Application Modernization

Highlights

How the Micro Focus Enterprise Application Modernization solution:

• Enables developers to deliver up to 40% faster

• Reduces costs by moving workload to lower-cost platforms

• Frees up resources to deliver on new high-impact projects

Leveraging the value of enterprise applications

Enterprise Application Modernization 3

The Value of Existing Enterprise Applications 4

Modernization Drivers 5

Enabling Effective Modernization 7

The Micro Focus Application Modernization Offerings 8

1. Application Consolidation and Modernization 8

2. z/OS Application Modernization 9

3. Software Platform Rationalization 10

4. Application Migration and Modernization 11

5. Open Systems Application Modernization 12

The Benefits 13

Summary 14

Next Steps 15

Contents

2

Re-using working code satisfies new business demands in a fraction of the time it would take to re-write or replace business-critical applications.

Enterprise applications are at the heart of major corporations and the world’s economy. They process around 80% of all business transactions.

These business-critical applications have been tailored over decades to encompass unique value and deliver competitive differentiation. They are vital to the success of the business, yet a perception persists that it is difficult to update them sufficiently quickly to meet the accelerating pace of business change.

As a result, some companies have opted to replace their ‘Crown Jewel’ applications with off-the-shelf packages. Others have attempted to re-write their core applications in one of the latest computer languages.

For the vast majority of organizations, however, neither option provides the new capabilities needed in the timescales required. These projects often run significantly over time and budget or even fail completely, with severe consequences for the business. Re-writing applications is usually unnecessary and creates an unacceptable level of risk with minimal return on investment. Replacing them with packaged solutions inevitably eliminates the unique features that have been built up over the years, diminishing a company’s competitive advantage.

Enterprise Application Modernization provides a low risk, high return alternative to these strategies. Re-using working code satisfies new business demands in a fraction of the time it would take to re-write or replace business-critical applications.

This is because the ability of IT to respond rapidly to new business demands is seldom related to the language in which the applications are written. Rather, they are difficult to update for the simple reason that they are generally the largest and most sophisticated applications within an organization’s portfolio. In addition, much of the application expertise is restricted to a handful of key staff, and the tools used to update them have evolved little since the systems were first created.

However, these issues can be addressed with appropriate application understanding and effective modernization tools. This enables the heritage and value encapsulated in these applications to be rapidly re-used to deliver additional high-impact business capabilities in a low risk fashion.

Enterprise Application Modernization

3

4

• Investment Years of development and tailoring mean enormous investment and value

• Alignment The only accurate up-to-date definition of a company’s business processes

• Competitive Advantage Unique functionality that delivers true competitive advantage

• Reliability Tried-and-trusted business functionality, performing reliably day after day

• Performance High-speed transaction throughput and unmatched batch process performance.

4

The Value of Existing Enterprise Applications

Investm

ent

Performance

Reliability

Alignment

Com

pet

itiv

eA

dva

ntag

e

The Valueof Existing Enterprise

Applications

5

Companies today face a whole array of challenges that drive the need to continually modernize applications more frequently than ever before:

• Mergerandacquisitionactivitycreatesduplicationof application capabilities which drives the need to rationalize or integrate disparate systems

• Pressuretoreduceannualcostsresultinregularreview of hardware and software environments looking for rationalization and consolidation opportunities

• Frequentupdatestolegislationandtheneed for compliance and conformance mean constant application updates.

These types of challenges need to be met just to continue doing business in today’s world, but they are not adding value. To add value, IT must deal with a different set of challenges:

• Updatingapplicationstohelpsupportgrowthin new geographies

• Deliveringsystemstosupportentryintoadjacent markets

• Improvinguserinterfacesandfacilitiestoretaincurrent customers, cross-sell new products and attract new customers.

5

Modernization Drivers

Pressure to reduce annual costs result in regular review of hardware and software environments looking for rationalization and consolidation opportunities.

6

Consider the impact existing development teams could make if each developer could deliver 40% faster each day.

