Legacy application modernization is the process of transforming old software systems — that remain critical to the operation — so they can evolve without interrupting the business. It ranges from platform adjustments to deep refactoring toward cloud-native architectures, and its goal isn’t to replace what works but to remove what holds things back.
If you manage technology at a Latin American company, you very likely have at least one application like this: it invoices, processes, integrates. It’s been running for years. But every time the business needs to move faster — a new channel, an integration, an analytics or AI initiative — that system shows its limits.
And the numbers confirm you’re not alone: according to a Gartner study, companies allocate up to 70% of their IT budget to maintaining what already exists, leaving less than 30% to innovate. The global legacy software modernization market grew to USD 15.14 billion in 2025 and is projected to reach USD 27.3 billion in 2029 (1). This isn’t a trend: it’s a structural necessity.
What legacy applications are (and why they’re still running)
A legacy application is a system that still does its job, but whose technology or architecture makes it hard to evolve. It’s not that it’s useless: it’s that it can’t change at the pace the business needs.
In Latin America it’s common to find core systems in banking and insurance, custom platforms more than 10 years old, highly customized ERPs, and monolithic applications with multiple cross-dependencies.
Replacing them isn’t simple, and there are concrete reasons: they support critical processes, they contain business rules accumulated over years, they have complex integrations, and the risk of disruption is high. A 2025 survey of more than 500 IT professionals reported that 62% of organizations still depend on legacy systems despite being aware of their security and performance risks (2).
That’s why many organizations choose to keep them. The problem isn’t that decision in itself — it’s not having visibility into what it costs.
The real cost of not modernizing: technical debt
Technical debt is the accumulation of technology decisions that solve the short term but penalize the long term. In legacy applications, that debt shows up as rising maintenance costs, slow-to-implement changes, complex integrations with new platforms, dependence on unsupported technologies, and limitations on scaling.
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Technical debt can consume around 42% of development teams’ time (Code Red study, analysis of 39 proprietary codebases).
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30% of CIOs acknowledge that more than 20% of their innovation budget is diverted to resolving technical-debt problems (McKinsey).
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It’s projected that by 2027, technical debt will consume more than 40% of the IT budget of large organizations if no action is taken (Forrester).
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According to IBM, the average cost of a ransomware attack reached USD 5.08 million in 2025, significantly higher than the average for general data breaches. Legacy systems, lacking patches and modern security controls, are priority targets for these attacks.
Manual management isn’t free — that applies here too. The costs of maintaining legacy applications rarely show up as a visible budget line. But they’re there: in lost development hours, in recurring incidents, in opportunities that can’t be seized because the system doesn’t allow it.
Why migrating to the cloud doesn’t solve the underlying problem
Many companies move toward the cloud as a first step. The infrastructure improves: better availability, elastic scalability, pay-per-use. But the application keeps operating exactly the same.
This is known as Lift & Shift — moving the application as-is to the cloud — and it’s a valid strategy as a first step to buy some breathing room. But it doesn’t eliminate technical debt. The internal logic doesn’t change, the complexity remains, the constraints are still there. The result is a system in the cloud with the same difficulties evolving.
The evidence confirms it: organizations that completed modernizations between 2022 and 2025 report 30–40% reductions in operating costs and release cycles 40–60% faster. The pattern is clear: incremental approaches — modernizing module by module, with no big bang — reduce risk and deliver measurable results in weeks, not years.
At Novis we see this frequently: companies that migrated to AWS, Azure or GCP and discover their application is still the same black box, except now they pay the cloud bill on top of the technical debt. To go deeper on this point, you can review our technical analysis on legacy application modernization: why migrating to the cloud isn’t enough.
Modernization strategies: when to use each one
There are different paths to intervene in legacy applications. The right choice doesn’t depend on technology: it depends on the business context, the level of technical debt, the risk of intervention, and the available budget.
This is Novis’s perspective on when each approach is appropriate:
| Strategy |
What it involves |
When it’s appropriate |
Limitations |
| Rehosting (Lift & Shift) |
Move the app to the cloud with no structural changes. |
When you need to get off obsolete hardware fast, or as phase 1 before refactoring. |
Doesn’t reduce technical debt. The app stays the same. |
| Replatforming |
Adjustments to take advantage of cloud services (managed DB, load balancing, identity). |
When the architecture is reasonable but the underlying infrastructure is the bottleneck. |
Doesn’t fix spaghetti code or lack of tests. |
| Refactoring |
Restructuring the code to improve maintainability, modularity and testability. |
When the business logic is valuable but the code makes it ungovernable. It’s the core of pragmatic modernization. |
Requires understanding the embedded business logic. Not trivial. |
| Re-architecting |
Redesign toward microservices, APIs, cloud-native. |
When the monolith no longer allows adding functionality or scaling. Usually post-refactoring. |
Greater investment and time. Must be justified with a business case. |
| Replacing |
Substitution with a new solution (SaaS, new development, package). |
When the cost of maintaining exceeds that of replacing, or when the base technology is unrecoverable. |
Accumulated business logic is lost. High risk if not mapped well. |
Novis’s view: in our experience, gradual refactoring combined with replatforming is the highest-impact route for most Latin American companies. It doesn’t require rewriting from scratch (extremely high risk, failure rate above 40%), it allows progress incrementally, and it delivers measurable results in weeks, not years.
The Novis approach: pragmatic modernization
Novis doesn’t sell modernization as an eighteen-month project. It approaches it as a progressive intervention that prioritizes what truly limits the business, while maintaining operational continuity.
