Since 2004, Belitsoft has been guiding businesses away from outdated software that holds them back. The company helps its partners regularly upgrade their current software systems and implement new ones on time and within funding.

Let’s be honest: enterprise IT has relied on legacy systems for many years. They have helped with everything from medical records to financial transactions. But today, we are watching the shift to the data-driven, digital-first age when efficiency, scalability, and agility are critical. And that’s exactly why the migration of legacy applications has become so important.

Nowadays, legacy migration is a strategic imperative rather than just a technical initiative. Agile rivals that can introduce new products in days as opposed to months are catching up to businesses that keep putting off modernization. 

Migration allows companies to unlock operational efficiency, reduce costs, bolster cybersecurity, and improve compliance. In industries like finance, healthcare, and manufacturing, legacy modernization can also mean the difference between regulatory fines and uninterrupted operations.

This report dives deep into the trends driving legacy migrations this year, what technologies are involved, and how organizations can stay ahead of the curve. If you’ve been thinking of tackling your legacy stack, now is the time.

Typical Legacy Application Types Still in Use

Legacy systems are still very common in the digital age. Many businesses’ core operations in 2025 are still carried out by mainframes, monolithic ERP platforms, COBOL-based financial software, on-premises CRMs, and even antiquated .NET or Java applications.

A brief summary of the most popular legacy systems that are still in use is provided below:

• Mainframe Systems: Especially in banking, insurance, and government.
• Client-Server Applications: Built using technologies like Delphi, VB6, or Oracle Forms.
• ERP platforms that are monolithic are frequently hosted on-site and offer little flexibility.
• Custom-Built Applications: Developed in older Java versions, COBOL, Pascal, or other legacy languages.
• Desktop-Only Applications: Inflexible tools that can’t scale or integrate with cloud services.

So why are these systems still around? Because they work. They’ve been reliable, secure (to a degree), and deeply embedded into operations. But the issue is they’re now bottlenecks. Updates are risky, integrations are painful, and finding developers who can maintain them is becoming a nightmare. 

Nevertheless, I have no doubt that a lot of businesses are stuck because of two major errors: a fear of obstacles and a fixed business mindset. You must first avoid being skeptical of innovations. Second, without embracing the difficulties that accompany any changes, nothing can be accomplished.

With twenty years of experience as the Chief Innovation Officer of a software development company, I have witnessed numerous instances of businesses going through all five phases of change acceptance. Ultimately, they realize that it is inevitable in an ever-evolving global economy.

So, more businesses in 2025 will have to decide whether to modernize or fall behind. 

Which Factors Fuel Legacy Software Migration

From being a trendy catchphrase, “cloud-first” is now a required business policy. Boards and executives demand agility, scalability, and resilience – and the cloud delivers on all fronts.

Using up-to-date tooling is only one aspect of digital transformation. It’s about rethinking how technology can provide value. This vision cannot be supported by legacy applications by design. Because of this, modernization is frequently the first step in a roadmap for digital transformation.

Nearly all Fortune 500 companies have cloud-first or cloud-native initiatives in place as of 2025. In order to satisfy public demand and operational efficiency objectives, even public sector organizations have changed course and accelerated digital modernization.

From hybrid to multi-cloud to full cloud-native environments, the push to modernize is no longer optional. It’s a core part of staying relevant in today’s hyper-digital economy.

Technologies Behind the Current Legacy Migration Trend

Cloud Computing Driver

Public, Private, and Hybrid Cloud Options

Cloud computing is the bedrock of legacy system modernization. The flexibility it offers makes it a top choice for tech executives in 2025. Whether it’s public cloud for scalability, private cloud for security, or hybrid cloud for a balance of both – cloud options allow enterprises to tailor their infrastructure to their needs. Because hybrid cloud allows for gradual migration, it is especially popular in 2025.

SaaS, PaaS, and IaaS in Migration

IaaS helps businesses to migrate their legacy apps to cloud infrastructure with almost no code modification.

PaaS offers a development environment for extending or rewriting legacy applications. It’s perfect for creating container-based applications or microservices.

