The Power of Legacy

(MoneyWatch)  When California state controller John Chiang said that he couldn't lower the pay of 170,000 state employees as Gov. Arnold Schwarzenegger ordered, his statement was less about intransigence than the power of legacy systems -- a power that the glamour-addicted high tech industry might profit from recognizing more often.

[T]he California controller, John Chiang, says the state's payroll system -- which uses a programming throwback known as Cobol, or Common Business-Oriented Language -- is so antiquated it would take months to make the changes to workers' checks.

"In 2003, my office tried to see if we could reconfigure our system to do such a task," Mr. Chiang told a State Senate committee on Monday. "And after 12 months, we stopped without a feasible solution."

Consider the magnitude of that statement for a moment: the state of California, home to Silicon Valley, is incapable of changing its system for payroll, one of the fundamental business processes.

Cobol doesn't come up as a regular topic in many cocktail parties, but it is pervasive. All the estimates I've seen of how many Cobol lines are still running are numbered in the hundreds of billions. Gartner still considers robust Cobol support to be a strength when analyzing enterprise application servers. And you know someone has to be using Cobol if people are willing to write a free GNU version of a compiler.

That's a short way of saying that Cobol is just one old technology that offers a lot of market opportunity to companies today. For example, one company has a compiler that converts Cobol into Java classes so it can run portably over a range of machines. Companies make money migrating Cobol from mainframes so a company has flexibility in keeping or selling a subsidiary or facility. Companies don't have to be an IBM or Fujitsu, in the mainframe business, to make money off Cobol.

What about other legacy technology alphabet soup, such as PL/1, CICS, RPG, Fortran, Algol, APL, DB/2, assembler? Each has users, perhaps not as many as Cobol, but significant nonetheless. And the opportunities -- porting, translation, maintenance, new platform support and outsourcing, to mention a few -- are significant, as the prospects are generally going to be larger, better established businesses that have money to spend. Need and money sound like a great pair of customer qualifiers to me. Maybe you won't be considered "cool," but you can cry all the way to the bank.

Mainframe computer image courtesy of Lawrence Livermore National Laboratory