Cloud Modernization: Benefits, Strategies, and Best Practices

If you’ve recently completed a cloud migration project, it might feel like the hard work is behind you. However, migration is only the foundation of your ongoing IT transformation journey.

Modernization is the next stage that unlocks the full value of the cloud by optimizing for performance, scalability, and innovation.

When migration projects are accompanied by application modernization initiatives in particular, your organization can reduce its bottom line and maximize cloud agility. However, to achieve optimal results, it’s important to understand the common challenges, key components, and strategies involved in cloud modernization projects.

What Is Cloud Modernization?

Cloud modernization is an ongoing process in which an organization optimizes its applications, data, and infrastructure to best leverage cloud-native solutions. Rather than a simple “lift and shift,” it typically involves deeper changes, such as replatforming, refactoring, or rearchitecting.

Whereas migration involves moving from on-premises infrastructure to a cloud environment, modernization involves regular improvements that continuously drive measurable business value.

Application modernization often takes center stage. However, the most effective cloud modernization strategies also extend to:

• Database modernization, including the adoption of cloud-native databases and analytics platforms
• Infrastructure automation using Infrastructure as Code (IaC) and artificial intelligence for IT operations (AIOps)
• Operational transformation, embracing DevOps, FinOps, and SecOps practices

Cloud modernization can occur alongside broader legacy modernization efforts, including the adoption of Infrastructure as a Service (IaaS). At any scope, optimizing for cloud computing brings needed flexibility, scalability, and reliability to a business. Once the upfront work is complete, it often proves to be more cost-effective than maintaining legacy frameworks.

Why Is Modernizing Cloud Systems Important?

Modernization is a great way to unlock the full potential of the cloud. While some businesses may shy away from cloud transformation projects due to their complexity and cost, modernization can help organizations achieve critical goals such as:

• Improving customer satisfaction: Deliver the fast, reliable, and personalized digital experiences that your end users expect.
• Easing regulatory challenges: Meet evolving compliance standards by improving data visibility and security with more auditable workflows and continuous monitoring.
• Leveraging emerging technologies: Get the flexibility and scalability needed to integrate artificial intelligence and machine learning (AI/ML), automation, and advanced analytics.

As cloud technology advances, modernization projects can keep driving more business benefits.

What Are the Benefits of Cloud Modernization?

Cloud modernization can reduce costs, improve scalability, bolster compliance, support performance, and drive innovation for businesses.

Cost Efficiency

Cloud modernization allows businesses to fully utilize cloud-based services and pay-as-you-go models to reduce expenses, especially those associated with infrastructure and licensing. Organizations are able to further boost cloud ROI by leveraging cost optimization strategies such as:

• Using spot instances
• Using reserved instances for predictable workloads
• Leveraging savings plans offered by AWS, Azure, and other providers
• Rightsizing resources
• Utilizing auto-scaling
• Implementing cost management tools to optimize cloud spending

The cloud can also be more cost-efficient because it reduces the amount of capital expenditures a business needs to make. Organizations often achieve a lower total cost of ownership (TCO) as a result of modernization.

Scalability and Flexibility

With traditional frameworks, it’s hard to scale resources up or down when demand fluctuates. Modernized applications can automatically adjust to meet demand, scaling only the components that need extra capacity for optimal performance. 

With cloud modernization, businesses can access the resources they need, de-provisioning them when they’re no longer necessary, much more easily than with traditional monolithic applications.

Improved Security and Compliance

As cyber threats become more sophisticated and regulatory guidelines become stricter, more businesses are leveraging modernization projects to strengthen cloud security and compliance measures. Optimizations can unlock the value of identity and access management (IAM) features, AI-powered monitoring and incident response, data security controls, and more security capabilities, all abiding by compliance regulations.

Additionally, modernization projects increasingly align with Zero Trust principles that strengthen authentication. They also help organizations leverage cloud-native security posture management tools for continuous compliance and automated threat response.

Enhanced Performance and Reliability

Cloud modernization projects improve resilience by strengthening the ability of applications and workloads to withstand and recover from failures and disruptions. The right optimizations can equip businesses with enhanced backup and recovery, automated recovery, high availability, incident response, and mitigation.

