Small changes vs rewrite components

Just wake up after long fly, Baggage is lost in the Chicago so have a fun yesterday evening. During the fly have many time to thinking about how to transform the legacy application to new technology and what is the best approach.
I hear a lot of time when people telling me if we have 24 million dollars and 3 year we may rewrite application but now we didn’t have big budget and time is limited.

Small changes vs rewrite components
In life exists two approaches how to move application to new technology
1. Horizontal – when rewrites one of the layer (UI, Business, DAL, …)
2. Vertical – when application splits into logical modules and rewrite everything starting from DB and finishing UI

The first approach is good when you have good layers divided by interface and this is approach is good for the End User since usability experience will be changed at once and will not have transition period.

Second approach mostly used to resolve two issues – scalability and improve application architecture. It allow to rethink about existing functionality, optimize code, optimize UI so general improvement of application.

So what to approach select when budget and time limitation occurs?
Per my understanding and feeling I would suggest the following
1. Define long term goal
2. Analyze performance and other most critical issues
3. Predict in 3 – 5 years how your customers will grow
4. Analyze available resources

Only after this make any decisions

For example if you have event now some troubles with scalability and your goal move to SaaS I would strongly suggest using vertical approach
If you comfortable with scalability right now and didn’t expect any significant changes in nearest future, architecture is quite good I would suggest use horizontal approach.

As the last thought don’t forget about approach 20 X 80 when you change 20 % of functionality what cover 80 % of client needs may be this is a good start for doing new application from scratch …