Are COTS products hindering your application portfolio modernization?

Organizations have to continuously assess and keep their IT portfolio current by leveraging emerging technologies to stay relevant and competitive. Staying current involves the ongoing modernization of their IT portfolio. Modernization encompasses infrastructure, application, information, and integration aspects and also involves leveraging newer technologies like Artificial Intelligence, Internet of Things, and Blockchain.

Many of the organizations are using a combination of custom-developed and Commercial Off-The-Shelf (COTS) applications for their critical business needs. In some organizations (dependent on the industry), COTS form more than 80% of the IT portfolio. Over the years, COTS applications have been a critical asset for organizations to set up and run their business and have brought excellent business value. As these organizations now work through their modernization journeys, they are dependent on the COTS at various levels.

Modernization involves a variety of approaches at each layer:

• Upgrading the hypervisor, OS, storage, and network
• Modernizing data/information leveraging information architecture patterns
• Modernizing integrations leveraging integration architecture patterns
• Modernizing application components including upgrading, replacing, repackaging, externalizing, re-architecting

For custom-developed applications, in the vast majority of the cases, the source code is available with the organization. Hence modernization approaches that require access to the source code are quite feasible.

For COTS applications, in the vast majority of cases, the source code is not available with the organizations. Hence modernization approaches that require access to the source code are not feasible without depending on the COTS vendor. Most COTS vendors are on a modernization journey themselves, but each vendor is at a different maturity in the journey and have their priorities and challenges. While some COTS vendors are leading the modernization journey, many of them are still lagging. In general, many COTS vendors are not able to fully meet the ever-increasing demands of the market.

How can organizations get started with the approach and plan for modernizing these COTS

As an organization assesses the portfolio of applications, it is crucial to understand the drivers and expected outcomes from modernization relating to the aspects like digitization journey and user experience. Some of the key drivers are user experience, scalability, resiliency, flexibility, better integration, time to market for new features, cost optimization, and regulations & compliance requirements.

Understanding the characteristics of the COTS applications is a critical factor in making optimal architecture decisions on the approach for modernization so that the desired business outcomes are achieved. COTS can be broadly characterized as follows:

• COTS application provides customization and configuration features, making it easy to enhance and configure the features.
• COTS application provides APIs that can be invoked by external applications improving the consumption of features from outside the COTS (e.g., from Systems of Engagement to enhance user experience)
• COTS application provides certified container images that can be deployed on container orchestration platforms like Kubernetes, making it scalable, resilient, flexible, and improving time to market.
• COTS application is based on Legacy technologies and has significant constraints on infrastructure and application modules, limiting the options for modernization.
• COTS application is conducive to adopting engineering practices like continuous integration, automated deployment, monitoring, and automated remediation.
• COTS application has an upgrade path to SaaS, hence bringing in benefits of that model.
• COTS application has frequent version upgrades with the required features.

These characteristics and the experience of the organizations vary from Industry to Industry and region to region.

Are you having similar drivers for COTS modernization? Are you or your clients facing similar challenges? What options do you have? How are you addressing them? I will be very thankful if you share your thoughts.

COTS applications are a crucial part of many organizations, and they bring their benefits and help run the business. Organizations have to consider their COTS applications while executing their ongoing modernization journey.