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Organizations are being driven to digitize their business models and are “lifting and shifting” their legacy apps to the cloud as a result. But this isn’t enough. Simply moving to the cloud doesn’t provide companies with the highly sought-after benefits of lowering their total cost of ownership, increasing agility, and decreasing risks. Applications need to be modernized and optimized for the cloud as well. 

A survey conducted by 2nd Watch sought to understand where they see the application migration and modernization industry heading, what they prioritize, and how they will focus on application modernization to ensure a digital-first strategy that accelerates digital transformation

A key takeaway from the survey was that the vast majority of companies (79%) believe legacy applications are hindering their organization’s digital transformation initiatives. Making matters worse, 80% of respondents said they are continuing to run at least one-quarter of their business workloads and applications on-premises, with 52% running more than half of their workloads and applications on-premises.

Graphic. What percentage of your business workloads and applications currently run on-premises? 1% said 100% on-premises. 10% said 76-99% on-premises. 41% said 51-75% on-remises. 29% said 25-50% on-premises. 17% said less than 25%. And 2% said 0% on-premises -- everything runs in the cloud.

It’s also telling that survey respondents ranked reducing technical debt as the number one driver for cloud migration, followed by reducing time to market, product agility, and reducing costs. However, this ranking varies slightly by respondent title. C-suite respondents are most driven by reducing costs, while VPs are most driven by reducing time to market. 


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Meanwhile, 91% of respondents agree or strongly agree that application modernization plays a critical role in their organization’s adaptability to manage rapidly changing business conditions. And one-third (33%) of respondents said their biggest challenge in modernizing legacy applications is a lack of skills or expertise, while about a quarter struggle most with lack of budget and investment (26%) or outdated processes and tools (25%).

Nevertheless, IT infrastructure and application modernization will continue in 2022 with a focus on cost savings, customer satisfaction and innovation. There’s not much choice: almost everyone (99%) who responded to 2nd Watch’s survey said they have not yet met their modernization objectives.

The survey included responses from 100 business and technology executives in companies with at least 1,000 employees.

Read the full report by 2nd Watch.

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