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June 09, 2009

Companies Prefer Application Modernization - Forrester

By Raju Shanbhag, TMCnet Contributor

A new survey by Forrester Research states that updating important legacy applications is the top software initiative for companies this year. The company surveyed more than 2,200 IT executives and technology decision makers in North America and Europe for this report.
According to Forrester (News - Alert), updating "key legacy" applications was the top initiative for 64 percent of enterprises and 55 percent of small and mid size businesses. For 25 percent of enterprises and 20 percent of SMBs, updating and modernizing key legacy applications are "very important," according to Forrester. According to Forrester, companies opted for application modernization mainly because mainly to save costs.
According to Forrester, companies' software budgets will maintain relatively flat for 2009. For 81 percent of respondents, reducing IT costs remains an "important" goal and application integration was deemed an "important" goal by 77 percent of respondents.
“The costs of operating monolithic legacy applications makes them unsustainable, and these survey results show that firms are seeking efficient ways to modernize,” said Jean Pierre Garbani, vice president and principal analyst at Forrester. “Companies are willing to adapt their business processes to cheaper packaged software solutions rather than wait for custom applications. Automation is the key to IT’s future.”
If the companies can free up money from software budgets, they can support more innovative projects across their organizations. Right now, every bit of competitive advantage can help, so focusing on activities that cut overall operations costs or develop better customer offerings is paramount, says Forrester.
"The State Of Enterprise Software: 2009" report is currently available to Forrester RoleView clients and can be purchased directly.
In April of last year, the company had predicted that Web 2.0 companies, as a standard enterprise tool are going, will invest $4.6 Billion in it by 2013. The results will be integrated into their corporate computing environments. This spurred growth of companies will push existing leaders in social media like Facebook, MySpace (News - Alert), and Delicious into stiff competition to get ad funds to their sites, stated Forrester.

Raju Shanbhag is a contributing editor for TMCnet. To read more of Raju’s articles, please visit his columnist page.

Edited by Jessica Kostek

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