The approach has three phases:
Phase 1: Diagnosis and scope
We use automated code-analysis tools to map the application’s real structure: dependencies, cyclomatic complexity, duplications, high-fragility zones. But tools have no business context. That’s why we complement them with intensive sessions with key users to contrast the “truth of the code” with the “reality of the user.”
That’s how we uncover the hidden logic that isn’t in any manual.
The initial diagnosis is free of charge. In 30 minutes we assess whether your application is a candidate and where to start.
Phase 2: Refactoring and transformation
We develop and release the new version module by module, validating each step with the client’s team. There’s no big bang: each iteration is a verifiable increment.
The destination is a cloud-native application: databases on managed services, components that scale on demand, modern identity with centralized control. The result isn’t just a new application, but a lighter and more predictable operation.
Phase 3: Delivery with a modern lifecycle
We don’t just deliver a working app. We deliver a versioned code repository, continuous integration pipelines (CI/CD), complete documentation, and knowledge transfer to the internal team. The next change you need won’t be a risky 6-month project: it will be a controlled, documented and reversible process.
Is your application a candidate for modernization?
A quick self-assessment. Answer yes or no to each question:
| # |
Question |
Yes / No? |
| 1 |
Does it run on a framework or language with no active support? |
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| 2 |
Are there 1–2 key people who “know everything” about the system? |
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| 3 |
Is deployment manual, painful, or avoided due to risk? |
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| 4 |
Do you have recurring incidents in production? |
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| 5 |
Do maintenance costs grow every year with no clear explanation? |
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| 6 |
Is audit or compliance pressuring you over a lack of controls? |
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| 7 |
Do you lack up-to-date documentation of the system? |
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| 8 |
Does the original vendor no longer exist or provide support? |
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If you answered “yes” to two or more, your application is very likely a candidate for modernization. Schedule a 30-minute assessment with the Novis team to define where to start.
Concrete benefits of modernizing
When modernization is well directed, the results are measurable:
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Lower operating costs: organizations that complete modernizations report 30–40% less in operating costs (Market Report 2026).
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Faster release cycles: deployment 40–60% faster thanks to CI/CD and modular architectures.
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Lower security risk: a 50% reduction in exposure to security breaches documented in cloud-modernization studies.
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Enabling AI and analytics: cloud-native architectures allow real-time data pipelines that legacy monoliths simply don’t support.
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Proven ROI: return on investment documented between 288% and 362% over three years, according to Kyndryl’s survey of 500 IT leaders (2025 State of Mainframe Modernization — kyndryl.com/us/en/campaign/state-of-mainframe-modernization).
In short: the bigger risk is doing nothing
Legacy application modernization isn’t a technology project for the sake of modernizing. It’s a business decision that balances operational continuity with the capacity to evolve.
The right approach isn’t to rewrite everything from scratch (extremely high risk). Nor is it to move the app as-is to the cloud (solves nothing). It’s to diagnose in depth, refactor incrementally, and deliver an application that can keep evolving — with CI/CD, documentation, and a team that understands the code.
The Novis team combines 25 years of experience in enterprise architectures, cloud and critical systems to assess each case with a comprehensive view. This makes it possible to define realistic modernization routes, prioritize correctly, and move forward without compromising the operation.
Request a free diagnosis: we assess your application in 30 minutes and tell you whether modernizing is worthwhile, where to start, and the most realistic route for your context.
Schedule a free diagnosis.
By Cristian Marin (CTO Novis), Javier Ciangarotti (Líder equipo Desarrollo Novis), Claudio Calderon (Desarrollador Senior Novis).
Sources:
(1) (ResearchAndMarkets, Legacy Software Modernization Global Market Report 2025 — globenewswire.com/news-release/2026/01/14/3218852).
(2) (Saritasa, Legacy Software Modernization Survey 2025 — saritasa.com/insights/legacy-software-modernization-in-2025-survey-of-500-u-s-it-pros).
(3) (IBM Cost of a Data Breach 2025 — thebestvpn.com/statistics/average-cost-of-a-ransomware-attack)
Frequently Asked Questions
It's a software system that is still operational and does its job, but whose technology, architecture or level of documentation makes it hard to evolve. It's not that it's useless: it's that it can't change at the pace the business needs. According to 2025 data, 62% of organizations still depend on this type of system.
Because they support critical processes, contain business logic accumulated over years, and their full replacement carries significant operational risks. Complete rewrites have failure rates above 40%. That's why incremental approaches — such as gradual refactoring — are more effective and safer.
No. Migrating the infrastructure to the cloud (Lift & Shift) improves availability and elasticity, but it doesn't resolve the application's technical debt. If the code is still a monolith with no tests, no documentation and fragile dependencies, the problems persist. Real modernization intervenes in the application, not just its infrastructure.
It depends on the scope. A diagnosis can be completed in one to two weeks. A full refactoring toward cloud-native can take 8 to 16 weeks, depending on the complexity and size of the system. Novis's approach is progressive: each iteration delivers verifiable value without having to wait until the end of the project.
More than it seems. Technical debt can consume up to 42% of development time. According to IBM, the average cost of a ransomware attack on legacy systems reaches USD 5.08 million. And Gartner estimates that companies spend up to 70% of their IT budget "maintaining what already exists." The cost of not modernizing doesn't show up as a budget line, but it erodes profitability and the ability to compete.
Three things: first, we combine automated code analysis with business understanding (what we call "digital archaeology"). Second, we don't rewrite from scratch: we refactor incrementally, with verifiable deliveries. Third, we deliver documented code, a CI/CD pipeline and knowledge transfer — so the next change is a controlled process, not a risky project.
