The hidden costs of legacy tech

Legacy tech cost number 1: Maintenance

As anyone with an old boiler at home will know, the cost of running and maintaining a piece of hardware rises the longer you hang onto it. That’s partly because it breaks down more often, and costs more in electric power and cooling than new kit does. But it’s also because engineers who specialise in fixing outdated hardware grow progressively more scarce.

Legacy software, too, needs more specialised and expensive maintenance than modern cloud-based apps. “Your system may not actually be supported by vendors any more,” says Freeform Dynamics analyst Tony Lock. “Vendors often charge premiums to provide even minimal support for software and hardware that’s no longer part of their mainstream operations. You’ll find it harder to find someone who knows how the system is configured, and can recreate it if something goes wrong.”

Dell estimates that organisations allocate 60-80% of their IT budget to maintaining existing on-site hardware and legacy apps. In 2019, the US Government Accountability Office found that 80% of America’s $90 billion IT budget went on maintaining software systems, many of which are outdated. Less than 20% of IT funding went on development and modernisation.

It’s notable that many government agencies, international banks and financial institutions continue to use legacy systems. This is often because they use monolithic infrastructures that can’t simply be modernised bit by bit, so upgrading from them is a big, costly project. But monolithic infrastructures are by far the most expensive to fix and maintain, so hanging onto them is a false economy.

Legacy tech cost 2: People

Modernisation is a cultural shift that requires training and new ways of working. Businesses may decide that it’s cheaper and less disruptive to let their staff carry on using the systems they’ve already mastered.

But legacy systems, which often comprise databases, local servers and other bespoke on-site hardware, require an IT department or specialist contractor to keep them running. This ‘waterfall’ approach means users can’t get the best out of their tech, let alone fix and update it. That’s left to the people squirreled away in the IT silo, at great expense to the company and at significant time cost to users who need their help. A modernised system, by contrast, saves and delivers ongoing business value because its users tend to be involved in its design right from the start, so they know how to maintain it and unlock its value.

Legacy tech cost 3: Security

According to Sophos’ State of Ransomware Report 2021, the average total cost of remediation from a single ransomware attack more than doubled between 2019 and 2020, from $761,106 in to $1.85 million (£1.53 million). And one of the surest ways to bag a ransomware bill like that for your business is to use legacy software, such as Windows 7, which is no longer patched by Microsoft.

Healthcare organisations have proved to be particularly vulnerable to ransomware. “Growing legacy footprint” is one of the top two reasons (along with “increasing volume of cyber-attacks”) for this, according to the 2021 HIMSS Cybersecurity Survey. The devastating WannaCry ransomware attack on the NHS in May 2022 provided a horrible illustration. Most of the NHS devices infected with WannaCry, which hit six NHS trusts, were running Windows 7.

The NHS is not alone in its legacy footprint. An April 2022 report by IT management analyst Lansweeper found that nearly one in 20 (4.7%) of Windows computers still run Windows 7. Nearly one in 50 (1.71%) still run Windows XP, whose security support was switched off nearly a decade ago in 2014

Legacy tech cost 4: A whole future of stifled growth

If you wanted to add an innovative new function to a monolithic legacy system, you’d have to pay through the nose for it or settle for a “no”. Older systems tend not to support additional features such as one-click payments and smart data analysis, so they stifle business opportunities at almost unimaginable ongoing cost.

“The cost inefficiency of using bespoke software is huge,” says Rishi Sharma. “Once you start adding up all those little mini costs it ends up with a big, big bill. The modernisation movement is open-source everything, using repeatable patterns. If you’re doing it from ground zero every time, you’re basically doubling your workload.”

There may be some comfort in legacy tech for its users, but there’s not much comfort in the size of the bills you’ll face and the business you’ll lose. Is application modernising always worth it, for any organisation? Yes, says Sharma. “Because of the cost savings you’ll elicit in the long term, it will be worth it. For innovation, scalability, reliability, robustness. You might have to put more in upfront, but you will realise the benefits further down the journey.”