Mainframe Modernization Services Market to Reach USD 76.16 Billion by 2032, Growing at a CAGR of 15.1%: Credence Research

Mainframe Modernization Services Market to Reach USD 76.16 Billion by 2032, Growing at a CAGR of 15.1%: Credence Research

PR Newswire

PUNE, India, June 18, 2025

PUNE, India, June 18, 2025 /PRNewswire/ -- According to a recent market analysis published by Credence Research, the global Mainframe Modernization Services Market is set to experience extraordinary growth, expanding from USD 21.5 billion in 2024 to USD 76.16 billion by 2032. This surge reflects a strong compound annual growth rate (CAGR) of 15.1% from 2025 to 2032. The report attributes this growth to the rising demand among enterprises to upgrade legacy infrastructure, reduce maintenance costs, and enhance agility through digital transformation.

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Credence Research notes that enterprises across sectors—particularly banking, insurance, healthcare, and government—are accelerating mainframe modernization to align with cloud-first strategies and future-ready IT ecosystems. The growing need for integration with modern digital platforms, along with advancements in automation, AI, and microservices architecture, is expected to further drive market momentum in the years ahead.

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Key Growth Determinants – Mainframe Modernization Services Market

Demand for Operational Efficiency and Business Agility
Organizations are under pressure to respond quickly to market changes and customer demands. Legacy mainframes often lack the flexibility and speed needed for modern operations. By modernizing these systems, companies can improve performance, streamline workflows, and increase adaptability—leading to faster decision-making and reduced time-to-market.

Accelerated Adoption of Cloud Technologies
Cloud computing plays a central role in modern IT infrastructure. Businesses are increasingly migrating mainframe workloads to public, private, or hybrid cloud environments to benefit from scalability, lower infrastructure costs, and seamless access to advanced tools. Mainframe modernization enables integration with cloud platforms, supporting cloud-native development and DevOps practices.

Rising Costs and Risks of Legacy System Maintenance
Maintaining outdated mainframes is becoming increasingly expensive and complex. Hardware support is declining, and specialized skills are scarce, leading to higher operational risks and costs. Modernization allows companies to replace rigid legacy frameworks with more cost-effective, future-proof solutions.

Enterprise-Wide Digital Transformation Initiatives
Industries such as banking, insurance, retail, and healthcare are investing in digital transformation to stay competitive. Mainframe modernization is a foundational step in this journey, enabling seamless data flow, real-time analytics, and integration with emerging technologies like AI, IoT, and blockchain—driving innovation and customer-centric solutions.

 Key Growth Barriers – Mainframe Modernization Services Market

Key Market Opportunities – Mainframe Modernization Services Market

  1. Expansion of Cloud-Native and Hybrid Cloud Integration
    Enterprises increasingly seek to integrate mainframe applications with cloud-native architectures. Modernization services that enable seamless migration to hybrid environments—leveraging containerization, microservices, and API-driven connectivity—stand to gain significant traction.
  2. Advent of AI-Driven Automation
    Incorporating AI and machine learning into modernization workflows—such as code refactoring, workload optimization, and predictive maintenance—presents a compelling opportunity. Automated tools can accelerate migration timelines and reduce errors, unlocking cost savings and improved performance.
  3. Rise in Industry-Specific Solutions
    Tailored modernization offerings for regulated industries (like banking, healthcare, and utilities) are in demand. Services that embed compliance, data governance, and sector-specific integrations provide differentiated value and reduce adoption barriers for regulated customers.
  4. Modernization as a Service (MaaS) Models
    Consumption-based offerings—such as pay-as-you-go or managed modernization platforms—are gaining appeal. These flexible models reduce upfront investment and risk, enabling customers to modernize incrementally while benefiting from expert-managed support.
  5. M&A and Legacy System Consolidations
    As organizations undergo mergers, acquisitions, or business restructuring, consolidating legacy mainframes becomes essential. Modernization services that simplify platform consolidation and rationalization across diverse environments are ripe for growth.
  6. Emergence of Microservices and API Monetization
    Transforming monolithic mainframe workloads into modular microservices enables enterprises to create new digital offerings and monetization opportunities. Service providers that specialize in modern API frameworks and ecosystem integration can tap into this growing demand.

Segmentation

Based on Type

Based on Enterprise Size

Based on End User

Based on region

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Regional Analysis – Mainframe Modernization Services Market

North America, especially the United States, dominates the mainframe modernization market. Enterprises in banking, insurance, and telecom are prioritizing modernization to drive digital transformation and reduce legacy operational costs. Strong presence of major IT service providers and early adoption of cloud and AI-driven tools bolster regional growth. Additionally, favorable regulatory frameworks and large-scale corporate investments support robust spending in modernization services.

Europe shows steady growth driven by government, healthcare, and financial institutions focused on data security and compliance. The European Union's evolving data privacy regulations (e.g., GDPR) compel organizations to modernize legacy systems to meet stringent standards. Hybrid cloud adoption is accelerating as businesses embrace modernization to support cross-border business use cases and achieve system consolidation.

LATAM and MEA regions are gradually embracing modernization, with modern cloud and digital initiatives predominantly led by government and financial sectors. Public sector transformation initiatives and infrastructure upgrades in countries like Brazil, the UAE, and South Africa are creating fresh modernization opportunities. However, progress remains somewhat constrained by economic volatility, limited technical expertise, and budgetary limits.

Credence Research's Competitive Landscape Analysis – Mainframe Modernization Services Market

According to Credence Research, the competitive landscape of the Mainframe Modernization Services Market is characterized by a blend of global IT integrators, cloud hyperscalers, and niche modernization vendors. Leading players such as IBM, Accenture, Cognizant, and DXC Technology dominate the market with comprehensive service portfolios covering consulting, cloud migration, and platform modernization. Major cloud providers like Microsoft Azure and AWS are instrumental in enabling hybrid and cloud-native transformations. Indian IT giants including TCS, Infosys, and Wipro continue to expand their modernization offerings globally, leveraging domain-specific accelerators and cost-efficient delivery models. Meanwhile, specialized vendors like Rocket Software, Unisys, and TmaxSoft offer tailored solutions focused on rehosting, refactoring, and legacy integration with modern technologies such as AI and containerization. Regional players in Europe and Asia-Pacific are also strengthening their presence, supported by growing enterprise demand for industry-specific modernization and regulatory compliance. The market remains highly competitive and innovation-driven, with strategic partnerships and acquisitions playing a vital role in service differentiation and capability enhancement.

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Key Player Analysis

 Recent Industry Developments

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