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Cost guide background for Legacy System Modernization

Legacy System Modernization Cost Guide

Transparent pricing breakdown and factors affecting your project investment

Quick Summary

Legacy system modernization costs vary dramatically by approach. Simple lift-and-shift migrations: $40,000–$150,000. Re-platforming with cloud-native features: $100,000–$250,000. Complete re-architecture into microservices: $200,000–$1,000,000+. Enterprise projects typically invest $300,000–$600,000 for comprehensive modernization over 6-12 months.

Pricing Tiers

Simple
$40,000 - $150,000
2-4 months

Basic features, minimal customization, standard design

Most Popular
Medium
$150,000 - $400,000
4-8 months

Custom features, integrations, advanced functionality

Complex
$400,000+
8-18 months

Enterprise-grade, complex architecture, extensive features

Cost Breakdown

Assessment & Planning

10-15%

Code analysis, dependency mapping, risk assessment, migration strategy

Architecture & Design

15-20%

Target architecture, microservices design, API planning, data migration plan

Code Migration & Refactoring

40-50%

Code conversion, testing, debugging, feature parity, performance optimization

Data Migration

15-20%

Data extraction, transformation, loading, validation, reconciliation

Testing & Validation

10-15%

Integration testing, performance testing, security testing, UAT

Factors Affecting Cost

Migration Strategy (The 7 Rs)

High Impact

Rehost (lift-and-shift): cheapest, minimal changes. Replatform: moderate cost, some optimization. Refactor: expensive, complete redesign. Strategy choice determines 70% of total cost.

System Size & Complexity

High Impact

Lines of code, number of modules, integration points, technical debt. Systems with 100K+ LOC cost 3-5x more than smaller apps. Each major integration adds $10,000–$40,000.

Technology Stack Gap

High Impact

Modernizing from COBOL/mainframe to cloud-native costs significantly more than .NET Framework to .NET Core. Language conversion adds 40-80% to timeline.

Data Migration Complexity

High Impact

Simple database migration: $10,000–$50,000. Complex data transformation across multiple systems: $100,000–$300,000. Real-time zero-downtime migration: +50% cost premium.

Compliance Requirements

Medium Impact

HIPAA, SOC2, PCI-DSS, GDPR compliance adds $30,000–$100,000. Financial services regulations require extensive audit trails and security measures.

Parallel Operations Period

Medium Impact

Running old and new systems simultaneously during transition. Infrastructure costs double. Budget $20,000–$100,000/month for parallel run.

Pricing Models

Rehost (Lift & Shift)

Move applications to cloud with minimal changes. Fastest approach.

Best For:

Quick cloud migration, reducing data center costs

$40,000–$150,000

Replatform (Lift & Reshape)

Migrate to cloud with minor optimizations (managed databases, containers).

Best For:

Balance of speed and cloud-native benefits

$100,000–$250,000

Refactor / Re-architect

Complete redesign using microservices, serverless, cloud-native patterns.

Best For:

Maximum cloud benefits, scalability, future-proofing

$200,000–$1,000,000+

Replace

Replace legacy system with modern SaaS or build new application.

Best For:

Legacy systems with available modern alternatives

$150,000–$500,000 (custom) or SaaS subscription

Hourly / Time & Materials (Codexty)

Pay for actual hours worked. Flexible for assessment, migration, or refactoring.

Best For:

Phased modernization, uncertain scope, or ongoing legacy work

$25/hour

Hidden Costs to Consider

  • •Legacy system license fees during transition ($10,000–$100,000)
  • •Data center costs during parallel operations ($20,000–$80,000/month)
  • •Staff training on new technologies ($1,000–$5,000 per person)
  • •Downtime costs ($5,000–$50,000 per hour for enterprises)
  • •Change management and organizational transformation ($50,000–$200,000)
  • •Post-migration optimization and performance tuning ($30,000–$100,000)
  • •Documentation and knowledge transfer ($15,000–$60,000)
  • •Extended support for legacy system during transition ($10,000–$40,000/month)

Project Timeline

Assessment & Strategy

4-8 weeks
10-15% of total cost

Architecture & Planning

4-6 weeks
15-20% of total cost

Migration & Development

12-32 weeks
40-50% of total cost

Data Migration

6-12 weeks
15-20% of total cost

Testing & Cutover

4-8 weeks
10-15% of total cost

Compare Options

Maintain Legacy System

$50,000–$200,000/year (maintenance)
Pros:
  • + No upfront investment
  • + No disruption
  • + Known system behavior
Cons:
  • − Increasing maintenance costs (20-30% annual growth)
  • − Security vulnerabilities
  • − Inability to innovate or scale

Gradual Modernization

$100,000–$400,000 over 18-24 months
Pros:
  • + Lower risk
  • + Phased investment
  • + Continuous operation
Cons:
  • − Extended timeline
  • − Prolonged technical debt
  • − Complexity managing hybrid

Complete Rewrite

$300,000–$1,500,000 in 12-18 months
Pros:
  • + Modern architecture from scratch
  • + Eliminate technical debt
  • + Optimal cloud-native design
Cons:
  • − Highest upfront cost
  • − Highest risk
  • − Long implementation

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