USD 15.21 billion
Application Modernization Services Market Size, Share, Growth Analysis, By Service Type(Application Portfolio Assessment, Cloud Application Migration, Application Re-Platforming, Application Integration), By Deployment Mode(Public Cloud, Private Cloud), By Organization Size(Small and Medium-Sized Enterprises, Large Enterprises), By Vertical(BFSI, Healthcare and Life Sciences, Telecommunications, IT and ITEs), By Region - Industry Forecast 2025-2032
Report ID:
SQMIG45B2045 |
Region:
Global |
Published Date: October, 2024
Pages:
197
|Tables:
95
|Figures:
76
Application Modernization Services Market Insights
Application Modernization Services Market size was valued at USD 17.9 Billion in 2023 and is poised to grow from USD 20.9 Billion in 2024 to USD 72.4 Billion by 2032, growing at a CAGR of 0.168 during the forecast period (2025-2032).
Application modernization is updating, renovating, or converting existing software applications to meet current business requirements, technological trends, and the user expectations. This is frequently done to increase functionality and performance and keep applications relevant in changing technologies. Application modernization services cover various operations to improve and renew software systems.
Additionlly, there is an increased demand for analytics and related technology to enable faster service recognition and delivery. Demand for speedier analytics is expected to drive the growth of the worldwide application modernization services market as cloud computing becomes more widely used in industrial and enterprise applications. Small businesses and organizations rely on legacy applications because they are cost-effective, creating a massive chance for the market to grow shortly.
Regulations directly governing application modernization services are not typically found at the federal level, as application modernization primarily focuses on technological improvements rather than legal compliance. By modernizing analytics applications, organizations can gain a competitive advantage, optimize operations, and identify new revenue opportunities. Application modernization services encompass strategies for integrating advanced analytics, machine learning, and predictive modeling capabilities into applications, enabling the organizations to forecast trends and make data-driven decisions.
US Application Modernization Services Market is poised to grow at sustainable CAGR for the next forecast year.
Market snapshot - 2024-2031
Global Market Size
Largest Segment
Hybrid Cloud
Fastest Growth
Private Cloud
Growth Rate
16.70% CAGR
Global Application Modernization Services Market ($ Bn)
Country Share for North America Region (%)
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Application Modernization Services Market Segmental Analysis
Global Application Modernization Services Market is segmented by Service Type, Deployment Mode, Organization Size, Vertical, and region. Based on Service Type, the market is segmented into Application Portfolio Assessment, Cloud Application Migration, Application Re-Platforming, Application Integration, UI Modernization, and Post Modernization. Based on Deployment Mode, the market is segmented into Public Cloud, and Private Cloud. Based on Organization Size, the market is segmented into Small and Medium-Sized Enterprises, and Large Enterprises. Based on end user, the market is segmented into Banking, Financial Services, and Insurance, Healthcare and Life Sciences, Telecommunications, IT and ITEs, Retail and Consumer Goods, Government and Public Sector, Energy and Utilities, Manufacturing, and Other Verticals. Based on region, the market is segmented into North America, Europe, Asia Pacific, Latin America and Middle East & and Africa.
Application Modernization Services Market Analysis by Service Type
As per application modernization services market outlook, the application re-platforming segment held the largest revenue share of 22.9% in 2023 and is expected to continue to dominate the industry over the forecast period. The shift towards hybrid and multi-cloud environments drives the adoption of application re-platforming services. In November 2023, NTT DATA partnered with Amazon Web Services (AWS) to integrate its UniKix Mainframe Replatforming software into the AWS Mainframe Modernization service. This partnership enables NTT DATA to offer cost-effective cloud migration solutions to their clients. Re-platforming services enable organizations to migrate applications seamlessly between different cloud environments or deploy applications across multiple clouds while maintaining interoperability, portability, and consistency.
