What Is Legacy Software? (Plus the Benefits of Using It)

By Indeed Editorial Team

Updated November 30, 2022

Published July 21, 2021

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

An open laptop shows code on the screen.

Legacy software refers to older software solutions that businesses continue to use even after they've become outdated. Although most companies update and replace their software programs regularly, older programs can sometimes offer unique benefits. Learning about legacy software can help you understand why enterprises might use these systems.

In this article, we discuss legacy software, explain who uses it and provide a list of reasons a company may use it.

What is legacy software?

Legacy software is an older version of a program or application that still functions even after newer updates or versions are available. Companies typically use legacy software when they have older technology systems. Older computers are often only compatible with software of a similar age, so it's easier for companies to use legacy software instead of purchasing new equipment. While using legacy software, information technology (IT) professionals need to observe extra security protocols, perform frequent data backups, convert files to compatible formats with new software and drivers and purchase additional storage.

Related: A Guide to the 12 Principles Behind the Agile Manifesto

Who uses legacy software?

Any company that relies on software and data systems may use legacy software to maintain an archive of business operations. IT professionals often work with legacy software since they typically manage business information systems. Business administrators may also work with legacy systems to access important information and business files to update new systems.

Here are some companies that may use legacy software:

  • Background checking organizations: Industries that perform background checks, like law enforcement and human resources (HR), may use legacy software due to the high volume of information and the complexity of the background checking system. Transferring the information to a newer system is challenging for organizations since data loss is risky.

  • Banks: It's common for banks to use legacy software since they handle accounts and transactions over long periods. They may use outdated software to ensure their accounts and transactions remain unchanged.

  • Retail: Companies in the retail industry may use legacy software so that they don't have to update all of their sales terminals. For example, if a grocery store uses older cash registers, it may cost less to repair them than to buy new ones for the entire store.

Related: System Software vs. Application Software: What's the Difference?

Tips for identifying legacy software

If you're updating a software program, it's helpful to know the existing software on your system. Knowing if you have legacy software may help you understand what software tools are compatible with your system and which adjustments you can make to help with functionality. Here are some factors to consider when identifying legacy software:

  • Publishing year: Consider the year your workplace implemented the software and also check the year that the software entered the market. While software developers don't have a precise definition of legacy software, most professionals consider a system outdated if it's over 20 years old.

  • Performance: Typically, legacy software runs slower and less effectively than newer software systems. Storage capabilities are constantly improving; legacy software often has much smaller data storage size and slower connectivity speeds.

  • Update availability: If a system completes regular updates, it likely has newer software. Legacy software rarely allows for updates since it can't maintain new software features and functions.

  • System compatibility: Typically, legacy software isn't compatible with other newer technology. For example, a company that wants to update its computer systems may also have to update its software since legacy software may not be compatible with the new devices.

  • Functionality: Legacy software may not have the same features as newer software, which can limit its functionality. For example, if a user has legacy software on their phone, they may only be able to make calls, rather than calling, texting and using the internet on their device.

  • Further development: Software developers can't develop legacy software any further. They can't change the software's features, enhance the functions or enable new operations.

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Why do companies use legacy software?

Companies may use legacy software depending on their needs and preferences. Here are several reasons companies use legacy software:

Preference

If legacy software meets the needs of a company and doesn't cause issues, then management may decide not to purchase newer software. This allows the company to save money and continue operations without retraining its staff. For example, if a store uses older sales software that runs well and allows employees to perform transactions properly. Management may decide to keep the current software until they find software solutions that better serve their business functions.

Related: What Is Software Development: Definition, Processes and Types

Familiarity

In some cases, a company may keep its older software because its staff is familiar with it. Introducing new technology can disrupt the pace of operations and may require extensive training. It can also be expensive to invest in new software and devices.

Related: Understanding IT Training and Training Options

Effort

Sometimes, transitioning from one software system to another can take a lot of time and effort. Employees may find it challenging to remain productive during the transition, affecting the company's bottom line. The business may also have to back up files, download information, or archive older data. Sticking with legacy software may help companies avoid the challenges of updating software.

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Data loss

When transferring to a new system, companies risk losing valuable data. Although it's uncommon, data may download incorrectly to the new software or become lost during data transfer. To avoid losing data, companies may perform a system backup or archive important information.

Related: What Is Data Security? Definition, Importance and Strategies

Specialization

Companies may have specialized software that's specific to their industry. Specialized software may help them complete necessary operations and give them unique abilities. For example, a retail company may have specialized software to track sales while retaining customer information. In some cases, finding new software that offers the same functionalities might be challenging.

Related: 10 Computer Software Examples (Plus Definition and FAQs)

Cost-effectiveness

It's often cheaper for companies to maintain outdated software than to buy new software. Typically, companies can make minor repairs to legacy software to ensure it runs well. The cost to purchase updated software can be higher than the repair cost, making it more cost-effective for some companies.

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