Faster Innovation

Cloud modernization also comes with the benefit of access to new tools, integrations, and technologies. Businesses can use these resources to innovate more quickly. Microservices, continuous integration/continuous development (CI/CD) pipelines, serverless computing, and other modern approaches can reduce time to market for new products and services.

5 Strategies for Cloud Application Modernization

There are a few main strategies for modernizing applications for the cloud. These projects often involve significant effort, from targeted code changes to complete rebuilds, or repurchasing to cover key capabilities.

Although these examples focus on application modernization, many organizations take a parallel approach by also modernizing their data platforms, infrastructure management, and security operations to achieve full cloud maturity.

1. Replatforming (Lift and Reshape)

Replatforming is a common cloud application modernization strategy that’s more advanced than a “lift and shift” but not as labor-intensive as rebuilding or refactoring. It is also known as a “lift and reshape.”

During replatforming, small changes may be made to the application code, but the core structure remains the same. This approach can be optimal for low-complexity applications that only need minor improvements to perform well.

2. Refactoring or Rearchitecting

A more involved strategy is refactoring, or rearchitecting, which can mean a complete rewrite of an existing application into a cloud-native language. This requires code changes that improve performance and maintainability, but the way the application operates should stay the same. 

One common step in refactoring involves transitioning from monolithic apps to microservices or cloud-native architectures. A monolithic application is self-contained and tightly integrated, whereas microservices are smaller, independent components that can communicate through APIs. The structural shift can improve scalability, maintenance, and agility.

New AI-assisted tools can accelerate modernization by automatically assessing dependencies, recommending refactoring patterns, and generating migration-ready code.

3. Rebuilding

When organizations rebuild or redevelop, the application will be written completely from scratch. This ensures that it will be inherently cloud-native and can take full advantage of integrations and capabilities in the cloud.

A rebuild requires more upfront work and investment than other strategies, so it most commonly occurs when obsolete technology stacks or fundamental architecture limitations are at play. This effort is valuable when the legacy application will not work properly, regardless of how it is reconfigured.

Rebuilding can ensure that applications will work for longer and be more flexible to maintain and update.

4. Repurchasing

Repurchase, also known as “drop and shop,” is a strategy that involves purchasing new tools, often Software as a Service (SaaS) offerings from third-party vendors, to replace legacy systems. This approach may require a short transition period between the original application and the new solution, but with careful planning and configuration, businesses can keep downtime to a minimum.

5. Replatforming

A migration strategy that’s somewhere between rehosting and refactoring is replatforming. When an application is replatformed, some changes may be made to the code, and the application is moved to a new platform, but the data remains the same. One common example of replatforming is when a legacy application is moved to the cloud from an on-premises environment.

Common Components of a Cloud Modernization Strategy

Cloud modernization strategies often include a few common components, including certain architectural patterns that help organizations uncover greater business value.

Serverless Computing

With serverless computing, cloud providers can allocate and provision servers dynamically, instead of running the same level of resources continuously. This reduces over-provisioning and under-provisioning, which can optimize operational costs for applications with variable workloads. Serverless models such as Function as a Service (FaaS) enable event-driven workloads that scale automatically and reduce idle resource costs.

Containers and Kubernetes

Containers package an application into a portable unit, complete with its dependencies. In this packaged state, containers can run consistently across different environments. Kubernetes can automate certain processes with containerized applications, including scaling, deployment, and management.

Microservices

Microservices break out applications in a different way, breaking them down into smaller services that can be independently deployable. Modernizing applications in this way can improve development speed, reduce the likelihood of failures, and make it easier to scale.

Managed Services

Businesses may also choose to add managed services to the mix, which can automate maintenance and operation of certain tasks and services in the cloud. This can also include human intervention. Managed services can take the burden of administrative tasks away from IT teams, allowing them to reinvest their time and cost savings into new opportunities for innovation.

What Are Common Challenges Faced During Cloud Modernization?

Cloud modernization can help businesses remain competitive in a changing technological landscape, but projects can also be accompanied by new challenges that can derail operations.