Cloud application migration is expected to witness the fastest CAGR over the forecast period. The need for DevOps and continuous delivery practices drives the adoption of the cloud application migration segment. Cloud platforms enable organizations to adopt agile development methodologies, automate software delivery pipelines, and accelerate time-to-market for new features and services. Application modernization services providers offer expertise in implementing DevOps frameworks, CI/CD pipelines, and infrastructure as code (IaC) practices, enabling organizations to automate application deployment, scaling and provisioning in cloud environments.
Application Modernization Services Market Analysis by Deployment Mode
As per application modernization services market analysis, hybrid cloud segment is dominating. The hybrid cloud segment held the largest revenue share in 2023. Hybrid cloud deployment is cost-effective, scalable and enables enterprises to access diverse services without requiring considerable infrastructure administration. Hybrid cloud deployment is ideal for enterprises requiring flexibility, scalability, and quick resource access. The increasing adoption of multi-cloud strategies drives the demand for the hybrid cloud segment. Cloud service providers deliver resources such as computer power, storage, and networking via the Internet.
The private cloud segment is expected to witness the fastest CAGR over the forecast period. The need for business continuity and disaster recovery drives the adoption of application modernization services in the private cloud segment. Application modernization services providers help organizations modernize applications for private cloud deployment. Leveraging features such as data replication, failover clustering, and automated backup and recovery to minimize the downtime and data loss in the event of hardware failures, natural disasters, or cyber-attacks. The imperative to support modern development practices such as DevOps and microservices architecture is fueling the adoption of application modernization services within private cloud environments.
Global Application Modernization Services Market By Deployment Mode (%)
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Application Modernization Services Market Regional Insights
As per the application modernization services market analysis, North America is the most significant global application modernization services market shareholder and is estimated to grow at a CAGR of 14.6% over the forecast period. Rapidly changing IT infrastructure, expanding small and medium-sized organizations (SMEs), and rising cybersecurity solutions drive the North American application modernization services market. Growing IT supply manufacturers and distributors in the United States are replacing physical servers with virtualized environments to cut costs. Canada is experiencing strong demand in a multi-cloud scenario and more significant automation usage. Such approaches benefit the regional application modernization services industry.
Asia-Pacific is anticipated to exhibit a CAGR of 14.8% over the forecast period. Many Asian countries are expected to demonstrate attractive opportunities for deploying application modernization technologies. The existence of numerous significant vendors and government investments in technology-related services encourages the adoption of application modernization. Asia-Pacific's application modernization market is driven by growing populations, major technological shifts, and the intensive technologies to meet expanding software service demand in nations such as Australia, China, Japan, and India. According to a Gartner analysis, investment in application modernization will increase as more software-as-a-service-based solution offerings become available.
Global Application Modernization Services Market By Geography
- Largest
- Fastest
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Application Modernization Services Market Dynamics
Application Modernization Services Market Drivers Business Agility and Innovation
- The business agility and innovation requirement drive enterprises to engage in the application modernization services. Legacy systems frequently need more agility for rapid change and innovation, driving firms to upgrade their applications. Companies must be adaptable in a continuously changing business world, responding to market movements, client preferences, and emerging technologies.
Rising Digital Transformation Initiatives
- The worldwide integration of digitalization is creating an upsurge in the demand for application modernization services. Enabling mobility has become a norm for most organizations which have chosen to abandon the old and overused legacy systems. Organizations are therefore embracing a modern architectural framework comprising of microservices, containerization, cloud-native and others. These systems operate on high efficiency reducing the order fulfillment time, ensuring real time processing of information and actively managing the market demand fluctuations. For instance, Ford has partnered with Google Cloud to completely digitize its operations and processes by automating the IT infrastructure.
Application Modernization Services Market Restraints
Budget Constraints and Legacy Complexity
- Legacy systems, defined by monolithic architectures and obsolete technology, sometimes contain intricate interdependencies and complex topologies. According to a SkyQuest analysis, 69% of firms say integrating with existing legacy systems is the most challenging aspect of their digital transformation efforts. This shows the pervasive complexity of legacy systems, and the challenges businesses encounter when attempting to upgrade them. Modernizing these systems requires navigating complex codebases, dependencies, and sometimes antiquated technology, making the task easier.
