Mainframe Modernization Global Market Report 2025

The mainframe modernization market size has grown rapidly in recent years. It will grow from $15.72 billion in 2024 to $18.12 billion in 2025 at a compound annual growth rate (CAGR) of 15.2%. The growth in the historic period can be linked to rising mainframe maintenance costs, increasing software licensing fees, growing transaction volumes in banking and telecom, rising regulatory compliance requirements, and increasing globalization of enterprise operations.

The mainframe modernization market size is expected to see rapid growth in the next few years. It will grow to $31.55 billion in 2029 at a compound annual growth rate (CAGR) of 14.9%. The growth in the forecast period can be linked to increasing cost optimization initiatives, rising operational resilience targets, growing workforce retirements of legacy specialists, increasing regulatory pressures on data retention and privacy, and rising sustainability and energy efficiency targets. Major trends in the forecast period include advancements in application programming interface led modernization platforms, innovations in automated code refactoring and code translation technologies, developments in cloud native migration accelerators and blueprints, research and development in artificial intelligence assisted legacy code understanding, and advancements in machine learning based workload profiling and sizing.

The increasing adoption of cloud based solutions is expected to drive the growth of the mainframe modernization market going forward. Cloud based solutions are computing resources such as infrastructure, platforms, and software delivered over the internet on demand and managed by third party providers. The shift toward cloud based solutions is due to expanding multi cloud strategies that improve resilience and reduce vendor lock in. Mainframe modernization supports this driver by refactoring and application programming interface enabling legacy workloads to connect with cloud native services and operate in hybrid or multi cloud environments. For instance, in March 2024, according to Flexera, a US based computer software company, multi cloud usage experienced a small increase, rising from 87 percent last year to 89 percent this year. Therefore, the increasing adoption of cloud based solutions is boosting the mainframe modernization market.

Key companies operating in the mainframe modernization market are emphasizing innovative product releases such as artificial intelligence enabled modernization services to accelerate migrations and reduce risk. Artificial intelligence enabled modernization services use generative to agentic artificial intelligence to automate analysis, code conversion, testing, and cutover planning across legacy mainframe systems. For instance, in June 2025, Kyndryl Inc., a US based provider of information technology infrastructure services, introduced Mainframe Modernization Services utilizing Amazon Web Services agentic artificial intelligence capabilities AWS Transform for Mainframe. It speeds up application and data migration away from the mainframe, automates modernization activities to reduce effort and errors, and offers advisory and implementation support to minimize cloud transition risks.

In January 2024, International Business Machines Corporation, a US based global information technology and consulting company, acquired Advanced Computer Software Group Limited for an undisclosed amount. Through this acquisition, IBM seeks to strengthen its mainframe application and data modernization capabilities by merging talent, tools, and expertise to accelerate clients hybrid cloud transformation journeys and broaden IBM Consulting’s modernization services. Advanced Computer Software Group Limited is a UK based company that provides application modernization, cloud services, and industry specific software.

Major players in the mainframe modernization market are Amazon Web Services Inc., Google LLC, Microsoft Corporation, Accenture plc, International Business Machines Corporation, Oracle Corporation, Tata Consultancy Services Limited, Fujitsu Limited, NTT DATA Corporation, Capgemini SE, Cognizant Technology Solutions Corporation, Infosys Limited, Kyndryl Holdings Inc., DXC Technology Company, HCL Technologies Limited (HCLTech), Atos SE, Wipro Limited, Tech Mahindra Limited, LTIMindtree Limited, and Unisys Corporation.

North America was the largest region in the mainframe modernization market in 2024. Asia pacific is expected to be the fastest-growing region in the forecast period. The regions covered in mainframe modernization report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East and Africa. The countries covered in the mainframe modernization 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 mainframe modernization market research report is one of a series of new reports that provides mainframe modernization market statistics, including mainframe modernization industry global market size, regional shares, competitors with a mainframe modernization market share, detailed mainframe modernization market segments, market trends and opportunities, and any further data you may need to thrive in the mainframe modernization industry. This mainframe modernization 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.

Mainframe modernization is the process of updating and transforming legacy mainframe systems to more modern, agile, and cost effective technologies. It involves migrating applications, data, and workloads from traditional mainframes to cloud based, distributed, or hybrid environments while preserving critical business functions. This modernization enhances scalability, performance, security, and integration with contemporary digital platforms.

The primary components of mainframe modernization are software, services, and hardware. Software refers to the tools and platforms used to modernize, transform, or integrate mainframe applications and data into modern cloud or hybrid environments. These are deployed on premises, cloud based, or hybrid, and are utilized by small and medium enterprises and large enterprises across applications such as core banking, risk and compliance, payments, customer management, and fraud detection, serving key end users including banking, financial services and insurance, healthcare, retail, government, manufacturing, information technology and telecommunications and others.

The mainframe modernization market consists of revenues earned by entities by providing services such as rehosting, replatforming, refactoring, code transformation, testing and quality assurance, migration and assessment, consulting and advisory, maintenance and support. 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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