Digital transformation — the process of upgrading outdated applications and workflows with cloud technologies and digital processes — is essential but often fraught with challenges. According to Harvard Business Review, while 89% of large enterprises are in the midst of digital and AI transformations, they’ve only realized 31% of the expected revenue uplift and 25% of anticipated cost savings. This gap highlights the complexity and risks of such initiatives.
The Genesis of Mechanical Orchard
Rob Mee, the former CEO of Pivotal, was deeply inspired to address these challenges after years of working with enterprises managing legacy infrastructures. In 2022, Mee founded Mechanical Orchard, a startup dedicated to leveraging AI-enhanced tools and cloud environments to modernize aging applications and business services. The company’s approach aims to mitigate the risks associated with legacy system modernization, which many IT leaders view as a daunting task.
“The stakes involved in modernizing critical legacy systems have left many IT leaders feeling the risk is not worth the reward,” Mee explained. “However, as outdated software becomes an existential threat to businesses, there’s simply no more room to delay the inevitable.”
Pivotal, which faced major difficulties during its lifecycle, saw its stock price drop by more than 40% after a poor earnings report, eventually being acquired by VMware for $2.7 billion — a steep decline from its peak. Despite the challenges, Mee remains optimistic about the future of Mechanical Orchard. The company is already seeing significant interest from sectors like retail, logistics, manufacturing, shipping, and financial services, where legacy IT systems pose a considerable challenge.
Innovation Through AI and Cloud Technologies
Mechanical Orchard’s unique approach leverages generative AI to act as a “pair programmer,” enabling the automatic rewriting and creation of software for companies. While using AI for programming comes with inherent risks, Mee emphasizes that developers are always involved to debug and verify the final product.
Although Mee declined to disclose the specific generative AI platform Mechanical Orchard uses, the company’s process revolves around deep analysis of legacy systems. They break down existing systems, understand their behavior and dependencies, and then rebuild the system in cloud-native code that replicates the original system’s functionality. The key benefit for clients is that they own the new cloud-based code and can deploy it at their discretion.
Funding and Growth
In a notable sign of confidence, Mechanical Orchard recently closed a $50 million Series B funding round, led by GV (formerly Google Ventures), bringing its total funding to $74 million. Mee revealed that the funding was unsolicited, as the company wasn’t actively seeking investment, but the partnership with GV presented a valuable opportunity for expansion.
The Competitive Landscape
Many companies, including storage giant Box, have launched initiatives or divisions to support digital transformation. Box, for example, ran a consulting division called Box Transform to assist organizations with the complexities of their own digital transformation processes. What sets Mechanical Orchard apart is its use of generative AI, alongside the expertise of developers, to rewrite and modernize legacy systems efficiently.
Plans for the Future
Mechanical Orchard plans to use its new funding to ramp up research and development, particularly to enhance its AI capabilities. Currently, the company has around 90 employees spread across offices in the U.K., Ireland, Italy, and Germany. As the demand for legacy system modernization continues to grow, Mechanical Orchard is well-positioned to make a lasting impact on the digital transformation space, helping enterprises bridge the gap between outdated infrastructure and modern, cloud-based solutions.
Conclusion
With the digital transformation journey often proving to be a daunting and risky venture for many enterprises, Mechanical Orchard is carving a niche by providing a scalable solution to modernizing legacy systems using AI and cloud technologies. As they continue to grow and innovate, their approach could be a game-changer in industries struggling with outdated infrastructure.