High Costs and Complexity
- An application modernization services business must contend with the high cost and complexity of replacing obsolete systems as ‘the major challenge’. The process of modernization often requires huge amounts of money and rich technical know-how to redesign or overhaul existing applications. For example, for a SME, hundreds of millions of dollars would be considered as upfront cost incurred to upgrade its old legacy e-commerce systems.
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Application Modernization Services Market Competitive Landscape
The application modernization services industry is highly competitive, with major players like IBM Corporation, Accenture, Cognizant. IBM leveraging its hybrid cloud and AI capabilities, and cloud providers like AWS, Microsoft Azure and Accenture AI, machine learning, DevOps to enhance its modernization services. It focuses on integrating these two solutions, providing industry-specific offerings that consumers will address areas such as healthcare, BFSI and others. Cognizant emphasizes cloud migration and application transformation, strengthening its market presence by targeting different industries.
Global Application Modernization Services Market Top Player’s Company Profiles
- IBM (US)
- Accenture (Ireland)
- HCL Technologies (India)
- Atos (France)
- Capgemini (France)
- Cognizant (US)
- TCS (India)
- Bell Integrator (US)
- Oracle (US)
- Microsoft (US)
- Innova Solutions (US)
- Epam Systems (US)
- Aspire Systems (India)
- NTT Data (Japan)
- Dell Technologies (US)
- DXC Technology (US)
- Infosys (India)
- Wipro (India)
- Fujitsu (Japan)
- Softura (US)
- Hexaware Technologies (India)
- Mongodb (US)
- CloudHedge (India)
- D3V Technology Solutions (US)
- Bayshore Intelligence Solutions (US)
- Opinov8 (UK)
- One Six Solutions (US)
- Cleveroad (Ukraine)
- Techahead (India)
- Geomotiv (Belarus)
- Soft Suave (India)
Recent Developments
- In January 2024, IBM Corporation acquired application modernization capabilities from Advanced, increasing IBM Consulting's offerings in mainframe application and data modernization services. The acquisition is intended to enhance IBM's ability to provide a comprehensive range of options for modernizing mainframe applications, aligning with the abilities of IBM Watsonx Code Assistant for Z.
- in April 2023, Infosys and LexisNexis started working together to provide information services across content, enterprise, and product applications. These services will provide content modernization, application modernization, life cycle upgrades, application maintenance and support, and application development and validation.
- In June 2021, Atos announced the launch of its new Cloud-Native Development Factory, a platform that enables organizations to modernize their legacy applications and develop cloud-native applications using modern technologies.
Application Modernization Services Key Market Trends
- Government Initiatives and Compliance Requirement: Governments worldwide understand the need for technology to improve public services, increase efficiency, and maintain regulatory compliance. Government initiatives to promote digital transformation and compliance requirements in many industries drive demand for application modernization services. The European Commission has approved an adjustment to the Digital Europe Programmed Work 2023-2024, which comprises an investment of more than €760 million.
- Proliferation of Kubernetes and Containerization: The growing embrace of Kubernetes entails the use of effective management and operations at scale. With increasing numbers of stateful applications, so does the challenge in managing such applications along with the resources that are needed to support them. Considering this, it becomes imperative for organizations to put in place some management tools to tackle the challenges associated with Kubernetes workloads while providing for growth. Numerous organizations are embracing this technology to package applications in containers to enhance movement of applications and manage information throughout different systems.
Application Modernization Services Market SkyQuest Analysis
SkyQuest’s ABIRAW (Advanced Business Intelligence, Research & Analysis Wing) is our Business Information Services team that Collects, Collates, Correlates, and Analyses the Data collected by means of Primary Exploratory Research backed by robust Secondary Desk research.
