PUBLISHER: The Business Research Company | PRODUCT CODE: 1970053
PUBLISHER: The Business Research Company | PRODUCT CODE: 1970053
Application modernization involves the process of updating older software to align with newer computing methodologies, aiming to enhance agility, foster innovation, reduce costs and risks, and ultimately streamline business operations for growth. Application modernization services are instrumental in revitalizing older software by incorporating new computing approaches, including the adoption of newer languages, frameworks, and infrastructure platforms.
The primary types of application modernization services encompass COBOL, ADA, PL/1, RPG, assembler, power builder, and other variations. COBOL, for example, is utilized for migrating COBOL applications either in mass or through staged processes to the preferred programming language and platform. COBOL, which stands for Common Business-Oriented Language, is a high-level programming language designed for business computer programs, commonly used in industries such as finance and human resources. Various cloud development modes, including private cloud, public cloud, and hybrid cloud, play a significant role in the application modernization landscape. Different types of applications targeted for modernization include post-modernization, application portfolio assignment, UI modernization, cloud application mitigation, application integration, and application re-platforming. The application modernization services cater to diverse industry verticals such as BFSI, healthcare, life sciences, telecommunications, IT and ITeS, retail and consumer goods, government and public sector, energy and utilities, manufacturing, and other sectors.
Tariffs are impacting the application modernization services market by increasing costs associated with imported servers, networking equipment, development tools, and cloud infrastructure components used during modernization projects. Enterprises in North America and Europe are most affected due to reliance on globally sourced hardware and licensed software platforms, while Asia-Pacific faces cost pressures in offshore service delivery models. These tariffs are increasing overall project budgets and extending modernization timelines. However, they are also accelerating the shift toward cloud-based platforms, open-source technologies, and regionally hosted infrastructure, supporting long-term service resilience and localization.
The application modernization services market research report is one of a series of new reports from The Business Research Company that provides application modernization services market statistics, including application modernization services industry global market size, regional shares, competitors with a application modernization services market share, detailed application modernization services market segments, market trends and opportunities, and any further data you may need to thrive in the application modernization services industry. This application modernization services market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenario of the industry.
The application modernization services market size has grown exponentially in recent years. It will grow from $24.39 billion in 2025 to $29.32 billion in 2026 at a compound annual growth rate (CAGR) of 20.2%. The growth in the historic period can be attributed to increasing legacy system complexity, rising enterprise it modernization initiatives, expansion of enterprise software ecosystems, growing demand for operational agility, increasing reliance on mission-critical applications.
The application modernization services market size is expected to see exponential growth in the next few years. It will grow to $60.95 billion in 2030 at a compound annual growth rate (CAGR) of 20.1%. The growth in the forecast period can be attributed to increasing cloud migration investments, rising adoption of containerization technologies, expansion of hybrid cloud strategies, growing emphasis on application security modernization, increasing demand for continuous application innovation. Major trends in the forecast period include increasing adoption of cloud-native application architectures, rising demand for legacy application reengineering, growing use of microservices-based modernization, expansion of devops-driven modernization programs, enhanced focus on application scalability and resilience.
The growing adoption of cloud computing is expected to significantly boost the application modernization services market in the future. Cloud computing refers to the provision of various computing services-including servers, storage, databases, networking, software, and analytics-over the internet. It offers a scalable and flexible infrastructure, enabling businesses to adjust their applications according to demand seamlessly. Application modernization services help organizations modify their existing applications to take full advantage of the scalability and flexibility provided by cloud platforms. For example, in July 2024, CloudZero, a U.S.-based cloud cost intelligence platform, reported that over 90% of organizations are utilizing cloud services, with approximately 67% operating in a public cloud environment and 45% using private clouds. Furthermore, 48% of organizations plan to migrate at least half of their applications to the cloud within the next year, indicating a strong trend toward cloud adoption. Therefore, the increasing utilization of cloud computing is driving the growth of the application modernization services market.
