cause downtime. Another 91% endorsed AI for forecasting and root cause analysis. So while the demand is there, customers need it to be trustworthy, as the survey also found that the practitioners most enthusiastic about AI are also the most insistent on explainability ...

In the modern enterprise, the conversation around AI has moved past skepticism toward a stage of active adoption. According to our 2026 State of IT Trends Report: The Human Side of Autonomous AI, nearly 90% of IT professionals view AI as a net positive, and this optimism is well-founded. We are seeing agentic AI move beyond simple automation to actively streamlining complex data insights and eliminating the manual toil that has long hindered innovation. However, as we integrate these autonomous agents into our ecosystems, the fundamental DNA of the IT role is evolving ...

AI workloads require an enormous amount of computing power ... What's also becoming abundantly clear is just how quickly AI's computing needs are leading to enterprise systems failure. According to Cockroach Labs' State of AI Infrastructure 2026 report, enterprise systems are much closer to failure than their organizations realize. The report ... suggests AI scale could cause widespread failures in as little as one year — making it a clear risk for business performance and reliability.

The quietest week your engineering team has ever had might also be its best. No alarms going off. No escalations. No frantic Teams or Slack threads at 2 a.m. Everything humming along exactly as it should. And somewhere in a leadership meeting, someone looks at the metrics dashboard, sees a flat line of incidents and says: "Seems like things are pretty calm over there. Do we really need all those people?" ... I've spent many years in engineering, and this pattern keeps repeating ...

Legacy Application Modernization in 2023: New Challenges and New Solutions

Rafael Umann
Azion

Coming off the COVID pandemic, it's still urgent that companies meet consumer demand for reliable experiences, but in an uncertain economy this likely means keeping applications running with fewer resources. Legacy applications — those that aren't built on, and cannot easily interface with, modern infrastructure — are hindering digital transformation, can no longer meet enterprise needs, and can be financial and security liabilities.

The only way for companies to stay competitive is to modernize applications, yet there's no denying that bringing apps into the modern era can be challenging. Major obstacles to modernization include the high costs involved, disruption or downtime of critical functions, and the cost and time required for employee retraining.

Despite the perceived challenges, modernization efforts can yield big business benefits. They can result in long-term gains that offset short-term costs through stronger security, faster deployment, better performance, and more efficient resource usage. There are a few ways to modernize apps, and the specific approach you choose will heavily determine the benefits and trade-offs you experience.

Let's look at a few ways to modernize applications and consider what new obstacles and opportunities 2023 presents.

Application Rehosting

With this strategy, you move an application wholesale from legacy infrastructure (such as an on-premise mainframe) to more modern infrastructure, like the cloud. This is merely a stopgap measure, since the application itself is still not modernized. It can be useful for eliminating capital expenses, however.

Given that digital transformation is ongoing across every industry, this low-risk, low-reward strategy is likely insufficient for most use cases. If your legacy applications offer a poor user experience, low agility, excessive maintenance, or difficulty adapting to new use cases before rehosting, these shortcomings will persist after rehosting.

Rehosting in 2023 does offer the possibility of rehosting applications to edge compute solutions. For companies that need to see quick improvements at a low cost, an edge migration can help reduce latency by moving functions closer to end users or improving and preparing the applications to easily navigate throughout different types of infrastructures, including cloud.

Application Re-architecting and Rebuilding

These two approaches are substantially more drastic. Re-architecting involves changing substantial portions of an application to move to a new architecture, while rebuilding, as the name suggests, involves rebuilding an application entirely. Companies that undertake this task by themselves may find it costly and time-consuming, and that a skilled team is required for upkeep.

Whether re-architecting or rebuilding is the best fit for you depends on the current state of your legacy applications. If they are difficult to change, rebuilding may be ideal. Otherwise, re-architecting may be sufficient.

Application Replacement

If your current application cannot be feasibly re-architected, and rebuilding is prohibitively expensive, another strategy is to purchase a software-as-a-service (SaaS) product that accomplishes the same purpose as the outdated application without the costs of recreating it yourself. It can serve as a temporary solution until you have the resources to rebuild (or are able to finish the rebuild process), or it can serve as a permanent solution.

Take note: In 2023, many of the SaaS products you might employ run the risk of vendor lock-in and do not provide the flexibility enterprises need to customize features. Even if you later want to move away from them, the cost and effort required to shift to another provider could render this infeasible. Considering how valuable business agility is, this is a significant risk. Make sure to check that any platform you use adheres to open standards so that you can easily shift your application elsewhere as needed.

Application Refactoring

Application refactoring involves making small improvements to the code and architecture over time, though you (ideally) don't change app functionality at all during the process. For many companies that are aware their applications are outdated, this will likely be the best way forward, offering the least impact, a faster learning curve, and the best long-term results. Over time, you can make gradual changes without the need for any disruption. That includes the segregation of specific parts of the code into new microservices or functions, which are easier to maintain, update, and move to different infrastructure providers.

If your applications are severely outdated, such as those lacking standard internet protocols support — like HTTP — refactoring may not be enough. In that case, you'll need either to pay the price of rebuilding or replacing them, or consider implementing a new front-end component based on modern application architectures and incorporating a connector to your existing legacy application. This can substantially simplify the process while splitting it into multiple phases, and allows you to offer a strong user experience from the start. In turn, that will buy you more time to work on issues that don't impact users from day to day.