However, there are techniques to help overcome these challenges and enable IT to complete value-add projects faster, simply by making the most of current staff, their existing skills and the existing applications they understand so well:

• Providingdeveloperswiththebestpossibletoolsfor understanding, maintaining and modernizing existing applications. Historical mainframe-based tools, have not evolved with the times and are typically 40% less efficient than their contemporary equivalents used on Windows workstations. Consider the impact existing development teams could make if each developer could deliver 40% faster each day. These are the real gains developers are experiencing using workstation-based mainframe development tools. Such dramatic improvements free up a significant amount of resources to tackle value-add projects

• Exploitingapplicationunderstandinganddocumentation tools to enable flexibility in resourcing. Removing bottlenecks by ensuring existing staff can effectively work on multiple applications can have a major influence on IT’s responsiveness

• Beginexposingexistingcorebusinessfunctions in Service Oriented Architectures (SOAs). The advent of SOAs is bringing new life, and hope, to IT departments struggling to deliver flexible and agile business applications as existing business services held in existing systems can be opened up for re-use by existing and new applications

• Combiningnewserviceswithcontemporarytechnologies such as .NET or J2EE and associated user interface development tools to rapidly provide the tailored customer-centric user interfaces that business managers are demanding

• Movedatafromhistoricaldatabasesandconsolidate to relational databases to enable simpler access, easier integration and improved reporting on legacy data

• Rationalizingoutmoded4GLs,reportingtoolsand transaction systems to mitigate risk, remove bottlenecks and move towards a single architecture and technology stack

• Considermovingappropriatelegacyworkloadto lower cost platforms running Linux, Unix or Windows as part of cost reduction or server consolidation initiatives.

7

Enabling Effective Modernization

Drivers for modernization are ever-increasing and the challenges for IT are significant.

The Micro Focus APM Solution at Work

1. Application Consolidation and Modernization

These capabilities are used to help consolidate servers and systems by migrating applications from proprietary mid-range or mainframe platforms to IBM z/OS.

With its partners, Micro Focus can help efficiently move applications from any historical mainframe or mid-range platform, regardless ofthelegacy4GLor3GLlanguagetheapplicationsarewrittenin,or the proprietary databases they access.

During the transition any dependencies on proprietary languages, transaction systems or databases are removed, as the applications are converted to utilize the languages, databases and infrastructure systems already supported within the z/OS environment. Tools to automate any such conversions, sometimes by as much as 98%, are the key to reducing risk and keeping on schedule.

This not only reduces costs, while ensuring all applications fit in with strategic IT architectures, it is also the first critical step towards application rationalization and modernization using Micro Focus’ z/OS Application Modernization offering.

The Micro Focus Application Modernization Offerings

Micro Focus, with its unrivalled experience in legacy re-use, offers a range of Application Modernization offerings to unlock the valuable services and data within existing applications, for re-use on any platform and within Service Oriented Architectures (SOAs).

“This is a really impressive migration; the cost savings we have experienced since moving our entire application portfolio over to the IBM mainframe have been exceptional.” Dr. Lansbeat Loacker, Managing Director, UBS

8

UBS

As a result of previous mergers and

acquisitions, UBS ended up operating

and maintaining two different sets of

very costly mainframe environments,

resulting in significant operational

overheads and disparate IT groups.

To address these issues UBS decided

to consolidate all applications from its

Unisys 2200 mainframes to IBM z/OS.

In what is regarded as one of

Europe’s largest migration projects

UBS utilized Micro Focus’ conversion

tooling to automate 98% of the

conversion, completing the project

4 months ahead of schedule. UBS

estimated that savings resulting from

shutting down one set of mainframes

and consolidating all development,

testing and operations were in excess

of €100M.

2. z/OS Application Modernization

For organizations that have a strategic commitment to themainframe but who are struggling to open up existing applications and extend them to meet the needs of the business.

Micro Focus offers Windows-based environments to accelerate the development and modernization of applications which run on IBM z/OS. The Micro Focus environment works in tandem with existing mainframe tooling to enable development teams to perform 99% of their analysis, development and unit testing on dedicated Windows workstations. This increases productivity, shortens delivery timeframes and reduces mainframe utilization costs during development.

Maintenance, governance and compliance activities can be completed 40% faster, releasing critical resources to tackle the high-impact modernization projects which deliver new value.

Whether these projects require improved user interfaces, easier access to data or improved integration via SOA, Micro Focus’ contemporary modernization technology can address these needs considerably faster than utilizing traditional z/OS tooling.

