News

Study: APM Tools Saving Legacy Apps

• By Kathleen Ohlson
• August 29, 2005

CIOs are smitten with legacy apps again, but keeping decades-old behemoths running is extremely costly. IT departments rely on application portfolio management tools to ease this burden, so sales for APM tools skyrocketed 280 percent in 2004, according to a recent Forrester Research study.

Sales for APM tools accounted for $43.1 million in 2004, nearly tripling from 2003, Forrester says. The explosion won’t stop there—the research firm expects sales to reach $500 million to $700 million by 2008.

Forrester’s Phil Murphy is surprised at these results, saying organizations don’t know what to do with their legacy apps.

“There was this truism in the late 1990s: change your hardware and solve all these problems,” and that logic was faulty, says Murphy, author of the study, “APM tools will reach $500 million to $700 million by 2008.” “The growth of APM is evidence that folks came to this realization and asked themselves, ‘If we keep these apps we haven’t invested in several years, what are we going to do with them?’”

APM tools build a centralized repository of app metrics, such as the sizes of apps, and related business data. These tools read the source code across an enterprise and store it in the repository. As the repository is loaded, the tools record the relationships between the source code, including lines of code, data definitions and objects, and establish an inventory of apps. They provide IT with this information via dashboards containing standard reports, ad hoc query and compound data views.

These tools come as companies struggle to maintain their existing apps, while tackling compliance requirements such as Sarbanes-Oxley, Basel II and HIPAA. Seventy-six percent of IT budgets are earmarked for this maintenance, leaving just 24 percent for new investments, according to the study. Maintenance not only applies to mainframes, but to apps written in C, C++, Perl, Java and other modern languages.

“For maintenance as a percentage of IT budget to reach and exceed 76 percent of [a] budget is a staggering number,” Murphy says. “If they can reduce that number 10, 20 or even 30 percent, they’re listening.”

Allen Systems Group, BluePhoenix Solutions, CAST, HAL Knowledge Solutions, Information Balance and Metallect all offer APM tools. Other companies such as BMC Software, Computer Associates International, Compuware, Hewlett-Packard and IBM are pushing into the market.

“You have applications being built for over three decades, the CIO has only been there 18 months, and the business is at war with IT, which isn’t in line with the business goals,” Murphy says. IT departments never had tools for themselves, rather they had tools to build applications for business units, he adds. “APM is the first dashboard built for IT and it’s high time.”