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STRONG DEMAND FOR LEGACY IT MODERNIZATION SERVICES.

BluePhoenix Solutions (NASDAQ: BPHX), Cary, N.C. a leader in value-driven IT modernization solutions, has released the results of a commissioned study conducted by Forrester Consulting on behalf of BluePhoenix that demonstrate a strong demand from North American businesses for legacy IT migration and modernization services.

The study, conducted during the first quarter of 2009, was designed to corroborate the motivations that enterprises have when looking to undertake legacy modernization, to reveal specific technology solution needs, and to gain insight into their preferred modernization project models. Of 985 businesses that were surveyed, over 30% indicated that they had allocated budget to legacy modernization activities in the 2009/2010 timeframe.

The cross-industry survey included a rigorous analysis of the modernization needs of those 100 enterprises indicating a desire to migrate from legacy computing platforms, databases and programming languages. Of the businesses planning near term legacy system migration activities, 86% have allocated 10% or more of their total IT budgets for the work.

Findings suggest a significant proportion (25% to 44%) of mainframe platform users plan to initiate projects to reduce or cease the use of the legacy platforms within two years. Those surveyed cited a variety of reasons for wanting to modernize; the most important being the need to reduce operating and license costs, where 79% of those surveyed declared this to be key motivating factor. 76% of those questioned stated that the need to reduce the time and cost of adding new functionality

was an important or critical driver. Nearly two thirds of those surveyed had decided to modernize because of the limited availability of legacy skills.

Results relating to language migration plans show a large number (58% to 72%) of users of Natural, COOL:Gen, and PL/1 programming languages intend to migrate some or all of their applications to modern languages in the near future, with JAVA and C# featuring as prominent target environments.

Over 70% of the businesses surveyed indicated that they anticipate purchasing migration services. Over 77% of those surveyed stated that primary factors influencing the selection of IT modernization service providers were the availability of appropriate migration technologies, a track record in IT modernization, and market proven systems integration skills.

"The market for legacy modernization services is robust," said Yaron Tchwella, CEO of BluePheonix Solutions in response to this study. "The study provided us with another clear indication of the types of IT modernization services the market is looking for - and it is well-aligned with the portfolio of automated migration technologies and modernization services that we offer." He added, "Businesses clearly understand that legacy modernization requires specialist skills. Legacy system modernization is typically a one time undertaking and an increasing proportion of businesses now realize that it is more cost effective to outsource projects to proven experts, rather than utilize in-house resources that don't have the same levels of modernization experience."

About BluePhoenix Solutions

BluePhoenix Solutions (NASDAQ: BPHX - News) is the leading provider of value-driven legacy IT modernization solutions. BluePhoenix offerings include a comprehensive suite of tools and services from global IT asset assessment and impact analysis to automated database and application migration, re-hosting, and renewal. Leveraging over 20 years of best-practice domain expertise, BluePhoenix works closely with its customers to ascertain which assets should be migrated, redeveloped, or wrapped for reuse as services or business processes, to protect and increase the value of their business applications and legacy systems with minimized risk and downtime.

BluePhoenix provides modernization solutions to companies from diverse industries and vertical markets such as automotive, banking and financial services, insurance, manufacturing, and retail. Among its prestigious customers are: Aflac, Capita Group, CareFirst, Citigroup, Danish Commerce and Companies Agency, Desjardins, Los Angeles County Employees Retirement Association, Rabobank, Rural Servicios Informaticos, SDC Udvikling, TEMENOS, Toyota and Volvofinans. BluePhoenix has 15 offices in the USA, UK, Denmark, Germany, Italy, France, The Netherlands, Romania, Russia, Cyprus, South Korea, Australia, and Israel.

For more information, visit http://www.bphx.com.
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Publication:Mainframe Computing
Date:Jul 1, 2009
Words:655
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