“Having already successfully tested in the same technological framework ourselves, we are delighted that Micro Focus and IBM are working together around our SOA efforts. Since Micro Focus and IBM technologies are central to our SOA strategy, this integration is an important positive step for us.” Steve Wiggins, Chief Information Officer at Blue Cross Blue Shield of South Carolina

9

Blue Cross Blue Shield of South Carolina

BCBS had embarked on an enterprise

SOA initiative on IBM z/OS but their

initial solution was too expensive and

was not delivering the transaction

throughput required to meet future

business requirements.

After evaluating Micro Focus’

SOA modernization and support

capabilities on z/OS, BCBS deployed

the Micro Focus solution to help

them cost-effectively exploit the key

business services within its existing

legacy systems to enable IT to

respond faster to the business.

3. Software Platform Rationalization

Most large organizations have hundreds or thousands of applications developed internally or acquired over decades. Consequently, their portfolio includes applications written in a variety of languages, which use different OLTP systems and databases.

Diligent IT organizations regularly review their application portfolio looking for opportunities to rationalize the software platforms or technologies utilized in order to simplify the variety of software they license, manage and operate.

The key objective is simplification of the IT infrastructure, funded through the savings realized by removing the annual costs associated with proprietary or seldom used software.

The software to be rationalized is typically a proprietary third or fourth generation language, transaction system or database and the objective is to replace these with more standard software already available on the existing hardware platform.

With its partners Micro Focus offers the ability to rationalize software platforms by utilizing automated tools to:

• Convertproprietary4GLand3GLtopopularlanguages

• ReplacehistoricalOLTPsystemswiththestandardOLTP system on the platform

• Updatethedatabaseusedbyanyapplicationtoarelationaldatabase.

“Our aim was to reduce costs without compromising performance or impacting our end-users and the automated conversion provided by Micro Focus was key to enabling the bank to achieve these objectives while reducing the overall risk of the whole project.” Banca Intesa

10

Banca Intesa

Banca Intesa had a portfolio of

applications on its IBM mainframe

that utilized two different On-Line

Transaction Processing systems.

The bank was paying for two sets

of technology performing the

same role, there were obvious

operational overheads and having

two different architectures impacted

responsiveness. The bank therefore

turned to IBM and Micro Focus to

update over 23,000 programs to

utilize IBM CICS, rather than IBM IMS,

and update all user interface screens

appropriately. Using Micro Focus’

tools over 98% of the conversion was

performed automatically, dramatically

reducing risk and costs.

Tesco

Tesco’s current supply chain

management system monitors

and controls its entire in-store

inventory. The company has enlisted

the assistance of Micro Focus to

modernize and extend this z/OS

mainframe-based system so it can

also be rolled out in Tesco’s AIX data

centers to support its international

operations throughout the world

including the US.

4. Application Migration and Modernization

This offering is used by companies who would like to move application workload from mainframe or mid-range platforms to Linux, Unix or Windows servers.

Such servers now offer a robust and cost effective alternative to run today’s enterprise applications. These platforms also offer a great choice of competitively priced technology that can be exploited to serve the business better.

Micro Focus enables organizations to take advantage of such technologies, while making use of the intellectual property already built into existing applications.

This modernization approach is taken when IT have identified that the costs, risks or inflexibility of running an application or suite of applications on the exiting environment is the key obstacle to satisfying specific business requirements.

With its partners, Micro Focus can efficiently move applications from any historical hardware platform, regardless of the language the applications are written in or the databases or OLTP system they utilize.

This not only dramatically reduces costs, while deploying applications on the most optimum platform, it is also the first step towards Application Modernization using Micro Focus’ Open Systems Application Modernization offering.

“Elements of our common Operating Model are already in place and benefiting some of our businesses. Micro Focus’ modernization expertise is not only helping us maintain the momentum behind this strategic IT project, but is also playing a key role in the development of our United States presence. This project will help us meet our goal of opening our first store in 2007.” Colin Cobain, GroupITdirectoratTesco

11

The Micro Focus Application Modernization Offerings

The Micro Focus APM Solution at Work

5. Open Systems Application Modernization

This offering is utilized by IT organizations looking to run composite COBOL applications on Linux, Unix or Windows.

It includes a comprehensive range of capabilities to enable organizations to develop and modernize applications in an evolutionary, low risk manner by re-using as much of the existing application as possible.

Key capabilities include:

• Abilitytore-compileexistingCOBOLtoexecute virtually anywhere!

