PUBLISHER: MarketsandMarkets | PRODUCT CODE: 1859661
PUBLISHER: MarketsandMarkets | PRODUCT CODE: 1859661
The Application modernization services market was estimated to be USD 22.67 billion in 2025 and is expected to reach USD 51.45 billion by 2031 at a compound annual growth rate (CAGR) of 14.6%.
| Scope of the Report | |
|---|---|
| Years Considered for the Study | 2018-2031 |
| Base Year | 2024 |
| Forecast Period | 2025-2031 |
| Units Considered | Value (USD) Million/Billion |
| Segments | By Service Type, Application Type, Vertical, and Region |
| Regions covered | North America, Europe, Asia Pacific, Middle East & Africa, and Latin America |
There are a few factors owing to which the application modernization services market is experiencing growth. In the era of rapid technological advancements, a business cannot afford to overlook the need to update its outdated applications in order to stay competitive and improve its efficiency. Often, when a business has grown sufficiently in scope, coverage, and network, the legacy systems in place can hardly meet current business demands because they are constrained by scale, flexibility, and integration with new-age technologies.

The increased use of cloud technology is another key driver, with many organizations aiming to utilize cloud providers due to the scalability and cost-effectiveness of their operations. As a result of this digital evolution, companies have been compelled to undergo application transformation, as it is essential that such applications integrate seamlessly with advanced technologies such as Artificial Intelligence, machine learning, and the Internet of Things.
Moreover, with the increasing focus on securing data and compliance, organizations are also actively migrating their deployments to newer versions of applications developed to meet the changing needs of regulations aimed at addressing cybersecurity issues. Additionally, better performance of applications and improving user experience with such applications are other reasons for enhanced modernization trends, since every business strives to improve how its customers interact with the business digitally. The need to reduce operating costs while increasing agility and speed to market is also a major factor, as application modernization enables the rollout of new features and services in a shorter period. Overall, these are the reasons for the high demand for services related to application modernization, as organizations seek to redesign their technological frameworks in response to their strategic objectives and operational effectiveness.
"The healthcare & life sciences vertical is expected to have the second-largest market size during the forecast period."
The healthcare sector is expected to capture a significant share of the application modernization services market, second only to the telecom industry, during the forecast period. This growth is driven by the rising demand for advanced digital solutions. The sector is undergoing a major transformation fueled by the increasing adoption of electronic health records, telemedicine, and AI-driven diagnostics. To support these advancements, healthcare providers require more efficient IT systems that enhance operational efficiency, improve patient care, and ensure compliance with regulatory standards. Additionally, the growing demand for cloud-based solutions that offer both security and scalability, along with seamless integration of new technologies into existing systems, continues to accelerate growth in this space.
"The cloud-native applications segment will witness the highest growth rate during the forecast period."
In the application modernization services, owing to their vast potential for growth in aspects such as scalability, flexibility, and efficiency over and above the others, cloud-native applications are projected to have a greater increase within the forecasted period. On the other hand, while legacy applications offer services as a single unit and often rely on underlying physical structures, such as servers and data centers, cloud-native applications are cloud-centric and are constructed using enhanced architectural designs, including those of microservices, containerized booting, and scheduling management systems. This allows players in the industry to adapt to changes in the business environment, increase resources when needed, and minimize unnecessary operational costs. Additionally, the increased use of cloud-based solutions and the maturation of cloud technologies are driving the need for cloud-native applications, as such solutions have overcome market challenges to deliver faster, better results, and an optimized user experience. The most important technological trend has also been the continuous and sustained drive towards digitalizing businesses' processes for improved efficiency, which therefore means the development of able and responsive system solutions to the modern need for cloud based solutions will make transition to the more use of cloud-native applications faster hence this explains the expected higher growth rate of such applications in the application modernization services market.
"Asia Pacific to register the highest growth rate during the forecast period."
The application modernization services market in the forecast period is expected to grow at a higher pace in the Asia-Pacific region, driven by several underlying factors. One of the reasons is the digital transformation of the region, which has been facilitated by the growing adoption of cloud computing and other emerging technologies, as well as the pursuit of efficiency in business operations. There is an increase in IT spending and digital activities in countries like China and India, creating a need for services to modernize aging management systems and incorporate new technologies. The growth of the sector is also enhanced by the efforts of global technology providers and the influx of local enterprises, which are enhancing competition. The increasing affluence of the population, along with the trend towards a more technologically inclined population, is another major factor driving the need for sophisticated and high-capacity application modernization services within the region.
