WSO2CON 2024 - Lessons from the Field: Legacy Platforms – It's Time to Let Go of Our Pet Servers

Legacy Systems – It’s time to say
goodbye to our pets

© Liquidity Services, Inc. All Rights Reserved. 2
Forward-Looking Information
This document contains forward-looking statements. These statements are only predictions. The outcome of the events described in these forward-looking statements is subject to known and unknown risks, uncertainties and
other factors that may cause our actual results, levels of activity, performance or achievements to differ materially from any future results, levels of activity, performance or achievements expressed or implied by these
forward-looking statements. These risks and other factors include but are not limited to the factors set forth in our Annual Report on Form 10-K for the fiscal year ended September 30, 2023, and subsequent filings with the
Securities and Exchange Commission (SEC). You can identify forward-looking statements by terminology such as “may,” “will,” “should,” “could,” “would,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,”
“potential,” “continues” or the negative of these terms or other comparable terminology. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results,
levels of activity, performance or achievements. There may be other factors of which we are currently unaware or deem immaterial that may cause our actual results to differ materially from the forward-looking statements.
All forward-looking statements attributable to us or persons acting on our behalf apply only as of the date of this document and are expressly qualified in their entirety by the cautionary statements included in this document.
Except as may be required by law, we undertake no obligation to publicly update or revise any forward-looking statement to reflect events or circumstances occurring after the date of this document or to reflect the occurrence of
unanticipated events.
To supplement our consolidated financial statements presented in accordance with generally accepted accounting principles (GAAP), we use certain non-GAAP measures of certain components of financial performance. These
non-GAAP measures include earnings before interest, taxes, depreciation and amortization (EBITDA), Adjusted EBITDA, Adjusted Net Income (Loss), and Adjusted Earnings (Loss) per Share. These non-GAAP measures are provided
to enhance investors’ overall understanding of our current financial performance and prospects for the future. We use EBITDA and Adjusted EBITDA: (a) as measurements of operating performance because they assist us in
comparing our operating performance on a consistent basis as they do not reflect the impact of items not directly resulting from our core operations; (b) for planning purposes, including the preparation of our internal annual
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expand our business. We believe these non-GAAP measures provide useful information to both management and investors by excluding certain expenses that may not be indicative of our core operating measures. In addition,
because we have historically reported certain non-GAAP measures to investors, we believe the inclusion of non-GAAP measures provides consistency in our financial reporting. These measures should be considered in addition to
financial information prepared in accordance with GAAP, but should not be considered a substitute for, or superior to, GAAP results. A reconciliation of all non-GAAP measures included in this presentation to the most directly
comparable GAAP measures is included in this presentation.
The following discussion should be read in conjunction with our condensed consolidated financial statements and related notes and the information contained in our Annual Report on Form 10-K as of and for the twelve months
ended September 30, 2023, and the Quarterly Report on Form 10-Q as of and for the three months ended December 31, 2023.

Who We Are
Liquidity Services operates the world’s largest
B2B e-commerce marketplace platform for
surplus assets powering the growth of the
Circular Economy.
To Power the Circular Economy, we:
• Sell, manage, and value surplus assets
across the globe in a broad range of
categories and conditions
• Maximize value recovery with the broadest
buyer base through our efficient global
marketplace platform
• Optimize and execute surplus management
strategies to achieve client business goals

Industries We Serve
Tapping our industry-specific market
and asset category expertise, we
provide strategic reverse supply
chain solutions that enable you to
solve your greatest challenges.
Liquidity Services enables thousands of organizations in every major industry worldwide to intelligently
capture the enduring value of surplus assets, benefiting their bottom lines.
•Aerospace & Defense
•Automotive Manufacturing
•Biopharmaceuticals
•Consumer Brands & OEMs
•Electronics Manufacturing
•Energy
•Fast-Moving Consumer Goods
•Government
•Industrial Manufacturing

The Industry Leader
in the Circular
Economy
15,000+
Trusted Clients
Worldwide
900,000+
Transactions
Completed Annually in
100+ Countries
5 Million+
Registered
Buyers
$10 Billion+
Completed
Transactions
130+
Fortune 1000
Global Clients
600+
Asset Categories
Experience
B2B | B2C
Multichannel Marketing
& Sales Strategies
LQDT▲
Publicly Traded
Since 2006 IPO
© Liquidity Services, Inc. All Rights Reserved.
5

Cattle vs. Pets
https://www.slideshare.net/gmccance/cern-data-centre-evolution
• Originally appeared in
2011/2012
• Credited to Bill Baker - talking
about SQL Server at MS and
scale out architectures
• Popularized by Tim Bell at
CERN

Then >
Now >
Extending the metaphor
Cattle, Pets, Chickens, and a Flock of Birds
>

What is a Legacy System?

