Who Still Uses Legacy Software and Why?


Even though there are many worrying examples of threats from obsolete technology, a surprising number of companies continue to rely on legacy software.

Government representatives

A study conducted by Dell revealed that more than 70 percent of federal IT decision makers in the USA, Germany, the UK, Japan, Brazil, India and China use outdated software. Furthermore, half of the government representatives surveyed said that their legacy software has exceeded its end-of-life date. Curiously, COBOL is the most popular language among federal governments, even though it was initially developed almost 60 years ago.

Case 1

In 2017 a computer glitch at the Internal Revenue Service (IRS) had damaging results. The computer failure blocked the agency’s ability to process the electronically filed tax returns of nearly five million Americans.

Lawmakers claim that the agency’s computer system has grown worse as a result of decreased investments in technology modernization over the last eight years, from about $14 billion to nearly $11 billion. During this period, the tax network has increased in complexity while the population of the USA has grown, which means that the number of people who file tax returns electronically has increased as well.


One more industry presently seeking COBOL engineers is banking. The Financial Times reports that a shortage of developers experienced in COBOL, the system that is driving most bank mainframes, will eventually force them to switch.

Case 2

The Royal Bank of Scotland (RBS) faced many IT issues caused by outdated technology, such as blocked account access and payment processing glitches.

The bank’s ancient IT infrastructure was built before the mobile banking age, so the IBM mainframes used by RBS were “creaking under the strain of customer demand.”

Background checking systems

Just like banks, background checking systems suffer from increases in mobile traffic and diverse data sources. As a result, the system rarely performs at the needed level and crashes. The system is typically too complex to migrate it easily to the newer technologies.

Case 3

Thanks to technology obsolescence, there was a massive intrusion into the U.S. National Background Investigations Bureau in 2015. To put it succinctly, the system was hacked.

According to Vice News, the institution had already been working without any IT security staff for an astounding two years at the time it was compromised.

There is one common feature in each of the cases mentioned above: All of them were using Oracle, Microsoft or IBM software products. According to a Flexera report, these three IT service providers were among the top manufacturers of IT products with end-of-life and end-of-support status in 2018. As information technology pioneers, they have created many languages, environments and operating systems, many of which have become outdated over the years. At the same time, these companies are the most significant innovators in technology development and they offer many options for migration. But if that’s the case, why are there still companies who use outdated technologies like Visual Basic and DB2?

What prevents companies from modernization?

Research conducted by Avanade indicates that senior IT leaders believe replacement of legacy software can potentially decrease operating costs by 13 percent per year and increase annual revenue by more than 14 percent.


Even though most respondents (80 percent) believe that not modernizing IT systems will negatively impact the long-term growth of their organization, only one in three companies modernizes their software systems on time. Why?

There is a stereotype that says business is a rational field, just like a living being. At Langate we believe every business has a human face — or several faces — that exerts influence on the company development vector and spreads their personal values, like Bill Gates at Microsoft or Steve Jobs at Apple. There are two main things preventing businesses from moving forward, and they’re the same things that strongly impact human lives: fear and circumstances.

Fear of failure

There’s always a risk that a modernized system won’t meet the business’s needs or that it will work even worse because of technological defects, and this risk often prevents legacy software owners from modernizing. At the same time, the wide variety of modernization options confuses businesspeople, who are searching for better results for a fair price.

Is it better to re-platform, to re-engineer or to re-build the app? It’s a difficult question, and the answer will be different for each company. Partially changing the system can make it even more cumbersome, while changing it completely can destroy its business value. Even if the modernization is performed well and the new system works correctly, it’s still necessary to retrain the staff who use it. Therefore, we understand why starting such a project causes fear.

Insurmountable or difficult circumstances

Nearly 44 percent of Avanade’s respondents say they lack budget outside of the IT department for transformation. Do they have the money to replace the system? As a rule, modernization is the cheaper option, so if you lack the budget for that, you certainly don’t have the money to develop an entirely new solution. However, simply having enough money to invest in the software system re-platforming doesn’t mean you will be able to pull it off.

In some cases, computers that are obsolete at first glance happen to cope the best. NASA’s computer hardware onboard the Orion runs on two IBM PowerPC 750X single-core processors. These dinosaur chips have been in use since 2002, and they are no faster than modern smartphones. But despite this, NASA uses them, and it’s not because of budget constraints. The thing is, IBM computers are reliable, and that is the most crucial requirement in space.

In other cases, software systems can’t be modernized because of tech specifics, lack of tech documentation or an inability to extract data in situation where data loss is unacceptable. Such circumstances cause complications, and engineers have to search for ways to fix the situation. Such searches take time and the results are hardly predictable, so companies prefer to use legacy software until something changes, for instance, the launch of a new development tool.

As we’ve seen, there are many reasons that often prevent companies from investing in modernization. However, at some point all outdated systems must be renewed, and there are five key signs that indicate you need to do it right now. Read 5 TELLTALE SIGNS THAT SHOWS IT’S TIME FOR SOFTWARE MODERNIZATION to discover them.

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