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The long term cost of legacy technology

Let’s talk some legacy applications.   Two surveys we care about today.

In a report from the UK, half the money being spent in IT goes to supporting legacy IT systems.   “A recent analysis by government security indicates that almost 50% of current government IT spend (£2.3b out of a total central Government spend of £4.7bn in 2019) is dedicated to “keeping the lights on” activity on outdated legacy systems, with an estimated £13-22bn risk over the coming five years,” the report notes

And, at nearly two thirds of large enterprises, there are mainframe-based apps dating back 10 to 20 years, according to Advanced’s Mainframe Modernization Business Barometer Report. Over a quarter of businesses feature applications that are between 20 or 30 years old. Some even harken back to the 1960s.   78% of Enterprises have started at least one modernization program as a direct result of Covid-19.

Why do we care?

At first glance for many focused on SMB this would seem irrelevant – government and large enterprise data?     Ignore that – it’s the pattern.   Old systems cost a lot of money to maintain.  

I’m thinking a lot about the SMB of the current and the future – one that isn’t burdened by these legacy systems.      My reasoning is this – that understands who IT providers would be serving, and also what current customers need to compete against.    These would be unburdened by legacy… and even more competitive reason to invest.  

Now layer on the typical MSP – if you’re making money on maintainins old stuff… are you no longer in alignment with your customer if you do better by not keeping them current?    That’s warning area.