• Facilitiestoexposeandre-usebusinesslogicina Service Oriented Architecture

• AbilitytointegrateCOBOLwith.NETandJ2EE

• ToolingtoaddGUIorWebbaseduserinterfacesto existing systems.

“After attempting to re-write our entire POS system, Micro Focus came to us with a re-compile solution that not only re-used existing and proven business logic, but also enabled Hollywood Entertainment to meet critical financial objectives.” Martin Tromblee, Development Manager of Store Systems, Hollywood Entertainment

12

Hollywood Entertainment

To maintain cost effectiveness,

Hollywood Entertainment needed

to update its critical DOS based

point-of-sale (POS) system after

unsuccessful package replacement

and re-write projects.

Micro Focus provided Hollywood with

a way to quickly exploit its critical

COBOL applications to get its

point-of-sale (POS) system running

on the latest commodity hardware

running Windows POS while

providing a path to improved

integration with .NET.

The company rolled out its upgraded

system across 15,000 terminals,

re-using the entire 1.3 million lines of

COBOL code, to get the new system

working in just over three months.

The Micro Focus Application Modernization Offerings

The Benefits

The Micro Focus Application Modernization solution:

13

• Providestoolsspecificallytailoredtomodernizingexisting systems

• Enablesexistingstafftodeliverupto40%faster

• Freesupresourcestodeliveronnewhigh-impactprojects

• Reducescostsbymovingdevelopment,testingoreven production workload to lower-cost platforms

• Mitigatesriskthroughthere-useofprovenapplication functionality and by moving from proprietary technologies to open systems technologies

• Increasesagilitybyacceleratingtime-to-marketthrough the use of SOA

• Simplifiesinfrastructurethroughtherationalizationofplatforms, languages and databases.

Micro Focus offerings allow you to solve the real issues impacting IT responsiveness by enabling staff to truly exploit the value in existing systems to accelerate time-to-market.

Summary

Enterprise applications provide unique, mission-critical functionality. They represent enormous investment and deliver competitive advantage.

However, they have to move with the times and respond to ever-faster business changes. The question is how? Companies can adopt re-write or replacement strategies, but they risk long, costly projects and business disruption. Modernizing the existing applications is a far more practical, cost effective and less risky route to developing new business capabilities.

With its Application Modernization solution, Micro Focus provides a comprehensive portfolio of modernization options that enable organizations to rapidly integrate their existing applications with modern technologies, preserving their critical capabilities while delivering greater value to the business.

Micro Focus Application Modernization - a low risk, high return alternative to re-write or replacement strategies.

14

Next Steps

We believe that Micro Focus has a unique set of solutions to assist your organization. We can help enhance IT responsiveness by enabling staff to fully exploit the value in existing systems and accelerate time-to-market.

15

Value assessmentSchedule a one-hour session with one of our pre-sales consultants to discuss your Application Modernization strategy and learn how Micro Focus capabilities can align with your organization’s needs.

At the end of the session, we will leave you with a free report:

•LegacyRenewalStrategies-Ovum.

We will contact you within the next few days to see whether you would like to benefit from this free offer.

Kind regards

Stephen KellyCEO, Micro Focus

© 2007 Micro Focus. All Rights Reserved. Micro Focus is a registered trademark. Other trademarks are the property of their respective owners.

About Micro Focus Micro Focus provides innovative software that allows companies to dramatically improve the business value of their enterprise applications. Micro Focus Enterprise Application Modernization and Management software enables customers’ business applications to respond rapidly to market changes and embrace modern architectures with reduced cost and risk. For additional information please visit: www.microfocus.com

Micro FocusWorldwide

www.microfocus.com

Australia................... 1800 632 626

Belgium ...................... 0800 11 282

Canada .......... 877-772-4450 x1123

France ....................... 0800 835 135

Germany ................. 0800 182 5443

Ireland ................. +353 182 120 49

Italy ..................... +39 02 694 34 01

Japan ................... +81 3 5793 8550

Luxembourg .................. 800 23743

Netherlands ........ +31 23 5689 138

Norway ................ +47 22 91 07 20

Sweden ............... +46 850 901 258

Switzerland ............. 0800 564 247

United Kingdom .... 0800 328 4967

United States ...... +1 877 772 4450

Other Countries .. +44 1635 32646

For contacts worldwide- www.microfocus.com/contact