Breakdown of primaries
The major players in the Application modernization services market include Oracle (US), IBM (US), Microsoft (US), AWS (US), HCL Technologies (India), Accenture (Ireland), ATOS (France), Capgemini (France), Cognizant (US), TCS (India), Aspire Systems (India), NTT Data Group Corporation (Japan), Infosys (India), Dell Technologies (US), Innova Solutions (US), EPAM Systems (US), DXC Technology (US), MongoDB (US), LTIMindtree (India), Wipro (India), Rocket Software (US), Fujitsu (Japan), Hexaware Technologies (India), Virtusa (US), Softura (US), CloudHedge (US), D3V Technology (US), Bayshore Intelligence (US), Opinov8 (UK), Icreon (US), Symphony Solutions (Netherlands), Cleveroad (Ukraine), Soft Suave (India), TechAhead (US), Geomotiv (US), PalmDigitalz (India), AveriSource (US), ScienceSoft (US), Simform (US), Utthunga (India), Rishabh Software (India), and Veritis (US). These players have adopted various growth strategies, including partnerships, agreements, collaborations, product launches, enhancements, and acquisitions, to expand their footprint in the application modernization services market.
Research Coverage
The market study covers the size of the application modernization services market across various segments. It aims to estimate the market size and growth potential across different segments, including service types, application types, verticals, and regions. The service type includes application portfolio assessment, cloud application migration, application re-platforming, application integration, UI/UX modernization, and post-modernization. Further, the application types include legacy applications, cloud-hosted applications, and cloud-native applications. The verticals include BFSI, healthcare & life sciences, telecom, IT & ITeS, retail & e-commerce, government, energy & utilities, transportation & logistics, media & entertainment, and manufacturing. The regional analysis of the Application modernization services market covers North America, Europe, Asia Pacific, the Middle East & Africa, and Latin America. The study includes an in-depth competitive analysis of the leading market players, their company profiles, key observations related to product and business offerings, recent developments, and market strategies.
Key Benefits of Buying the Report
The report will help market leaders/new entrants with information on the closest approximations of the global Application Modernization Services market's revenue numbers and subsegments. This report will help stakeholders understand the competitive landscape and gain valuable insights to better position their businesses and plan suitable go-to-market strategies. Moreover, the report will provide stakeholders with insights into the market's pulse, as well as information on key market drivers, restraints, challenges, and opportunities.
1. Analysis of key drivers (rising digital transformation initiatives, demand for flexibility and scalability through cloud computing, rapid technological advancements), restraints (high costs and complexity, legacy system dependencies), opportunities (emerging markets and SMEs, evolution of open standards for software development), and challenges (vendor lock-in and platform dependencies, managing technical debt) influencing the growth of the application modernization services market.
2. Product Development/Innovation: Detailed insights on upcoming technologies, research & development activities, and product & service launches in the application modernization services market.
3. Market Development: Comprehensive information about lucrative markets - the report analyses the application modernization services market across various regions.
4. Market Diversification: Exhaustive information about new products & services, untapped geographies, recent developments, and investments in the application modernization services market.
5. Competitive Assessment: In-depth assessment of market shares, growth strategies and service offerings of leading players such as Oracle (US), IBM (US), Microsoft (US), AWS (US), HCL Technologies (India), Accenture (Ireland), ATOS SE (France), Capgemini (France), Cognizant (US), Tata Consultancy Services (India), Aspire Systems (India), NTT Data Group Corporation (Japan), Infosys (India), Dell Technologies (US), Innova Solutions (US), EPAM Systems (US), DXC Technology (US), MongoDB (US), LTIMindtree (India), Wipro (India), Rocket Software (US), Fujitsu (Japan), Hexaware Technologies (India), Virtusa (US), Softura (US), CloudHedge (US), D3V Technology (US), Bayshore Intelligence (US), Opinov8 (UK), Icreon (US), Symphony Solutions (Netherlands), Cleveroad (Ukraine), Soft Suave (India), TechAhead (US), Geomotiv (US), PalmDigitalz (India), AveriSource (US), ScienceSoft (US), Simform (US), Utthunga (India), Rishabh Software (India), and Veritis (US).