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Legacy modernisation surpasses ‘rip and replace’

~ legacy modernisation has five year ROI of 331 per cent ~

September 27, 2007

London, UK – According to an independent study, enterprises considering wholesale replacement of current mainframe applications (using Adabas and Natural) may achieve greater return-on-investment (ROI) from the targeted use of legacy modernization. Updating and extending – rather than ripping & replacing – these existing mission-critical systems has better long-term value.

The study was conducted by Forrester Consulting on behalf of Software AG, a global leader in business infrastructure software, who commissioned the research. Forrester analiysed four current Software AG customers using the company’s Adabas transactional database management system and its Natural programming language for most or all of their critical applications. The analyst house determined that legacy modernisation would produce a five-year return-on-investment of 33 per cent on a risk-adjusted basis, or €3,986,414 at net present value, with payback achieved in less than four months.

In speaking with these customers, Forrester found that “rip and replace initiatives were seen as less compelling, and unlikely to be cost-effective, after investigation into the relative ease of Web-enabling existing Natural applications supported by data in Adabas.” Forrester found that the case for legacy modernisation for the interviewed customers, in terms of return-on-investment, was most often the better choice over wholesale application replacement.

Furthermore, as users began to factor in the risk factors associated with replacing proven mission-critical systems with untested solutions, these arguments became even more compelling. “Software AG has invested more than $1 billion in Adabas and Natural and we continue to invest heavily in our research & development. What the study found is that significant customer value can be easily added via a targeted legacy modernisation program,” said Joe Gentry, CTO and Vice President, Enterprise Transaction Systems, Software AG. “Our most recent releases – Adabas 2006 and Natural 2006 – and complementary products position these systems today as full participants within a service-oriented architecture. As a result, enterprises can continue to depend upon our unsurpassed transaction speed and proven reliability for mission-critical implementations within this new computing paradigm.”

Customers interviewed for the study included the European subsidiary of a global automaker; a health insurance provider operating in the United States; a federal agency of the Australian government; and a French financial services firm. Based upon their real-world decision criteria, use-case scenarios and cost-structure, Forrester Consulting undertook a thorough analysis of the business case for both ‘update & extend’ and ‘rip & replace’ using its Total Economic Impact (TEI)™ Methodology. The findings were presented in the form of a composite case study. The study also pointed towards additional value within the current implementations that could be easily unlocked using existing, off-the-shelf tools, such as those associated with service-oriented architecture (SOA).

Customers in the study had initiated their due diligence due to concerns about the perceived obsolesces of their mainframe systems. However, as these customers investigated new versions of Adabas and Natural more thoroughly, including their ability to further streamline integration and update the user interface, they found that their initial concerns were largely unfounded. Furthermore, this process served to highlight the traditional strengths – transaction speed, scalability, ease-of-use and reliability – that these systems offer. According to the study, one company reported mainframe availability for Adabas of 99.999 per cent while “another company reported that its analysis indicated that since Adabas is the fastest database available, any other choice ‘would have been a step backwards.’”

The study also found that Adabas implementations typically required a smaller number of database administrators (DBAs), which reduced long-term operating costs. Furthermore, interviewed customers reported that new developers and programmers could readily adopt both Adabas and Natural with comparative ease, becoming proficient in as little as several weeks. Based on these findings, two companies in the study have already abandoned their replacement projects, another company was re-evaluating its migration plans, and the fourth did not proceed in the face of many man-years to replace systems. In addition, three of the companies reported that they have now had subsequent plans to develop new applications using Natural.

According to Software AG, legacy modernisation can be used to expand accessibility to core application functionality and data, and to update the underlying infrastructure to deliver greater operational flexibility and efficiency. The full study, The Total Economic Impact (TEI) of Maintaining Adabas and Natural, is available at www.SoftwareAG.com/TEI .

Executive quote

“Software AG has invested more than $1 billion in Adabas and Natural and we continue to invest heavily in our research & development. What the study found is that significant customer value can be easily added via a targeted legacy modernisation program,” said Joe Gentry, CTO and Vice President, Enterprise Transaction Systems, Software AG. “Our most recent releases – Adabas 2006 and Natural 2006 – and complementary products position these systems today as full participants within a service-oriented architecture. As a result, enterprises can continue to depend upon our unsurpassed transaction speed and proven reliability for mission-critical implementations within this new computing paradigm.”

About the company

About Software AG

Software AG is Europe’s largest system software company with a turnover in excess of €438 million per annum, and a global workforce of approximately 2,750 employees. It supports the mission-critical systems of over 3,000 customers globally in Government, finance, insurance, pharmaceuticals, retail and manufacturing. The company’s German parent company and other affiliates around the world have provided solutions specifically for the public sector since the company was founded in 1969. Worldwide, key public sector clients include the European Parliament, the State of California and the cities of New York, Munich and Bremen. Software AG (UK) Limited has been providing solutions to local authorities, government departments and agencies in the UK for over 25 years. Central government customers include PITO, the IND and the DVLA, with local authority customers ranging from the smallest – Rutland County Council to the largest – Birmingham City Council, demonstrating the scalability of the company’s approach. Software AG’s proposition is centred on its ability to combine its award winning process driven integration suite and enterprise transaction products into a common, service oriented (SOA) platform.

Contact details

For further press information and photography please contact:
Tulna Shah or Steven George at LEWIS
Tel: +44 (0) 20 7802 2626
Fax: +44 (0) 20 7802 2627
softwareaguk@lewispr.com
Internet: www.softwareag.com

For sales enquiries, please contact Nikki Newton at Software AG UK:
Tel: +44 (0) 1344 403 800
Website: www.softwareag.com

Supporting materials

The full study, The Total Economic Impact (TEI) of Maintaining Adabas and Natural, is available at www.SoftwareAG.com/TEI .

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