2025-2034 Mainframe Modernization Market Evolution: Emerging Opportunities and Market Disruptions Ahead

What Is the Projected Size of the Mainframe Modernization Market by 2025?
Recent years have witnessed substantial expansion in the market dedicated to mainframe modernization, with projections indicating a climb from a valuation of $15.72 billion in 2024 up to $18.12 billion by 2025, a trajectory translating to a compound annual growth rate (CAGR) of 15.2%. This historical upward trend is fueled by several key factors, chief among them being escalating expenses associated with mainframe upkeep, higher charges for software licenses, the surge in transaction volumes experienced notably by the banking and telecommunications sectors, mounting demands for regulatory adherence, and the ongoing worldwide integration of corporate activities.

How Large Will the Mainframe Modernization Market Grow by 2029?
Anticipating substantial expansion, the sphere of mainframe modernization is projected to experience brisk development in the approaching years, reaching a market valuation of $31.55 billion by 2029, propelled by a compound annual growth rate (CAGR) of 14.9%. This upswing throughout the projection timeframe is fundamentally driven by several factors: intensified efforts towards streamlining expenditures, mounting objectives for enhancing operational robustness, the retirement wave among personnel skilled in legacy systems, escalating compliance demands pertaining to data storage and confidentiality, and a greater emphasis on achieving targets for environmental sustainability and energy efficiency. Key shifts characterizing this forecast period encompass progress in modernization platforms leveraging application programming interfaces, novel developments in automated techniques for code restructuring and translation, the emergence of blueprints and accelerators for migrating to cloud-native environments, ongoing investigation into utilizing artificial intelligence to comprehend legacy codebases, and refinements in machine learning applications for profiling and accurately sizing workloads.

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What Are the Key Factors Driving Growth in the Mainframe Modernization Market?
The expanding utilization of cloud-based offerings is projected to fuel the expansion of the mainframe modernization sector in the future. These solutions represent computing resources, encompassing infrastructure, platforms, and software, that are supplied via the internet as needed and administered by external entities. This migration toward cloud adoption is motivated by the rise of diverse multi-cloud blueprints designed to bolster system robustness and diminish reliance on a single vendor. Mainframe modernization facilitates this trend by allowing existing legacy applications to be re-engineered or equipped with APIs, permitting seamless integration with modern cloud services and deployment across hybrid or multi-cloud environments. As an illustration, data from Flexera, a software firm situated in the US, indicated a modest uptick in multi-cloud deployment in March 2024, climbing from 87% in the preceding year to 89% currently. Consequently, the growing embrace of cloud services acts as a key impetus for the mainframe modernization market.

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What Are the Major Trends Influencing Mainframe Modernization Market Growth?
Key participants within the mainframe modernization sector are concentrating their efforts on introducing novel offerings, notably services for modernization that incorporate artificial intelligence (AI) to expedite the migration process and mitigate potential hazards. These AI-enhanced modernization solutions employ generative-to-agentic artificial intelligence for the automated stages of analyzing, transforming code, conducting tests, and planning the final transition across existing mainframe environments. As an illustration, in the month of June in the year 2025, Kyndryl Inc., an organization situated in the US specializing in IT infrastructure services, unveiled its Mainframe Modernization Services, which utilize the agentic artificial intelligence functionalities provided by Amazon Web Services (AWS Transform for Mainframe); this offering is designed to speed up the movement of applications and data away from the mainframe, mechanize modernization activities to lessen the necessary labor and the incidence of mistakes, and furnish guidance along with execution assistance to lessen the inherent risks associated with migrating to the cloud.

How Is the Mainframe Modernization Market Structured Across Different Segments?
The mainframe modernization market covered in this report is segmented -

1) By Component: Software, Services, Hardware
2) By Deployment Mode: On-Premises, Cloud-Based, Hybrid
3) By Enterprise Size: Small And Medium Enterprises, Large Enterprises
4) By Application: Core Banking, Risk And Compliance, Payments, Customer Management, Fraud Detection, Other Applications
5) By End-User: Banking, Financial Services, And Insurance (BFSI), Healare, Retail, Government, Manufacturing, Information Technology And Telecom, Other End-Users

Sub Segment:
1) By Software: Application Modernization Tools, Code Refactoring Tools, Automated Code Analysis Platforms, Middleware And Integration Software, Application Programming Interface Management Platforms
2) By Services: Consulting Services, Assessment And Roadmapping Services, Application Modernization Services, Replatforming And Rehosting Services, Cloud Migration Services
3) By Hardware: Enterprise Mainframe Systems, Compute Accelerators, Storage Systems, Input Output Subsystems, Networking Equipment

Which Major Firms Are Driving Strategic Developments in the Mainframe Modernization Market?
Major companies operating in the mainframe modernization market are Amazon Web Services Inc.; Google LLC; Microsoft Corporation; 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; Unisys Corporation

Which Regions Present the Most Attractive Opportunities for the Mainframe Modernization Market?
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 the mainframe modernization market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa

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