Legacy Systems Integration

Integrating with legacy systems is often a complex process that requires considering many moving parts. Older architecture can be difficult to separate and adapt to modern systems. To integrate legacy systems effectively, businesses need to carefully examine their current applications and dependencies and decide what the best modernization approach will be.

Data Migration and Management

Data migration, which may occur when transitioning from a legacy application to a cloud-based solution, can also be a complicated task. During data transfer, organizations may experience issues with data integrity, hindering the accuracy and consistency of their information. This often occurs as a result of mismatched data fields, duplicated data, or corruption.

To avoid downtime, data needs to be compatible in the new cloud environment, properly formatted, and compliant with relevant regulations.

Upholding data security can also be a challenge, especially when managing personally identifiable information (PII). Implementing encryption, robust access controls, and similar tactics is crucial to safeguarding sensitive data throughout the cloud modernization process.

Skills Gaps and Workforce Transformation

It’s not uncommon for businesses to face an IT skills gap when working toward cloud modernization. Many of the methodologies necessary to effectively optimize applications and infrastructure in the cloud are not areas of expertise for employees with a background in traditional IT frameworks.

The hurdles don’t always stop there. Here’s how Ravikrishna Yallapragada, a Google Cloud Platform (GCP) expert, explains the ongoing challenge of building internal cloud expertise on Ep. 17 of TierPoint’s Cloud Currents podcast:

“There is a shortage of a lot of people, talent in [the cloud] space. Once you have some talent, you need to ensure that you retain the talent, and then make sure that they build their skill set and do the modernization – whatever is required.”

– Ravikrishna Yallapragada, Senior Manager at Accenture Google Business Group

When internal skills shortages rise, businesses need to decide whether they have the time and resources to invest in upskilling or hire new employees, or if bringing in experienced cloud service providers is optimal for their modernization objectives.

Managing Costs and ROI

Modernization projects can also become expensive quickly. Establishing a budget and constantly monitoring spending are vital for managing costs and maximizing cloud ROI. Some expenses businesses should keep in mind when budgeting include network infrastructure expenses, data egress fees, and regular operational costs. You may also have costs from hiring managed services providers. Including these figures in an estimate can prevent sticker shock later on.

Best Practices for Successful Cloud Modernization

A successful cloud modernization requires solid planning, identification of efficiencies, implementation of automations, and continuous improvement after the project—across applications, data, infrastructure, and operations.

Defining Clear Goals and Roadmaps

Establishing clear, measurable objectives before initiating modernization will help your organization determine whether you have met your goals. For example, you may aim to achieve 20% in cost savings within a certain time frame. It’s also important to prioritize your goals based on what will make the biggest impact, and, potentially, what will be a feasible project to start with.

Continuous Integration and Continuous Delivery (CI/CD)

Adopting a DevOps approach can be a fundamental step in cloud modernization, reducing bottlenecks and accelerating development timelines long-term. An integral part of this is continuous integration/continuous delivery, which modernizes the delivery of software development and deployment.

In a CI/CD pipeline, the steps that are taken to deliver software, ranging from code commits to full production deployments, are automated. This reduces the number of human errors, decreasing the risk of downtime and speeding up software delivery.

Additionally, CI/CD pipelines in the cloud allow for seamless integration with cloud services. Beyond supporting the modernization of applications, this enables organizations to:

• Automate resource provisioning
• Manage infrastructure as code
• Take advantage of cloud-native benefits to amplify software delivery processes

Ongoing Cloud Cost Optimization

Businesses may also choose to adopt a cloud financial operations (FinOps) culture that promotes financial accountability by bringing together financial, business, and technology teams to make data-backed decisions on cloud spend. Optimization strategies can include rightsizing resources, implementing auto-scaling, taking advantage of reserved instances for predictable workloads, and de-provisioning resources that aren’t being used.

Strengthen Your Cloud Modernization with TierPoint

The possibilities for cloud modernization are expansive and growing. As the cloud advances, a comprehensive strategy that drives continuous improvements to your applications and systems can help you achieve greater cost savings, scalability, and performance than ever before.

TierPoint can build you a tailored roadmap that prepares you for emerging technologies, improves the end-user experience, and maintains compliance. Learn more about what we can do for your IT team.

FAQ’s