Application modernization maturity model

A maturity model for application modernization can help you pinpoint gaps and make plans with the most impact. The following diagram is based on the cloud-native maturity model and considers application modernization in terms of business and technical readiness. It assigns four categories of maturity: Traditional foundations, emerging pioneers, agile innovators, and digital champions.

The model rates business readiness and cloud-native maturity to show four levels of application modernization maturity and the potential for business and technical impact.

As your capabilities evolve, you can use this model to align your efforts with your business objectives, assess your progress, and ensure a balanced, sustainable transformation.

You can use the maturity model together with the application modernization life cycle to indicate the types of activities your organization is ready to execute. For example, organizations with a traditional foundation are ready to get started launching a cloud-native strategy, while digital champions can continue to innovate and optimize as the following diagram shows.

Traditional foundations

Organizations in this quadrant are characterized by outdated, monolithic architectures that hinder business agility, innovation, and development velocity. Application footprints typically span across traditional on-premises systems and lift-and-shift workloads that run on infrastructure as a service (IaaS) platforms.

Characteristics of organizations in this quadrant include:

• Limited business agility, diminished ability to respond to market changes, and less innovation.
• Outdated infrastructures that frequently constrain organizations, leading to scalability and security issues.
• Monolithic architectures and older technologies that slow development velocity.

If your organization is in this quadrant, it’s time to assess your digital estate and identify opportunities. Informed decision-making requires a thorough understanding the current state of your application portfolio. When you’re ready to launch your strategy, a proof of concept helps validate your approach.

Then you’re ready to lay a cloud foundation and begin benefitting from improved development and testing efficiency, cost management, and scalability. For the best results, we recommend focusing on stakeholder alignment, ensuring that your organization is prepared for the journey ahead. Communication is essential for streamlining organizational processes and optimizing resource utilization to lower operational expenses.

It’s also time to plan the migration and transformation of appropriate applications and move to Azure PaaS. For example, you can rehost Oracle and SAP applications, moving critical systems to Azure in a way that ensures business continuity and cloud benefits. To replatform VMware and Azure VMware Solution (AVS) plus Java applications, additional steps are needed to modify the underlying infrastructure for better integration with Azure PaaS offerings.

To accelerate innovation, consider implementing AI-driven business intelligence (BI). For example, you can set up and scale automations using the Microsoft Power Automate hosted robotic process automation (RPA) feature. Or modernize traditional BI apps, adding AI-driven insights using Azure Cosmos DB and Azure OpenAI Service or Microsoft Fabric with its built in AI capabilities.

Emerging pioneers

Emerging pioneers excel in business agility and innovation but face challenges with scalability and security. Their development velocity is better than Traditional Foundations, but they’re ready to improve. Characteristics of organizations in this quadrant include:

• A high ability to innovate and respond to market changes.
• Challenges with scalability and security.
• Improved development velocity with room for improvement.

If your organization is in this quadrant, you’re ready to expand your use of cloud-native architectures. This is the time to adopt modern technologies such as microservices architectures and serverless computing, enhance security, and begin replatforming your data. You might also want to replace outdated systems and replatform applications so they can fully use cloud features.

For Emerging Pioneers, we recommend the following application modernization pathways:

• Replatform applications to Azure App Service or Azure Functions for improved scalability and management.
• Modernize identity management by enabling single sign-on with Microsoft Entra ID as your single source of truth. Consider how business-to-customer and business-to-business scenarios would benefit.
• Replace cumbersome business workflows and integrations. Use Azure Integration Services to modernize business process workflows while preserving existing investments.
• Refactor parts of your application using PaaS options such as Azure App Service or using microservices hosted in Azure Kubernetes Service. For existing mission-critical business-to-business applications, introduce API-first design principles.

To accelerate innovation, try these pathways:

-Infuse AI into your LOB apps using AI Builder in Microsoft Power Platform. -Add AI-driven business process automation using Azure Document Intelligence and Azure Logic Apps with Azure OpenAI extension for Azure Functions.

Agile innovators

Agile innovators have robust scalability and security measures and fast development cycles, but they lag behind in innovation. If this sounds like your organization, it’s time to foster a culture of data-driven insights. Laying the groundwork for data modernization and application modernization helps prepare your organization to embrace AI and other innovative technologies. To move to the next level, you also need continuous improvement and process optimization. Azure DevOps and Azure Monitor can help.

At this stage, you can optimize their cloud usage for cost, performance, and security. You may refactor certain applications and adopt DevOps practices to streamline development and boost productivity.

Characteristics of organizations in this quadrant include:

• Limited business agility and innovation despite efficient operations.
• High scalability and robust security measures.
• Fast development cycles due to efficient processes and tools.

If you’re in this quadrant, we recommend the following application modernization pathways:

• Replatform your data to lay the foundation for application and data modernization. Looks for ways to infuse AI into your applications to demonstrate enterprise readiness.
• Rebuild business-critical applications using best practices in cloud-native development, such as serverless platforms, event-driven architectures, and enterprise messaging.
• Unify your CI/CD strategy across your organization. Adopt Azure DevOps to scale your operations and streamline development and deployment processes, enhancing efficiency and accelerating modernization efforts.
• Use AI to build innovation into your mission-critical apps.

Digital champions

At the pinnacle of application modernization maturity, digital champions excel in business agility, innovation, scalability, security, and development velocity. To maintain their leadership, these organizations use advanced technologies and automation to optimize operations and build new revenue streams.

Characteristics of organizations in this quadrant include:

• High business agility and innovation—qualities that enable them to respond quickly to market changes.
• Robust scalability and security measures.
• Optimized development cycles based on CI/CD practices.

If your organization is in this quadrant, we recommend the following application modernization pathways:

• Refactor. Modernize user experiences using AI-enabled personalization, adding recommender engines, and creating new applications using the latest technologies. Govern, secure, and build responsible AI practices.
• Rehost. Modernize AI inference apps to run anywhere, from cloud to the edge, using Azure Stack Hub and Azure Stack Edge with Azure Arc.
• Rebuild. Create your own enterprise copilot using Azure Open AI with Azure Cosmos DB, Azure Functions for Open AI Extensions, and Azure Search.
• Replace. Stay ahead by continuously replacing outdated components with the latest Azure services.

In addition, the following practices can help you sustain your leadership position:

• Adopt a mindset of continuous innovation. Regularly integrating new Azure services and technologies to keep your competitive edge.
• Continuously evolve your architecture to meet growing demands. Azure Arc, Azure Policy, Azure Purview, Azure Stack Hub, and Azure Stack HCI can help.
• Stay ahead of security threats with proactive measures and regular audits using Microsoft Defender for Cloud and Microsoft Sentinel.

Next steps

Continue getting started and review the roadmap for application modernization