Mainframe Modernization Market Recent Developments, Latest Growth, Trends, New Opportunities, Key Players and Outlook 2030

Mainframe Modernization Market by Offering (Software, Services), Organization Size (Large Enterprises, SMEs), Vertical (BFSI, Telecom, IT & ITES, Retail & Ecommerce, Government, Others), and Region - Global Forecast to 2030.
The mainframe modernization market [https://www.marketsandmarkets.com/Market-Reports/mainframe-modernization-market-52477.html?utm_campaign=mainframemodernizationmarket&utm_source=abnewswire.com&utm_medium=paidpr]is projected to expand at a compound annual growth rate (CAGR) of 9.7% from USD 8.39 billion in 2025 to USD 13.34 billion by 2030. In order to match their IT infrastructure with the growing need for agility, resilience, and digital innovation, businesses in the banking, financial services, insurance, government, retail, telecommunications, and healthcare sectors are giving mainframe modernization more and more importance. Businesses are using re-hosting, re-platforming, re-architecting, and re-engineering as alternatives to traditional maintenance in an effort to combine legacy core systems with cloud, artificial intelligence, APIs, and containerization.

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The rapid rise of mainframe modernization is reshaping how enterprises address aging core systems, stricter regulatory demands, and shrinking legacy expertise. Large enterprises lead the transition, adopting advanced services and automation-driven software for scalable, compliant digital operations, while SMEs increasingly benefit from more accessible modernization platforms. These shifts create significant opportunities and drive the mainframe modernization market.

As organizations transition to AI-driven and cloud-native architectures, they must navigate a myriad of challenges, including intricate code migrations, escalating cybersecurity threats, regulatory compliance, and ongoing talent shortages. Achieving successful modernization requires a pragmatic approach that combines phased, data-centric strategies with an emphasis on upskilling talent. Partnering with reputable technology providers is essential to achieve the right balance of agility, resilience, and compliance in a continuously evolving digital environment.

Large enterprises segment is expected to hold a higher market share during the forecast period

Large enterprises are expected to command the maximum market share, reflecting their deeper legacy technology investments and the mission-critical nature of their systems across sectors such as banking, insurance, and government. In recent years, these organizations have aggressively accelerated modernization to address the escalating risks and costs of maintaining legacy environments as well as to align with digital transformation, compliance, and data governance imperatives. Recent data indicates that large enterprises accounted for 75% of mainframe modernization spending in 2023, and this dominance is poised to continue as they execute phased migration and hybrid integration strategies to sustain operational uptime and regulatory adherence.

These organizations are also leading to the adoption of application modernization, API enablement, and cloud-native integration, often through partnerships with global service providers, which prove essential for maintaining real-time analytics and service resilience. The complexity and volume of legacy code, alongside the need for continuous transformation, position large enterprises at the forefront of the market. Their modernization initiatives can cost hundreds of millions of dollars, significantly exceeding the scale of the SME segment.

Software offering segment is expected to hold the highest growth rate during the forecast period

Software solutions, including application modernization platforms, automated code conversion, DevOps tools, testing suites, and AI-driven modernization engines, are set to outpace other offerings in growth due to transformative shifts in organizational approach and execution of mainframe modernization. With the rise of generative AI and automation, enterprises are demanding software that automates refactoring legacy COBOL or PL/I code and provides real-time integration with public cloud, microservices, and open APIs. Innovative platforms offer automated code discovery, business logic extraction, and risk scoring, which drastically reduce manual effort and project duration from traditional multi-year timelines down to months for select workloads.

A clear indicator is the rapid adoption of AWS mainframe modernization software, which integrates tools for COBOL-to-Java refactoring and migration orchestration and has seen deployments at large US banks and European insurers processing upwards of 15 million transactions per day. Likewise, IBM's watsonx-powered mainframe tools have been credited with completing complex cross-region modernization projects involving millions of lines of code, underpinning new API ecosystems. Industry news highlights that service providers' revenues from software modernization platforms are growing nearly twice as fast as services tied to manual consulting, reflecting a strategic pivot toward automation and platform-led transformation.

North America is projected to record the largest market during the forecast period

North America's mainframe modernization market is projected to remain the world's largest, underpinned by its concentration of Fortune 500 enterprises, advanced IT infrastructure, and early adoption of digital transformation and regulatory standards. Core industries such as banking, insurance, healthcare, and government rely on mainframes for mission-critical transactions and data processing, and their modernization efforts lead in both scale and pace. Key drivers include complex compliance requirements, the rapid rise in cloud adoption, and the shortage of skilled mainframe professionals, leading firms to outsource modernization to top-tier vendors and leverage automation and hybrid cloud architectures.

