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Evolution of the five R’s of modernization

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To focus our efforts on guidance for existing applications, let’s proceed with the most convenient way
to think about modernization, which is commonly called “the five R’s”:3 retire, replace, retain and wrap, rehost, and reenvision. It’s likely that no single approach will be appropriate for all of an enterprise’s legacy applications, and a mix of differing approaches might be warranted, based on the value that an application delivers versus the cost of any given approach. Because these approaches depend highly on the situation, application, and types of cost involved, there is no one-size-fits-all solution.

 Retire Of course, if a legacy application is providing little value compared to its costs, the enterprise should consider it a candidate for retirement. When few people are using an application relative to its cost impact, the enterprise needs to run a cost-benefit analysis to determine if it is worth the expense. Additionally, some functionality provided by legacy systems may be rolled into a consolidated modern application running in the cloud, allowing some applications to be retired while others are replaced and modernized.

 Replace Often, a legacy application is providing some value, but an off-the-shelf replacement
with a lower total cost of ownership (TCO) is available. Many legacy applications were originally
built because there was no alternative at that time. A modern, readily available application that is
better suited to running in the cloud—most cost-effectively of all, a SaaS application—may now
exist that can be used to replace the older one. Also, when a legacy application is replaced with a
more comprehensive modern solution, there might be a chance to consolidate functionality from
several older applications, thereby replacing multiple applications with a single system.

 Retain and wrap If a legacy application is providing good value and not incurring a high TCO,
the best approach might be to retain it but put a modern “wrapper” around it in order to gain additional value and benefits. Examples of the “retain and wrap” approach include the following:

 Wrap a legacy application within C# in Microsoft Visual Studio, add web services to the application there, and then add a layer of orchestration around those web services.

 Extend a legacy application with third-party tools; for example, using a C# wrapper around an older technology such as COBOL. Apply the benefits of the wrapper on top of the core technology in new, more modern ways, such as facilitating the development of mobile tools.

 Rehost If a legacy application is providing good value but is expensive to run, it might be a candidate for rehosting. Rehosting involves keeping the same basic functionality, but moving it to
the cloud where it is easier to manage and less expensive to run. This is also called “lift and shift.”
In a rehosting situation, the legacy application might be currently located either on a local VM or
on local hardware. Some VMs might be eligible to move with a simple migration. Those on local
hardware might be able to be converted with a physical-to-virtual migration and then hosting the
VM on the cloud. Some VMs, especially older ones, might not migrate easily to the cloud without
some significant work. In those cases, you might want to consider reenvisioning and building the
application in the cloud.

 Reenvision If a legacy application is providing good value but cannot be easily migrated, the best solution might be to reenvision it and build it again on the cloud. Reenvisioning is a process of rebuilding the application in the cloud using modern technology, a new architecture, and best practices; it normally also involves adding more business value to core functionality, such as
improving market differentiation. Reenvisioning an application might require rewriting the main
logic by using a modern development language and tools and making it service oriented.
Reenvisioning an application can be facilitated by starting with VMs in the cloud, which can be
instantiated in a matter of minutes.

Source of Information : Microsoft Enterprise Cloud Strategy

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