The Hidden Costs of a Legacy System

Still running on a legacy system? 

Perhaps your applications run fine (for now). And in uncertain times, the prospect of stumping up the capital investment for a new database estate can be a hard case to justify. This is an understandable perspective, to an extent. 

However, the problem with this is that the cost barrier of data modernisation is actually somewhat of a misnomer. You’re not necessarily saving money whilst running an older database.

In fact, the sums required to maintain legacy systems, such as an end of life database, usually outweigh the upgrade costs for a new system. 

The hidden costs of a legacy system are multifarious – here are a handful.

Ongoing Legacy System Maintenance Costs

Believe it or not, legacy systems can see your overall IT spend balloon to astronomical numbers. Take some major UK banks for example – running older architecture is costing them as much as 80% of their overall IT budget!

Much of this outgoing comes from ongoing technical maintenance – including the sourcing of increasingly scarce parts. When hardware becomes obsolete from a commercial point of view, it’s inevitably more difficult to acquire the parts. After all, there’s less demand so fewer are being made.

So, if you find yourself facing a problem on the hardware level – expect to be paying well above the asking price for the required parts.

And then there are extended support fees. 

Once Microsoft, Oracle, or your chosen database vendor begins winding down support for their servers, they may choose to offer extended database support beyond of the end of life, but it almost always comes at a hefty cost.

But of course, not all database providers offer support beyond end of life. And without regular updates, this therefore raises another major risk factor (and potential cost) – cyber security and the very real risk of a data breach.

Rising Risk of a Data Breach

Depending on the age, and popularity, of your existing architecture – you may find that you don’t receive extended updates at all. This is a problem from a cyber security standpoint.

Not only does database patching improve usability, add new features, and stabilise performance – it’s also a crucial means of receiving security-related patchsets. 

Without these, you’re at a far heightened risk of a cyber attack resulting in loss of data. Kaspersky approximates that ‘businesses with outdated technology are much more likely to have suffered a data breach (65%) than those that keep theirs updated (29%)’. 

And worse – the cost of a data breach for enterprise businesses using legacy systems is 47% higher than those with up-to-date technology*. Data breaches for for small and medium-sized businesses look no better, costing 54% more for SMBs running on legacy systems**.

Then factor in potential GDPR fines (which still apply to UK firms, post-Brexit) for improper handling of data, and the risk landscape for running on a legacy system looks more bleak.

The point is this – data breaches are already expensive both in fiscal and reputational terms, but with older architecture, you’re significantly increasing both the risk and cost of downtime due to the lack of updates.

And of course, without crucial updates, you’re also missing out on potential avenues of innovation.

The Impact of Technical Debt on Innovation

As we’re all aware, running a database is mostly about keeping the lights on in order to keep the wheels of industry turning.

This can lead to a reluctance to make any drastic changes to the current environment, whether it’s applying patches that could introduce issues or migrating.

The problem with this mindset is that it leads to stagnation and, eventually, technical debt. 

This means that the IT department spends more of its time fighting fires, trying to identify impacts on productivity, and working doubly as hard on day-to-day maintenance of an aging database.

Technology debt can therefore drain your IT budget without you realising how, preventing quality of life and process improvements. 

Ultimately, this stymies attempts to implement innovations that could allow your business to harness data in smarter ways, allowing for better decision-making, improving the customer experience, and ultimately – saving money.

The Cost of Acquiring Niche Knowledge

As one might expect with older systems, it’s increasingly difficult to hire people who actually possess the knowledge to properly support it.

And according to IBM, 92 of the world’s top 100 banks still rely on IBM mainframes.

This is a problem, because the knowledge required to operate such systems lies only in a select few. Naturally, the younger workforce are not going to possess these skills, nor desire to acquire them due to the lack of career growth opportunities.

There will typically only be a handful of qualified individuals with the relevant qualifications that meet your needs. And considering that hiring (and retaining) high quality DBAs is already a challenge for businesses, it’s no surprise that so many businesses choose to outsource this function.

This not only limits hiring some of the brightest, innovative talent, but it also drives up wage outlay significantly.

The Environmental Costs

And finally, there’s the environmental costs which affect both your bottom line – and the wider environment.

The truth is that older systems have far higher power draw and leak more heat. From an environmental perspective, this is a concern.

According to Nature Journal, ‘data centres use an estimated 200 terawatt hours (TWh) each year. That is more than the national energy consumption of some countries, including Iran’.

The journal continues to add that ‘one of the most worrying models predicts that electricity use by ICT could exceed 20% of the global total by the time a child born today reaches her teens, with data centres using more than one-third of that’.

More immediately, the direct concerns for your business are that higher power draw means higher utility costs.

A data modernisation strategy can help you migrate from an inefficient legacy system to more modern architecture. This helps mitigate some of these costs for both your business and the environment.

environmental costs of a legacy system

Research originally published by nature.com

Conclusion

So, whilst it might appear to be more expensive to migrate your legacy systems to a more modern database, the opposite is actually true.

It’s significantly less expensive than the practical realities of sticking with older architecture.

This poses the following question:

Can you afford to run a legacy system?

*Average cost of a breach for enterprise users with up-to-date technology stands at £617,005 versus £904,141 for users of legacy systems – a 47% increase.
https://www.kaspersky.com/blog/it-security-economics-2020-part-2/


**SMB users with up-to-date technology face costs of £54,617 – meanwhile a data breach for a SMB with a legacy database can cost as much as £84,141.
https://www.kaspersky.com/blog/it-security-economics-2020-part-2/

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