Legacy Software Modernization Global Market Report 2025

The legacy software modernization market size has grown rapidly in recent years. It will grow from $13.02 billion in 2024 to $15.14 billion in 2025 at a compound annual growth rate (CAGR) of 16.2%. The growth in the historic period can be linked to increasing reliance on outdated systems, growing need for operational efficiency, rising maintenance costs of legacy software, increasing adoption of digital transformation initiatives, and growing demand for software scalability.

The legacy software modernization service market size is expected to see rapid growth in the next few years. It will grow to $27.3 billion in 2029 at a compound annual growth rate (CAGR) of 15.9%. The growth in the forecast period can be linked to increasing investment in cloud technologies, growing focus on cybersecurity modernization, expansion of hybrid and multi cloud environments, growing demand for cost efficient modernization solutions, and rising emphasis on improving user experience. Major trends in the forecast period include advancements in cloud native technologies, innovations in application modernization platforms, research and development in automation frameworks, emergence of low code and no code modernization solutions, and technological progress in legacy to cloud migration tools.

The growing adoption of cloud-based platforms is expected to drive the growth of the legacy software modernization service market in the near future. Cloud-based platforms provide computing resources, storage, and applications over the internet, eliminating the need for local servers or devices. The adoption of these platforms is increasing due to their scalability, which enables flexible resource management, and their cost efficiency. Legacy software modernization services facilitate cloud adoption by transforming outdated systems into cloud-ready, scalable architectures that integrate seamlessly with modern cloud platforms, improving performance, flexibility, and business agility. For example, in January 2025, AAG IT, a UK-based IT services company, reported that an estimated 63% of small and medium-sized business (SMB) workloads and 62% of SMB data were expected to be hosted in public clouds by 2023, compared to 57% of workloads and 56% of data in 2022. This rise in cloud adoption is driving the growth of the legacy software modernization service market.

Leading companies in the legacy software modernization services market are focusing on developing AI-driven modernization applications to enable seamless migration of legacy systems to cloud-native architectures, improve operational efficiency, enhance scalability, and support digital transformation. AI-driven modernization apps use artificial intelligence to analyze, refactor, and transform legacy systems, facilitating faster migration to modern platforms, improving efficiency, and ensuring seamless integration with cloud and digital technologies. For instance, in October 2025, Red Hat, a US-based software company, introduced AI-powered tools designed to accelerate application modernization, particularly for enterprises with legacy codebases. These tools integrate with Red Hat’s Migration Toolkit for Applications (MTA) to offer automated code analysis, refactoring suggestions, and guidance for migrating applications to cloud-native environments. This reduces manual effort, improves workflow efficiency, and speeds up the modernization process while ensuring compatibility with modern platforms and architectures.

In May 2024, Rocket Software, a US-based provider of enterprise software solutions, acquired OpenText’s Application Modernization and Connectivity (AMC) business for $2.275 billion. This acquisition strengthens Rocket Software’s legacy software modernization capabilities, expands its offerings in mainframe and legacy application modernization, and enhances its support for enterprise clients worldwide. OpenText’s AMC business specializes in legacy software modernization services and is based in the US.

Major players in the legacy software modernization market are Accenture plc, HCL Technologies Limited, ValueLabs LLP, Damco Solutions, ScienceSoft USA Corporation, Rishabh Software Pvt. Ltd., OpenXcell Technolabs Pvt. Ltd., ITRex Group, Merixstudio Sp. z o.o., instinctools GmbH, Langate Inc., Integrio Systems Inc., Euristiq Sp. z o.o., Syberry Corporation, Nexus Software Systems LLC, Mangosoft Ltd., Oxagile LLC, DICEUS LLC, Praxent Inc., 8base Inc.

North America was the largest region in the legacy software modernization service market in 2024. Asia-Pacific is expected to be the fastest-growing region in the forecast period. The regions covered in legacy software modernization service report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East and Africa. The countries covered in the legacy software modernization service market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

Note that the outlook for this market is being affected by rapid changes in trade relations and tariffs globally. The report will be updated prior to delivery to reflect the latest status, including revised forecasts and quantified impact analysis. The report’s Recommendations and Conclusions sections will be updated to give strategies for entities dealing with the fast-moving international environment.

The rapid escalation of U.S. tariffs and the resulting trade tensions in spring 2025 are significantly impacting the information technology sector, particularly in hardware manufacturing, data infrastructure, and software deployment. Higher duties on imported semiconductors, circuit boards, and networking equipment have raised production and operational costs for tech firms, cloud service providers, and data centers. Companies relying on globally sourced components for laptops, servers, and consumer electronics are facing longer lead times and increased pricing pressures. In parallel, tariffs on specialized software tools and retaliatory measures from key international markets have disrupted global IT supply chains and reduced overseas demand for U.S.-developed technologies. To navigate these challenges, the sector is accelerating investments in domestic chip fabrication, diversifying supplier bases, and adopting AI-driven automation to enhance operational resilience and cost efficiency.

The legacy software modernization services market research report is one of a series of new reports that provides legacy software modernization services market statistics, including legacy software modernization services industry global market size, regional shares, competitors with a legacy software modernization services market share, detailed legacy software modernization services market segments, market trends and opportunities, and any further data you may need to thrive in the legacy software modernization services industry. This legacy software 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.

Legacy software modernization service refers to the process of updating or transforming outdated software systems to meet current technological standards and business needs. It involves reengineering, replatforming, or migrating existing applications to improve performance, scalability, and security. This service helps organizations reduce maintenance costs, enhance efficiency, and ensure compatibility with modern digital infrastructures.

The primary types of legacy software modernization services are application modernization, cloud migration, code refactoring, replatforming, database modernization, user interface modernization, and other related service types. Application modernization refers to the structured reengineering of legacy applications to enhance scalability, performance, security, and maintainability by updating architectures, decoupling monoliths, adopting modular patterns, introducing automated testing, and aligning functionality with current business requirements while minimizing disruption. The deployment modes include on premises, cloud based, and hybrid models, serving large enterprises and small and medium enterprises across banking, financial services and insurance, healthcare, government, manufacturing, retail, telecommunications, transportation and logistics, and other industry verticals.

The legacy software modernization service market includes revenues earned by entities by providing services such as application re-engineering, platform replatforming, system integration, legacy system assessment, database modernization, user interface modernization and application maintenance. 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.

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