According to SkyQuest analysis, the rise of digital transformation initiatives and the adoption of cloud-native technologies are driving organizations to modernize their applications. Cloud-native applications leverage cloud services, containers, and serverless computing to maximize scalability, resilience, and agility. Application modernization services help organizations embrace cloud-native architectures, refactor applications for compatibility, and effectively orchestrate cloud deployments. The region has an established digital infrastructure that allows firms to modernize legacy systems and increase profits quickly. Security is a major concern for companies looking to modernize their legacy applications. Modernization services may introduce new security risks, which need to be carefully managed and addressed.
| Report Metric | Details | ||
|---|---|---|---|
Market size value in 202| USD Market size value in 203< |
USD Growth Rate |
16.80% |
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| Base year | 2023 | ||
| Forecast period | 2024-2031 | ||
| Forecast Unit (Value) | USD Class="NormalTextRun | ||
| Segments covered |
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| Regions covered | North America (US, Canada), Europe (Germany, France, United Kingdom, Italy, Spain, Rest of Europe), Asia Pacific (China, India, Japan, Rest of Asia-Pacific), Latin America (Brazil, Rest of Latin America), Middle East & Africa (South Africa, GCC Countries, Rest of MEA) | ||
| Companies covered |
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| Customization scope | Free report customization with purchase. Customization includes:-
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Table Of Content
Executive Summary
Market overview
- Exhibit: Executive Summary – Chart on Market Overview
- Exhibit: Executive Summary – Data Table on Market Overview
- Exhibit: Executive Summary – Chart on Application Modernization Services Market Characteristics
- Exhibit: Executive Summary – Chart on Market by Geography
- Exhibit: Executive Summary – Chart on Market Segmentation
- Exhibit: Executive Summary – Chart on Incremental Growth
- Exhibit: Executive Summary – Data Table on Incremental Growth
- Exhibit: Executive Summary – Chart on Vendor Market Positioning
Parent Market Analysis
Market overview
Market size
- Market Dynamics
- Exhibit: Impact analysis of DROC, 2021
- Drivers
- Opportunities
- Restraints
- Challenges
- Exhibit: Impact analysis of DROC, 2021
- SWOT Analysis
KEY MARKET INSIGHTS
- Technology Analysis
- (Exhibit: Data Table: Name of technology and details)
- Pricing Analysis
- (Exhibit: Data Table: Name of technology and pricing details)
- Supply Chain Analysis
- (Exhibit: Detailed Supply Chain Presentation)
- Value Chain Analysis
- (Exhibit: Detailed Value Chain Presentation)
- Ecosystem Of the Market
- Exhibit: Parent Market Ecosystem Market Analysis
- Exhibit: Market Characteristics of Parent Market
- IP Analysis
- (Exhibit: Data Table: Name of product/technology, patents filed, inventor/company name, acquiring firm)
- Trade Analysis
- (Exhibit: Data Table: Import and Export data details)
- Startup Analysis
- (Exhibit: Data Table: Emerging startups details)
- Raw Material Analysis
- (Exhibit: Data Table: Mapping of key raw materials)
- Innovation Matrix
- (Exhibit: Positioning Matrix: Mapping of new and existing technologies)
- Pipeline product Analysis
- (Exhibit: Data Table: Name of companies and pipeline products, regional mapping)
- Macroeconomic Indicators
COVID IMPACT
- Introduction
- Impact On Economy—scenario Assessment
- Exhibit: Data on GDP - Year-over-year growth 2016-2022 (%)
- Revised Market Size
- Exhibit: Data Table on Application Modernization Services Market size and forecast 2021-2027 ($ million)
- Impact Of COVID On Key Segments
- Exhibit: Data Table on Segment Market size and forecast 2021-2027 ($ million)
- COVID Strategies By Company
- Exhibit: Analysis on key strategies adopted by companies
MARKET DYNAMICS & OUTLOOK
- Market Dynamics
- Exhibit: Impact analysis of DROC, 2021
- Drivers
- Opportunities
- Restraints
- Challenges
- Exhibit: Impact analysis of DROC, 2021
- Regulatory Landscape
- Exhibit: Data Table on regulation from different region
- SWOT Analysis
- Porters Analysis
- Competitive rivalry
- Exhibit: Competitive rivalry Impact of key factors, 2021
- Threat of substitute products
- Exhibit: Threat of Substitute Products Impact of key factors, 2021
- Bargaining power of buyers
- Exhibit: buyers bargaining power Impact of key factors, 2021
- Threat of new entrants
- Exhibit: Threat of new entrants Impact of key factors, 2021
- Bargaining power of suppliers
- Exhibit: Threat of suppliers bargaining power Impact of key factors, 2021
- Competitive rivalry
- Skyquest special insights on future disruptions
- Political Impact
- Economic impact
- Social Impact
- Technical Impact
- Environmental Impact
- Legal Impact
Market Size by Region
- Chart on Market share by geography 2021-2027 (%)
- Data Table on Market share by geography 2021-2027(%)