WSO2CON 2024 - Lessons from the Field: Legacy Platforms – It's Time to Let Go of Our Pet Servers

This Photo by Unknown Author is licensed under CC BY-NC-ND

• Outdated Technology (pets)
• Difficult to Update or Extend
• Integration can be
Challenging
• Limited Functionality
• Poor Documentation
• Our customers hate it
• Purpose Built
• Beautifully Architected
• It has all our Data
• Our Customers Love it
• It was designed to last forever
Weighing the Merits of Legacy Systems
Image generated by DALL·E 3

One of our pets

Primary Goals:
• Modernize the technology
• Increase GMV via enhanced buyer experience
• Fully functional mobile site
• Introduce global navigation with cleaner page
templates
• Improve Site Search & introduce Recommendations
via 3rd
party engine
• Multi-language capability – International Expansion
• Utilize testing and new roll out strategies to reduce churn
and improve overall product acceptance
Timeline:
• UX Design – in process
• Development – in process
• Beta Site (public preview) – Q2FY22
• MVP1 (DNS conversion) – Q3-4FY22
Note: This project is focused on the buyer side experience that is
GovDeals and does not include the back-end seller tools.
GovDeals Modernization – Buyer’s
Experience
Sustain
Optimize
Transform
• Rebuild as a single page application backed by fully
orchestrated containerized services and
microservices/functions
• Replace onsite search engine with AI/ML powered
search service
• Introduce product recommendation engine
• Implement CI/CD pipeline for code deployment
• Leverage cloud automation for dynamic monitoring
and scale-out of web apps & functions
• Migrate hosting regions
• Remove Cold Fusion from the environment
• Retire the ‘pet’ servers hosting the site

Our Approach
Evolutionary not Revolutionary
Emphasized incremental delivery – introducing new
capabilities and user experience elements over time
Used A/B testing tools to control traffic ramp
Each increment would only occur after reviewing the
site’s KPIs

The results
• Increased GMV (Gross Merchandise Value)
• Improved Bid Rate
• YoY Organic traffic growth
• Achieved bulk of technical goals
Also….
• Received some negative customer feedback
(initially)
• Took longer than we originally anticipated
• Uncovered features that we missed
• Identified more opportunities to improve both the
application, services architecture, and IaC

Lessons Learned:
Stakeholder Alignment
• What is the intended business outcome?
• How are you going to measure it?
• Who are the different stakeholders you need to satisfy?
• How do they each view the current system?
• Do you have a shared view of what ‘success’ looks like?
• Are you using a common language?
• Are the expectations reasonable? time, scope, budget
• What is your team’s track record with respect to large projects?
• What is the company culture? Revolutionary vs. Evolutionary

Lessons Learned:
Technical Architecture Selection
• What is critical to your organization? What is your special sauce?
• Are you solving a solved problem?
• Do you have a solid understanding of the cost implications of
feeding your pets, cattle, chickens, or flock of birds?
• How will this project change that?
• Is your finance team on board with the change?
• What are your performance requirements and how are you going to
test them?
• How are your security boundaries changing as you move across the
continuum?
• Are you prepared to support what comes out the other side?

Where are we going next?
Continue to enhance the user experience of our marketplaces
Complete the modernization of our seller tools
Say goodbye to a few more pets

Where are you in your journey to Platformless?
• Be Pragmatic and Realistic
• Every organization is on its own journey.
• Leverage the tools and technology that make sense for yours

Remember technology is a tool we employ to
help achieve a business goal; it is not the end
goal itself
@sweiskircher
www.linkedin.com/in/steveweiskircher

References
• Cattle vs. Pets
• https://cloudscaling.com/blog/cloud-computing/the-history-of-pets-vs-cattle/
• https://erp.today/pets-vs-cattle-2-0-an-analogy-and-approach-for-modern-infrastructure
s/
• Cattle vs. Pets vs. Chickens
• https://medium.com/@furrier/have-you-heard-the-tech-enterprise-it-joke-about-pets-vs-
cattle-a065ef4afa1c
• Cattle vs. Pets vs. Flocks of Birds
• https://mhausenblas.medium.com/pets-vs-cattle-vs-flock-of-birds-12f1da3abfc3

WSO2CON 2024 - Lessons from the Field: Legacy Platforms – It's Time to Let Go of Our Pet Servers

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WSO2CON 2024 - Lessons from the Field: Legacy Platforms – It's Time to Let Go of Our Pet Servers