Getting Started

The reality is that most companies' daily duties prohibit the heavy burden required to stop everything and start the application development from scratch.

According to McKinsey, in 2023, companies in the top quartile of the Developer Velocity Index (DVI) outperformed others in the market by four to five times, proving that attracting and retaining developers is a critical need. Developers value the chance to work with modern tools and will likely be dissatisfied if they don't have access to them.

Relying on an edge platform — one that builds and maintains global infrastructure that its clients can use on an as-needed basis — is a great first step. By implementing a proxy architecture in front of your applications — such as the ones found on edge platforms — you can easily observe an application's behavior and potential starting points for making improvements. This approach also allows companies to run the entire refactoring process without needing to rehaul their infrastructures (such as migrating to the cloud or moving from one cloud to another).

While each of these modernization strategies has its own pros and cons, none of them can work unless you get buy-in from your organization's leaders. This means advocating for improvements that can impact the bottom line, explaining how new tools can substantially improve the developer experience, enabling faster and more straightforward development, and improving the customer experience.

Acknowledging the value of a modern architecture, shifting to the edge, and employing open standards can all go a long way toward ensuring a company has a financially sustainable application that developers can effectively use and evolve over time.

Rafael Umann is CEO of Azion

The Latest

Like most digital transformation shifts, organizations often prioritize productivity and leave security and observability to keep pace. This usually translates to both the mass implementation of new technology and fragmented monitoring and observability (M&O) tooling. In the era of AI and varied cloud architecture, a disparate observability function can be dangerous. IT teams will lack a complete picture of their IT environment, making it harder to diagnose issues while slowing down mean time to resolve (MTTR). In fact, according to recent data from the SolarWinds State of Monitoring & Observability Report, 77% of IT personnel said the lack of visibility across their on-prem and cloud architecture was an issue ...

In MEAN TIME TO INSIGHT Episode 23, Shamus McGillicuddy, VP of Research, Network Infrastructure and Operations, at EMA discusses the NetOps labor shortage ... 

Technology management is evolving, and in turn, so is the scope of FinOps. The FinOps Foundation recently updated their mission statement from "advancing the people who manage the value of cloud" to "advancing the people who manage the value of technology." This seemingly small change solidifies a larger evolution: FinOps practitioners have organically expanded to be focused on more than just cloud cost optimization. Today, FinOps teams are largely — and quickly — expanding their job descriptions, evolving into a critical function for managing the full value of technology ...

Enterprises are under pressure to scale AI quickly. Yet despite considerable investment, adoption continues to stall. One of the most overlooked reasons is vendor sprawl ... In reality, no organization deliberately sets out to create sprawling vendor ecosystems. More often, complexity accumulates over time through well-intentioned initiatives, such as enterprise-wide digital transformation efforts, point solutions, or decentralized sourcing strategies ...

Nearly every conversation about AI eventually circles back to compute. GPUs dominate the headlines while cloud platforms compete for workloads and model benchmarks drive investment decisions. But underneath that noise, a quieter infrastructure challenge is taking shape. The real bottleneck in enterprise AI is not processing power, it is the ability to store, manage and retrieve the relentless volumes of data that AI systems generate, consume and multiply ...

The 2026 Observability Survey from Grafana Labs paints a vivid picture of an industry maturing fast, where AI is welcomed with careful conditions, SaaS economics are reshaping spending decisions, complexity remains a defining challenge, and open standards continue to underpin it all ...

The observability industry has an evolving relationship with AI. We're not skeptics, but it's clear that trust in AI must be earned ... In Grafana Labs' annual Observability Survey, 92% said they see real value in AI surfacing anomalies before they cause downtime. Another 91% endorsed AI for forecasting and root cause analysis. So while the demand is there, customers need it to be trustworthy, as the survey also found that the practitioners most enthusiastic about AI are also the most insistent on explainability ...

In the modern enterprise, the conversation around AI has moved past skepticism toward a stage of active adoption. According to our 2026 State of IT Trends Report: The Human Side of Autonomous AI, nearly 90% of IT professionals view AI as a net positive, and this optimism is well-founded. We are seeing agentic AI move beyond simple automation to actively streamlining complex data insights and eliminating the manual toil that has long hindered innovation. However, as we integrate these autonomous agents into our ecosystems, the fundamental DNA of the IT role is evolving ...

AI workloads require an enormous amount of computing power ... What's also becoming abundantly clear is just how quickly AI's computing needs are leading to enterprise systems failure. According to Cockroach Labs' State of AI Infrastructure 2026 report, enterprise systems are much closer to failure than their organizations realize. The report ... suggests AI scale could cause widespread failures in as little as one year — making it a clear risk for business performance and reliability.

The quietest week your engineering team has ever had might also be its best. No alarms going off. No escalations. No frantic Teams or Slack threads at 2 a.m. Everything humming along exactly as it should. And somewhere in a leadership meeting, someone looks at the metrics dashboard, sees a flat line of incidents and says: "Seems like things are pretty calm over there. Do we really need all those people?" ... I've spent many years in engineering, and this pattern keeps repeating ...