- North America
- Chart on Market share by country 2021-2027 (%)
- Data Table on Market share by country 2021-2027(%)
- USA
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Canada
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Europe
- Chart on Market share by country 2021-2027 (%)
- Data Table on Market share by country 2021-2027(%)
- Germany
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Spain
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- France
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- UK
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Rest of Europe
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Asia Pacific
- Chart on Market share by country 2021-2027 (%)
- Data Table on Market share by country 2021-2027(%)
- China
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- India
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Japan
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- South Korea
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Rest of Asia Pacific
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Latin America
- Chart on Market share by country 2021-2027 (%)
- Data Table on Market share by country 2021-2027(%)
- Brazil
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Rest of South America
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Middle East & Africa (MEA)
- Chart on Market share by country 2021-2027 (%)
- Data Table on Market share by country 2021-2027(%)
- GCC Countries
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- South Africa
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Rest of MEA
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
KEY COMPANY PROFILES
- Competitive Landscape
- Total number of companies covered
- Exhibit: companies covered in the report, 2021
- Top companies market positioning
- Exhibit: company positioning matrix, 2021
- Top companies market Share
- Exhibit: Pie chart analysis on company market share, 2021(%)
- Total number of companies covered
Methodology
For the Application Modernization Services Market, our research methodology involved a mixture of primary and secondary data sources. Key steps involved in the research process are listed below:
1. Information Procurement: This stage involved the procurement of Market data or related information via primary and secondary sources. The various secondary sources used included various company websites, annual reports, trade databases, and paid databases such as Hoover's, Bloomberg Business, Factiva, and Avention. Our team did 45 primary interactions Globally which included several stakeholders such as manufacturers, customers, key opinion leaders, etc. Overall, information procurement was one of the most extensive stages in our research process.
2. Information Analysis: This step involved triangulation of data through bottom-up and top-down approaches to estimate and validate the total size and future estimate of the Application Modernization Services Market.
3. Report Formulation: The final step entailed the placement of data points in appropriate Market spaces in an attempt to deduce viable conclusions.
4. Validation & Publishing: Validation is the most important step in the process. Validation & re-validation via an intricately designed process helped us finalize data points to be used for final calculations. The final Market estimates and forecasts were then aligned and sent to our panel of industry experts for validation of data. Once the validation was done the report was sent to our Quality Assurance team to ensure adherence to style guides, consistency & design.
Analyst Support
Customization Options
With the given market data, our dedicated team of analysts can offer you the following customization options are available for the Application Modernization Services Market:
Product Analysis: Product matrix, which offers a detailed comparison of the product portfolio of companies.
Regional Analysis: Further analysis of the Application Modernization Services Market for additional countries.
Competitive Analysis: Detailed analysis and profiling of additional Market players & comparative analysis of competitive products.
Go to Market Strategy: Find the high-growth channels to invest your marketing efforts and increase your customer base.
Innovation Mapping: Identify racial solutions and innovation, connected to deep ecosystems of innovators, start-ups, academics, and strategic partners.
Category Intelligence: Customized intelligence that is relevant to their supply Markets will enable them to make smarter sourcing decisions and improve their category management.
Public Company Transcript Analysis: To improve the investment performance by generating new alpha and making better-informed decisions.
Social Media Listening: To analyze the conversations and trends happening not just around your brand, but around your industry as a whole, and use those insights to make better Marketing decisions.
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