Can AI fix legacy IT? The ‘economics don’t hold up,’ says former IBM strategist

ZDNET’s key takeaways

• IT modernization has been going on for decades.
• AI agents may add cohesion to modernization efforts.
• Only 10% of IT chiefs use agentic AI for modernization.

At some point in your career, or at many points, you might have been asked to help with an IT modernization program, porting applications from older systems, such as mainframes, to newer systems, be they on-premises or in the cloud.

Also: 5 ways to use AI to modernize your legacy systems

Modernization has been on CIO agendas for decades. Popular efforts have included web services, microservices, cloud, virtualization, and x86-based Windows and Linux servers. These efforts aimed to create more advanced and flexible systems.

When reflecting on these trends, it sometimes feels like modernization is always something that’s five years away. Now, it’s AI’s turn to modernize IT systems.

So far, AI implementations have bypassed technology modernization efforts, according to a survey of 2,000 senior IT decision-makers by IT services specialist Kyndryl. Only 10% of tech chiefs said they are applying agentic AI as a modernization tool. The burning question: Will AI eventually make a difference where earlier efforts have fallen short? Or is AI just another elixir in a never-ending quest?

Enter agentic AI

The results of modernization, as we’ve known it, have been less than stellar. Kyndryl researchers found that modernization is often just another expensive, time-consuming project.

“Only about half of those modernizing report achieving better IT operations, and less than half are seeing innovation gains,” the study’s authors observed.

“Nearly one in five, 18%, say their firms saw limited or unclear value from modernization efforts.” In addition, almost half of respondents said they are behind schedule and suffering cost overruns.

Also: The best AI leaders are ‘a little bit off the wall,’ says Google Cloud executive

Modernization must become more than swapping out mainframes or other legacy systems for something sleeker.

Enter agentic AI, which could shape the next wave of modernization. This time, instead of replacing mainframes and other legacy systems, the focus is on expanding tangible business capabilities.

“Cost reduction and legacy escape are no longer the leading motivations to modernize,” reported Kyndryl. “As AI increases demand on nearly every element of IT, and as sovereignty considerations become more acute, leaders want their complex technology estates — a mix of old and new decisions — to work better.”

Also: 12 rules of agentic AI for successful enterprise transformation

Agents can operate autonomously while providing more visibility on dependencies between systems, both legacy and new. “Fewer than one in 10 organizations are fully confident they know those dependencies today, a significant technical blind spot,” the Kyndryl report stated.

“Agentic AI is showing early promise to address longstanding challenges in modernization and speed progress,” the Kyndryl authors added.

“Agentic AI is being used to map hidden dependencies, generate code, and create documentation — all traditionally time-consuming, error-prone processes. Organizations not using agentic AI for modernization are much more likely to be behind schedule than early adopters.”

Tomorrow’s legacy

However, modernization challenges remain despite AI’s promises. Even the most forward-looking organizations can find modernization to be an endless quest.

“IT modernization increasingly looks like a chronic condition,” agreed Andy Thurai, founder of The Field CTO and former chief strategist with IBM, commenting on the study.

“According to this report, four in ten enterprises are still running mainframes. We keep hearing modernization is the number-one mandate, yet the finish line is always 5 to 10 years out.”

Also: AI agent kill switch urged by Okta-led alliance — how businesses could make it work

Another issue is that “organizations are addicted to buying software,” said Thurai. “The legacy systems underneath it almost never get decommissioned. AI is now the latest shiny distraction from the grind of untangling that technical debt.”

CIOs must contend with a situation in which “vendors are pitching AI to IT leaders as the cure-all,” Thurai continued. “The economics don’t hold up. When AI drives infrastructure sprawl, the monthly bill becomes a black box. The report found that three in 10 leaders already worry AI-driven modernization will end in wildly unpredictable compute costs.”

Also: What workers are really using AI for — and what they aren’t

AI-based modernization may have its moment in the sun, especially for organizations “that went past the bolt-on chatbot,” said Thurai. “They’re using agentic frameworks as an orchestration layer to map out hidden technical dependencies, and then generating the missing documentation as they go. Agentic AI is speeding up initiatives that used to eat months of error-prone manual labor.”

In short, agents could be just the latest chapter of a nonstop journey. “Sooner or later, today’s AI-driven architectures are going to be the legacy environments somebody else has to modernize,” said Thurai.

Joe McKendrick

Contributing Writer

Joe McKendrick is an author and independent analyst who tracks the impact of information technology on management and markets. He has also served as co-chair of the annual AI Summit in New York since 2021. He has authored numerous research reports in partnership with Forbes Insights and Unisphere Research, a division of Information Today, Inc. Joe speaks frequently on AI, cloud, data, and enterprise computing topics at industry events and Webcasts. In a previous life, Joe served as director of the Administrative Management Society (AMS), an international professional association advancing knowledge within the IT and business management fields. He is a graduate of Temple University. See full bio