Major players within the application modernization services market are intensifying their focus on product development, particularly in the realm of AI-powered assistants, to fortify their market standing. AI-powered assistants, specifically enterprise coding assistants, are software tools leveraging artificial intelligence to aid developers in writing code swiftly and accurately. For instance, in October 2023, International Business Machines Corporation (IBM), a renowned US-based multinational technology and consulting company, unveiled Watsonx Code Assistant. This cutting-edge generative AI-powered assistant targets enterprise developers and IT operators, enhancing their coding efficiency and precision. The tool's innovative approach employs natural language prompts to streamline coding processes, catering to two significant enterprise use cases. Firstly, it supports IT automation through Watsonx Code Assistant for Red Hat Ansible Lightspeed, enabling tasks like network configuration and code deployment. Secondly, it addresses mainframe application modernization with Watsonx Code Assistant for Z, facilitating the translation of COBOL to Java. IBM's Watsonx Code Assistant aims to bolster coding productivity by harnessing AI's capabilities to comprehend and respond to natural language queries, simplifying intricate coding tasks for enterprise users.
In May 2024, Rocket Software, a US-based software firm, acquired OpenText's application modernization and connectivity (AMC) business for $2.275 billion. This acquisition boosts Rocket Software's capabilities in mainframe modernization, equipping the company with industry-leading tools for updating legacy systems and establishing it as a key player in the transition to hybrid cloud environments. OpenText, also a US-based software company, provides various strategies for application modernization, including platform upgrades, enhancements in user experience, and operational optimizations.
Major companies operating in the application modernization services market are Accenture PLC; Aspire Systems Inc.; Asysco Inc.; Bell Integrator Inc.; Blu Age Corp.; Capgemini SE; Cognizant Technology Solutions Corporation; DXC Technology Company; EPAM Systems Inc.; HCL Technologies Limited; Hexaware Technologies Limited; IBM Corporation; Infosys Limited; Micro Focus International PLC; Modern Systems Inc.; Tata Consultancy Services Limited; Tech Mahindra Limited; The Software Revolution Inc.; Wipro Limited; Atos Information Technology Incorporated; Deloitte Touche Tohmatsu LLC; Cuelogic Technologies Pvt. Ltd.; Mindtree Consulting Private Limited; Larsen & Toubro Infotech Ltd.; Virtusa Consulting Services Private Limited; Trianz Holdings Private Limited; Persistent Systems and Solutions Limited; Sonata Software Ltd.
North America was the largest region in the application modernization services market in 2025. The regions covered in the application modernization services market report are Asia-Pacific, South East Asia, Western Europe, Eastern Europe, North America, South America, Middle East, Africa.
The countries covered in the application modernization services market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Taiwan, Russia, South Korea, UK, USA, Canada, Italy, Spain
The application modernization services market includes revenues earned by entities by providing rehosting, rearchitecting and recoding application modernization services. The market value includes the value of related goods sold by the service provider or included within the service offering. Only goods and services traded between entities or sold to end consumers are included.
The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD unless otherwise specified).
The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.
Application Modernization Services Market Global Report 2026 from The Business Research Company provides strategists, marketers and senior management with the critical information they need to assess the market.
This report focuses application modernization services market which is experiencing strong growth. The report gives a guide to the trends which will be shaping the market over the next ten years and beyond.
Where is the largest and fastest growing market for application modernization services ? How does the market relate to the overall economy, demography and other similar markets? What forces will shape the market going forward, including technological disruption, regulatory shifts, and changing consumer preferences? The application modernization services market global report from the Business Research Company answers all these questions and many more.
The report covers market characteristics, size and growth, segmentation, regional and country breakdowns, total addressable market (TAM), market attractiveness score (MAS), competitive landscape, market shares, company scoring matrix, trends and strategies for this market. It traces the market's historic and forecast market growth by geography.
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