Mainframe Modernization Services Market Growth, Size, Share, Trends, Key Players Analysis, and Forecast till 2031

The mainframe modernization services market size is expected to reach US$ 86.14 billion by 2031 from US$ 33.55 billion in 2023. The market is estimated to record a CAGR of 12.5% from 2023 to 2031. An increase in investment toward the transformation of IT infrastructure and integration with AI and machine learning is likely to remain a key market trend.

Mainframe Modernization Services Market Analysis

Key factors driving the growth of the mainframe modernization services market include the rise in the adoption of mainframe modernization services in various sectors, digital transformation across the globe, and the growing adoption of cloud computing. However, challenges faced by IT companies in mainframe modernization are the key restraints in the market. Nevertheless, the growth of the data analytics industry across the globe is expected to create opportunities for the key players operating in the mainframe modernization services market. Furthermore, an increase in investment toward the transformation of IT infrastructure to provide efficient operation and services to consumers is expected to be the key future trend in the mainframe modernization services market from 2023 to 2031.

Mainframe Modernization Services Market Overview

The technology sector saw significant changes in 2023, with AI dominating headlines throughout the year. While new and emerging technologies grabbed headlines throughout the year, one venerable technology, the mainframe, probably had its busiest year in decades. The mainframe sector, often described as stable and slow-moving, saw significant activity last year. Mainframe modernization, historically a niche market that was dominated by IBM and a few software and service providers, has long been synonymous with incremental, evolutionary progress. However, in recent years, there has been a paradigm shift. The concept of modernization has expanded as companies explore different approaches to deliver robust enterprise-level IT services, from interface and platform updates to data management and language innovation. This trend toward more comprehensive modernization strategies has recently gained momentum. Over the past year, both new and established players have consolidated their presence in this market, indicating the potential of this space for significant returns. The movement among providers represents a decisive and positive change and promotes healthy debate within the industry.

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Mainframe Modernization Services Market: Strategic Insights

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Mainframe Modernization Services Market Drivers and Opportunities

Rise in Adoption of Mainframe Modernization Services in Various Sectors to Favor Market

The IT and telecom sector experienced significant growth with the integration of emerging technologies such as the Internet of Things (IoT), automation, machine learning, and artificial intelligence (AI). Technologically advanced companies are prioritizing mainframe modernization services for the efficient operation of the systems. The mainframe modernization services help in migrating the mainframe applications to the cloud applications using API, microservices, and DevOps. Mainframe systems combine high-performance hardware, software tools, and large individual programmed applications that need modernization services for efficient operation.

The rising adoption of advanced technologies in banks, hospitals, government agencies, transportation, defense, and others is expected to accelerate the demand for IT infrastructure transformation and mainframe modernization services. For example, according to the Kyndryl survey conducted in September 2024, among 500 business and IT leaders, 86% of the respondents were engaged in adopting AI to accelerate the mainframe modernization adoption initiatives. According to a survey of 1,000 IT decision makers (ITDMs), backend developers, and software architects in the US, the UK, and other English-speaking countries in Asia Pacific region (APAC) by Red Hat, 95% of respondents believe that application modernization is essential for their organization’s success. 75% of companies have already completed at least small-scale modernization projects, and 18% have progressed all the way to continuous modernization. Moreover, 92% of enterprises were actively working on at least one app modernization project. Thus, organizations were increasingly turning to mainframe modernization services, thereby propelling the market growth.

Growing Adoption of Data Analytics

Government agencies use the mainframe systems for activities such as data processing and resource planning. It enables governments to implement best-in-class IT processes and smarter decision-making. In addition, digital transformation places significant demands on existing applications and data, requiring mainframe modernization and integration into an organization's heterogeneous technology landscape, including cloud and mainframe. Data analytics has become a powerful tool for businesses to benefit from valuable insights and make informed decisions due to the massive amount of data generated.

Data analytics is experiencing a revolution in tools, technologies, applications, and adoption. The industry is evolving rapidly, and companies are largely investing in turning data and analytics into competitive advantage. Modernized mainframes also allow for a smoother and faster data flow within various systems, enabling advanced data analytics. Moreover, modernization supports secure data transfer between institutions, aligning with emerging regulatory requirements and open finance. According to most big data experts, the amount of data generated is expected to increase dramatically during the forecast period. For instance, the report from Seagate's Data Age 2025 estimates that the amount of data generated worldwide is expected to reach 175 zettabytes by 2025. The massive increase in the number of people working from home or remote locations, studying, and spending time on the internet is driving data expansion. Such a surge in data generation and growth in data analytics are expected to create opportunities for mainframe modernization services during the forecast period.

