LEGACY TECHNOLOGY
Hidden costs of legacy tech Tough economic conditions can mean businesses defer updating their technology, but this can be a false economy, and this is something resellers need to be emphasise to customers. Nia Batten, head of cloud and platforms at esynergy, outlines the case to modernise.
As the economic turbulence of the past few years continues to send shockwaves across the global economy, business have markedly intensified their focus on cutting costs where possible. But some of these cost-minimising measures may have the opposite effect. Indeed, when it comes to relying on legacy tech, postponing a modernisation plan due to cost becomes, ironically, rather expensive. This reliance is more common than one might expect: more than 70% of software used by Fortune 5000 companies was developed 20 or more years ago, according to a report from Dell. Many of these large enterprises are concerned about the immediate financial and temporal costs of transitioning to a new digital architecture, and so continue to utilise their existing systems. In times of economic uncertainty, it is tempting for enterprises to think only in terms of the here and now. Moreover, in addition to the initial costs, digital architecture migration can be challenging and protracting and there can be pitfalls along the way. But the long- term potential gains make it more than worth the risk and there are drawbacks that can come with the ‘if it ain’t broke, don’t fix it’ approach. Security risks Legacy systems leave enterprises exposed to cybersecurity attacks. The financial risks associated with outmoded security cannot be overstated. The average total cost of remediation from a single ransomware attack more than doubled between 2019 and 2020, from $761,106 to $1.85 million (£1.53 million), according to Sophos’ State of Ransomware Report 2021 . The more up to date a company’s security systems are, the less likely hackers are to be able to breach it. Poor integration A lack of integration with more modern technology and automated systems can lead to valuable data being overlooked or siloed. The more modernised the data systems are, the better connected the data will be
as a result. But organisations that rely on legacy technology lack the ability to meet the sophisticated data demands of these use cases. According to a recent esynergy survey, a third of business leaders at large enterprises reported that they were unable to make sound decisions based on data. Business- as-usual approaches (i.e. siloed data teams, centralised data warehouses) are too slow and fragmented. It can take months to deliver basic data capabilities and use cases. Operational costs Maintaining legacy tech can prove to be every bit as expensive as a digital upgrade. This is because IT staff must spend time and money to keep the obsolete software functioning. A report from Dell estimates that organisations currently allocate 60-80% of their IT budget to maintaining existing on-site hardware and legacy apps, which leaves only 20-40% of the budget for everything else. Technical debt When it comes to upgrading, time is of the essence. No company can defer upgrading its tech indefinitely: sooner or later, the business will fail as its rivals outpace it. Despite this, many business leaders mistakenly believe that they can afford to defer their tech improvements and rely on dated systems in the meantime. But this is a misapprehension and can lead to ‘technical debt.’ ‘Technical debt’ describes the phenomenon in which using legacy systems defers short- term costs in favour of long-term losses that are incurred when reworking the systems later. This is because the longer the enterprise defers, the further ahead their competitors will become, making it even harder for them to accrue the profits necessary to fuel the innovations needed to catch up and the harder transitioning to a more modernised system becomes. Non-compliance As any data expert knows, laws and legislations for the use of technology do
Nia Batten head of cloud and platforms
esynergy.co.uk
The financial risks associated with outmoded security cannot be overstated. The average total cost of remediation “
from a single ransomware
attack more than doubled between 2019 and 2020.
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