SaaS enables companies to completely replace legacy apps with contemporary cloud solutions, like Salesforce replacing on-premise CRM.

Containerization and Kubernetes

Fruits of Containerizing Legacy Applications

Instead of rewriting an entire legacy app, companies can encapsulate it in a container – an isolated, portable environment that runs anywhere. This means that the legacy application can run on modern hardware without significant rebuilding.

Docker is now the most popular containerization platform, and its ecosystem is stronger than ever. Businesses benefit from faster deployment times, better consistency across environments, and simpler rollback in the event of failures when they containerize legacy apps.

An additional advantage? Containers use fewer resources than virtual machines. Additionally, containerization opens the door for the incremental conversion of monolithic legacy applications into microservices.

Kubernetes for Orchestration

Kubernetes automates deployment, scaling, and management of containerized applications. Kubernetes enables legacy apps to run at enterprise scale with features like load balancing, auto-scaling, and self-healing. This tool is the de facto standard for container orchestration in 2025.  

Companies that use Kubernetes for migration often start with a “strangler pattern,” gradually replacing parts of the legacy application with modern services – to minimize disruption.

Additionally, Kubernetes easily integrates with CI/CD pipelines, which facilitates the downtime-free deployment of updates. The migration process is made easier by tools like Helm, Istio, and ArgoCD, which further improve the Kubernetes ecosystem.

Microservices Architecture

Breaking Monoliths into Microservices

Legacy systems are typically monolithic – everything is interconnected, making them difficult to scale or modify. 

This is addressed by microservices architecture, which divides applications into more manageable, standalone services that can be independently developed, implemented, and scaled. For example, instead of one massive ERP system, a company can design individual microservices for finance, HR, inventory, and analytics.

Microservices are commonly built using tech stack like Node.js, .NET Core, and Spring Boot. 

Integration Challenges and Tools

Of course, breaking down a monolith into microservices isn’t easy. Companies are facing many integration road blockers. That’s where service meshes like Istio or Linkerd come in. These tools allow our clients to oversee, handle retries, enforce security policies, and control communication between services.

Also, we use API gateways like Kong or Apigee to manage traffic, enforce throttling, and expose internal services securely, and message brokers like Kafka or RabbitMQ help us in decoupling services for better fault tolerance and scalability.

AI Capabilities

Artificial Intelligence is no longer just about lifting and shifting code; now, AI is helping engineers deeply understand legacy systems before migration even begins. Tools powered by AI can scan millions of lines of legacy code and instantly identify dependencies, dead code, security flaws, and opportunities to jump on.

For example, we at Belitsoft benefit from AI-driven platforms like CAST Highlight and IBM Watson Code Assist that can analyze COBOL (or other old languages) and offer suggestions on how to refactor or modernize components automatically.

AI also helps in recommending the best migration strategy – be it refactoring, replatforming, or complete replacement. Today, this predictive capability ensures better planning, cost estimation, and risk assessment. It reduces project overruns and improves migration success rates dramatically.

Legacy Application Migration Ways

Rehosting (Known as Lift and Shift)

Nowadays, rehosting – also referred to as “lift and shift” – remains the most popular migration tactic, particularly for businesses that require rapid results. 

Imagine you are moving your house to a better neighborhood without changing the furniture inside. You get the benefits of improved infrastructure, better uptime, and cost efficiency – but the app still works (and looks) the same.

Rehosting is popular because it’s:

• Fast: Most applications can be migrated in weeks, not months.
• Low-Risk: Since there’s no refactoring, you avoid breaking complex interdependencies.
• Cost-Effective: It reduces data center expenses almost immediately.

Many enterprises treat rehosting as a first phase in a multi-stage migration journey. They opt for incremental modernization of the architecture once the apps are stable in the cloud.

Replatforming vs. Refactoring

When companies want more than just a lift-and-shift, they often explore replatforming or refactoring. These two strategies fall in the middle of the modernization spectrum and offer a balance between cost, speed, and technical transformation.

In 2025, organizations are increasingly leaning toward progressive refactoring – a phased approach where the most critical components are modernized first.