Mainframe Modernization Services Market Report Segmentation Analysis

Key segments that contributed to the derivation of the mainframe modernization services market analysis are services, enterprise size, and end-use industry.

• Based on services, the mainframe modernization services market is segmented into application modernization, cloud migration, and data modernization. The application modernization segment dominated the market in 2023.
• By enterprise size, the market is bifurcated into SMEs and large enterprises. The large enterprises segment dominated the market in 2023.
• In terms of end-use industry, the market is segmented into IT and telecom, BFSI, retail, healthcare, government, media and entertainment, manufacturing, education, and others. The IT and telecom segment held the largest market share in 2023.

Mainframe Modernization Services Market Share Analysis by Geography

• The mainframe modernization services market is segmented into five major regions: North America, Europe, Asia Pacific (APAC), the Middle East & Africa (MEA), and South & Central America. North America dominated the market in 2023, followed by Europe and APAC.
• North America is witnessing tremendous growth in the market, owing to the presence of various market players who are continuously working on the advancement of mainframe modernization services. In January 2024, Hitachi Vantara, along with Cisco, introduced an innovative suite of hybrid cloud services specifically designed to address ongoing data management challenges faced by various enterprises. This new Hitachi EverFlex with Cisco Powered Hybrid Cloud integrates automation solutions and predictive analytics to provide organizations with advanced infrastructure management, operational effectiveness, and cost efficiency. Thus, such product innovations by the market players in the region are fueling the growth of the mainframe modernization services market in the region.

Mainframe Modernization Services Market Regional Insights

The regional trends and factors influencing the Mainframe Modernization Services Market throughout the forecast period have been thoroughly explained by the analysts at Insight Partners. This section also discusses Mainframe Modernization Services Market segments and geography across North America, Europe, Asia Pacific, Middle East and Africa, and South and Central America.

Mainframe Modernization Services Market Report Scope

Mainframe Modernization Services Market Players Density: Understanding Its Impact on Business Dynamics

The Mainframe Modernization Services Market market is growing rapidly, driven by increasing end-user demand due to factors such as evolving consumer preferences, technological advancements, and greater awareness of the product's benefits. As demand rises, businesses are expanding their offerings, innovating to meet consumer needs, and capitalizing on emerging trends, which further fuels market growth.

Market players density refers to the distribution of firms or companies operating within a particular market or industry. It indicates how many competitors (market players) are present in a given market space relative to its size or total market value.

Major Companies operating in the Mainframe Modernization Services Market are:

1. Accenture
2. Capgemini
3. Cognizant
4. Amazon Web Services, Inc.
5. Infosys Limited
6. Fujitsu

Disclaimer: The companies listed above are not ranked in any particular order.

Mainframe Modernization Services Market News and Recent Developments

The mainframe modernization services market is evaluated by gathering qualitative and quantitative data post primary and secondary research, which includes important corporate publications, association data, and databases. A few of the developments in the mainframe modernization services market are listed below:

• Accenture Federal Services had been awarded the US Army’s Enterprise Application Modernization and Migration (EAMM) contract with a potential value of US$ 127 million. Accenture Federal Services will use its cloud migration and modernization approach to perform large-scale application assessments, migrations, and modernizations to the cloud.

(Source: Accenture, Press Release, May 2024)

• Fujitsu announced the Japan market launch of its successful modernization automation service “Fujitsu PROGRESSION,” building on a proven track of over 50 global use cases in which it migrated legacy systems to the Fujitsu mainframe "GS21 Series." “Fujitsu PROGRESSION” is a service that automatically converts script written in COBOL into Java or C# while preserving the functionality of applications built on mainframes. It delivers modernization services for end-to-end support, from drafting migration plans based on customer systems audits to asset migration through to testing and operation.

(Source: Fujitsu, Press Release, May 2024)

Mainframe Modernization Services Market Report Coverage and Deliverables

The "Mainframe Modernization Services Market Size and Forecast (2021–2031)" provides a detailed analysis of the market covering the areas mentioned below:

• Mainframe modernization services market size and forecast at global, regional, and country levels for all the key market segments covered under the scope
• Mainframe modernization services market trends as well as market dynamics such as drivers, restraints, and key opportunities
• Detailed PEST and SWOT analysis
• Mainframe modernization services market analysis covering key market trends, global and regional framework, major players, regulations, and recent market developments
• Industry landscape and competition analysis covering market concentration, heat map analysis, prominent players, and recent developments for the mainframe modernization services market
• Detailed company profiles