The US and Canadian organizations collectively operate some of the highest MIPS mainframes globally, with banking giants and national agencies managing workloads that process billions of records weekly. North American service providers and software vendors are at the forefront of innovation, integrating AI, DevOps, and hybrid cloud to deliver seamless modernization journeys. JPMorgan Chase's high-profile AI-enabled mainframe migration and Canadian public sector cloud transitions highlight this regional leadership. The market's significance is further amplified by the continuous launch of dedicated mainframe modernization centers, robust government and enterprise investment, and a region-wide focus on scalable, secure, and API-driven modernization. This convergence of legacy scale, digital urgency, and technology leadership ensures North America's dominant market position through the coming years.

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Unique Features in the Mainframe Modernization Market

Modernization solutions emphasize moving mainframe workloads to alternative runtimes (cloud VMs, containers, or x86 platforms) while preserving business logic. The capability to re-host with minimal functional change - often using automated translation tools - reduces risk and speeds time-to-value compared with full rewrites.

API enablement and service facade. A common offering is automated wrapping of legacy transactions and data as managed APIs or service endpoints. This lets modern microservices, web apps, and partners call mainframe logic without touching internal code, enabling incremental modernization and easier integration with cloud-native systems.

Automated code transformation & semantic refactoring. Tools now do more than syntactic translation; they perform semantic analysis to refactor COBOL/PL/I to modern languages, identify dead code, and suggest safe design patterns. This reduces manual effort, preserves business rules, and produces code that's maintainable by contemporary developer teams.

DevOps, CI/CD and developer experience modernization. Market solutions introduce pipelines, automated testing, and developer toolchains that treat modernized mainframe apps like any other microservice. Features include source control integration, automated build/test/deploy for converted code, and low-friction IDEs so newer engineers can contribute quickly.

Major Highlights of the Mainframe Modernization Market

Analysts place the global mainframe modernization market in the multi-billion dollar range with high single-digit to double-digit CAGRs over the next 5-10 years, reflecting sustained spending on modernization tools, services and migration projects.

Cloud adoption and hybrid strategies are the primary growth engine. Organizations are moving mainframe workloads to hybrid and public clouds (or integrating them tightly with cloud services) to gain agility, on-demand capacity and lower total cost of ownership - while keeping latency-sensitive or high-security workloads on the platform that makes most sense.

Digital transformation and business-driven modernization. Modernization projects are increasingly driven by business goals - faster time-to-market, real-time analytics, customer experience, and digital services - rather than purely by cost reduction. That shift makes modernization a strategic activity (not just an IT refresh).

System integrators and cloud vendors dominate. Large IT services firms and cloud providers (IBM, AWS, TCS, Capgemini, HCL, Micro Focus, Broadcom, etc.) are prominent because modernization often combines rehosting, refactoring, application rewrites and managed services - a mix that favors vendors with deep legacy and cloud expertise.

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Top Companies in the Mainframe Modernization Market

The major vendors covered in the mainframe modernization market include IBM (US), TCS (India), Capgemini (France), Atos (France), AWS (US), Micro Focus (UK), BMC Software (US), Infosys (India), Wipro (India), HCL Tech (India), DXC Technology (US), Kyndryl (US), Rocket Software (US), Fujitsu (Japan), Cognizant (US), Tech Mahindra (India), Broadcom (US), and TmaxSoft (US). These players have incorporated various organic and inorganic growth strategies, including collaborations, acquisitions, product launches, partnerships, agreements, and expansions to strengthen their international footprint and capture a greater share of the mainframe modernization market. These strategies have allowed the market players to expand across geographies by offering mainframe modernization solutions and services.

IBM

IBM advances mainframe modernization by embedding AI at the core of its new Telum II processor, enabling real-time analytics and automation without added latency. Its portfolio spans re-hosting, re-platforming, re-architecting, refactoring, application modernization, and hybrid cloud integration, all supported by AI tools such as watsonx Code Assistant that simplify code transformation and documentation. IBM addresses operational continuity, security, and regulatory compliance through managed services, helping enterprises bridge legacy and cloud-native architecture effectively.

A recent IBM survey found that 88% of executives consider mainframe modernization essential for their digital transformation strategies, highlighting the importance of AI and hybrid integration. IBM's collaborations with leading banks, governments, and enterprises, such as its work with Delta Air Lines and JPMorgan Chase, demonstrate its ability to deliver scalable, secure, and AI-augmented modernization solutions through incremental, risk-managed approaches, future-proofing essential workloads.

AWS

AWS's mainframe modernization is powered by AWS Transform, an agentic AI platform that accelerates migration by automating large-scale code analysis, refactoring, and application decomposition. Services include automated refactoring (COBOL to Java), re-platforming, scalable modernization testing, and data replication, enhanced by AI-enabled tools such as Amazon Q Developer.

AWS partners with Blu Age, Micro Focus, and others to extend capabilities, enabling real-time data access, DevOps integration, and secure migration pathways. Its managed services ensure operational stability, compliance, and security across regulated verticals, empowering organizations globally to efficiently modernize legacy workloads and unlock new digital business value through automation and cloud scalability.

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