The key is choosing the proper strategy for the proper app. Not every system needs to be refactored. Some just need a slight platform tweak. The smartest companies in 2025 are using application portfolios to assess and categorize their apps by migration potential.

Rebuilding versus Replacing Applications

• The legacy system has deep custom logic that can’t be replicated with commercial software.
• The performance or security of the old system is beyond repair.
• To future-proof your stack, you’ll need real-time analytics, AI, and APIs.

In contrast, replacement works great when:

• The legacy system has standard, repetitive processes.
• Time-to-market is critical.
• The budget supports SaaS subscriptions rather than in-house development.

Industries Leading the Migration Wave

Financial Services

The financial sector is leading the pack in legacy modernization – and for good reason. Banks, insurance firms, and capital market players are under intense pressure to deliver real-time services, strengthen cybersecurity, and meet strict compliance requirements.

Many banks still operate on mainframe-based core banking systems, some of which were designed in the 1970s. These systems, though stable, are inflexible and hard to scale. Today, we’re seeing major financial institutions moving their core systems to cloud-native platforms, driven by customer demand and competition from fintech disruptors.

Some banks are refactoring their entire loan processing systems into microservices to improve flexibility. Others are using AI to analyze and convert millions of lines of COBOL code into Java or Go.

The result? Faster digital banking services, customer-oriented mobile apps, and better fraud detection.

In addition, regulatory demands – like PSD2, SOX, and AML guidelines – require better reporting and audit capabilities, which legacy systems struggle to support. Migration helps meet these needs while unlocking innovation at scale.

Healthcare and Life Sciences

The healthcare and life sciences domain is another major player in the 2025 legacy application migration race.

Many hospitals and research institutions still use outdated Electronic Health Record (EHR) systems, legacy lab information systems, or paper-backed imaging databases. These legacy platforms not only struggle to scale but also present significant risks in terms of compliance (HIPAA, GDPR) and patient safety due to poor data interoperability.

In the modern landscape, there’s a massive push to move these applications to cloud-based, interoperable, and AI-enabled platforms. Healthtech leaders are investing in refactoring their systems to benefit from real-time analytics, remote patient monitoring, and predictive healthcare through AI.

For example, a legacy EHR system may be rebuilt using FHIR (Fast Healthcare Interoperability Resources) standards, allowing seamless data exchange across systems and devices. Cloud-native platforms also enable telehealth, digital diagnostics, and genomic data processing at scale, none of which legacy systems can support efficiently.

From pharma to clinical trials, the entire life sciences ecosystem is embracing modernization to improve outcomes, meet strict FDA and EMA requirements, and reduce operational waste.

Government and Public Sector

Governments worldwide are notorious for clinging to outdated systems. Today, many government agencies still operate legacy applications built decades ago in COBOL, Fortran, or proprietary software stacks. But at last, a reckoning has been compelled by the necessity of agility, security, and digital citizen services.

Public domain organizations are now giving modernization top priority due to growing cybersecurity threats, public pressure, and financial limitations. From tax filing systems and benefits administration to defense logistics and immigration platforms – agencies are replacing clunky old apps with secure, scalable cloud solutions.

What’s driving this shift?

• Citizen expectations: People expect real-time access to services like renewing licenses, paying taxes, or applying for benefits.
• Security: Older systems are prime targets for ransomware and data breaches.
• Efficiency mandates: Governments are under pressure to cut costs and increase service delivery without increasing workforce size.

In 2025, countries like the U.S., U.K., and Canada have introduced the “Digital First” government plan that includes legacy migration as a core pillar. Many are working with cloud hyperscalers (AWS GovCloud, Azure Government) and specialized vendors to move their workloads securely and efficiently.

About the Author:

Dmitry Baraishuk is a partner and Chief Innovation Officer at a software development company Belitsoft (a Noventiq company). He has been leading a department specializing in custom software development for 20 years. The department has hundreds of successful projects in AI software development, healthcare and finance IT consulting, application modernization, cloud migration, data analytics implementation, and more for startups and enterprises in the US, UK, and Canada.