Application Modernization Services Market to Reach USD 67.87 Billion by 2032-Exclusive Report by SNS Insider

The Application Modernization Services Market is expanding rapidly, driven by the adoption of cloud, AI, and emerging technologies across industries.

Pune, Feb. 04, 2025 (GLOBE NEWSWIRE) — Application Modernization Services Market Size Analysis:

“The Application Modernization Services Market was valued at USD 17.49 Billion in 2023 and is projected to reach USD 67.87 Billion by 2032, growing at a compound annual growth rate (CAGR) of 16.32% from 2024 to 2032.”

Growing Demand for Application Modernization Services Driven by Cloud, AI, and Emerging Technologies in Multiple Sectors.

The Application Modernization Services Market has experienced significant expansion as companies encounter mounting pressure to refresh their outdated systems. As cloud computing and digital transformation become more prevalent, businesses are recognizing the necessity to upgrade outdated applications for improved scalability, performance, and security. Microsoft Azure is the most frequently utilized platform for modernization, with AWS and Google Cloud in second and third place. For instance, in November 2024, Kyndryl and Microsoft introduced services aimed at modernizing mainframe applications with Microsoft Cloud. With the rapid pace of digital disruption, companies are in search of effective solutions to maintain competitiveness and adaptability.

With industries such as banking, retail, and manufacturing focusing on innovation, the need for modernization services has increased significantly. Obsolete systems obstruct the integration of cutting-edge technologies such as AI and machine learning, compelling companies to allocate resources for modernization. In January 2025, Accenture purchased Percipient’s digital twin technology to improve its banking services. New technologies such as AI, blockchain, and IoT will keep influencing the market, offering chances for service providers that facilitate long-term digital transformation.

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Major Players Analysis Listed in this Report are:

  • Oracle (Cloud Infrastructure, Java Application Development)
  • IBM (IBM Cloud, IBM Watson)
  • Microsoft (Azure, Power BI)
  • HCL Technologies (HCL CloudSmart, HCL Digital Transformation)
  • Accenture (Accenture Cloud Platform, Accenture myNav)
  • ATOS SE (Atos Digital Workplace, Atos Cloud Services)
  • Capgemini (Capgemini Cloud Services, Capgemini Smart Enterprise)
  • Cognizant (Cognizant Cloud, Cognizant Digital Engineering)
  • Tata Consultancy Services (TCS Cloud, TCS iON)
  • Aspire Systems (Aspire Digital Transformation, Aspire Cloud Solutions)
  • NTT Data Group Corporation (NTT Data Cloud, NTT Data Digital Transformation)
  • Infosys (Infosys Cloud, Infosys Cobalt)
  • Dell Technologies (Dell VxRail, Dell PowerEdge)
  • Innova Solutions (Innova Cloud Services, Innova Digital Transformation)
  • Epam Systems (EPAM Cloud, EPAM Digital Transformation)
  • DXC Technology (DXC Cloud, DXC Modernization Services)
  • MongoDB (MongoDB Atlas, MongoDB Enterprise)
  • LTIMindtree (LTM Cloud, LTM Digital Transformation)
  • Wipro (Wipro FullStride Cloud, Wipro Digital)
  • Rocket Software (Rocket Modernization, Rocket Cloud)
  • Fujitsu (Fujitsu Cloud, Fujitsu Digital Transformation)
  • Hexaware Technologies (Hexaware Cloud, Hexaware Digital Engineering)
  • Virtusa (Virtusa Cloud, Virtusa Digital Transformation)
  • Softura (Softura Cloud, Softura Digital Transformation)
  • CloudHedge (CloudHedge Modernization, CloudHedge Migration)
  • D3V Technology (D3V Cloud Solutions, D3V Digital Transformation)
  • Bayshore Intelligence (Bayshore Cloud, Bayshore Analytics)
  • Opinov8 (Opinov8 Cloud, Opinov8 Digital Transformation)
  • Icreon (Icreon Digital, Icreon Cloud)
  • Symphony Solutions (Symphony Cloud, Symphony Digital Transformation)
  • Cleveroad (Cleveroad Cloud, Cleveroad Digital Solutions)
  • Soft Suave (Soft Suave Cloud, Soft Suave Modernization)
  • Geomotiv (Geomotiv Cloud, Geomotiv Digital Transformation)
  • PalmDigitalz (PalmDigitalz Cloud, PalmDigitalz Digital Transformation)
  • AveriSource (AveriSource Cloud, AveriSource Digital Services)

Application Modernization Services Market Report Scope:

Report Attributes Details
Market Size in 2023 USD 17.49 Billion
Market Size by 2032 USD 67.87 Billion
CAGR CAGR of 16.32% From 2024 to 2032
Base Year 2023
Forecast Period 2024-2032
Historical Data 2020-2022
Key Regional Coverage North America (US, Canada, Mexico), Europe (Eastern Europe [Poland, Romania, Hungary, Turkey, Rest of Eastern Europe] Western Europe [Germany, France, UK, Italy, Spain, Netherlands, Switzerland, Austria, Rest of Western Europe]). Asia Pacific (China, India, Japan, South Korea, Vietnam, Singapore, Australia, Rest of Asia Pacific), Middle East & Africa (Middle East [UAE, Egypt, Saudi Arabia, Qatar, Rest of Middle East], Africa [Nigeria, South Africa, Rest of Africa], Latin America (Brazil, Argentina, Colombia Rest of Latin America)
Key Growth Drivers • Growing Need for Business Agility Drives Organizations to Modernize Applications for Faster Adaptation to Market Changes.

• Emerging Technologies Like AI, ML, and IoT Drive the Need for Modernizing Legacy Applications to Stay Competitive.

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Legacy Applications Leads, While Cloud-Native Applications Drive Fastest Growth

In 2023, the Legacy Applications segment led the Application Modernization Services Market, capturing about 45% of the revenue share. This dominance stems from the widespread reliance on outdated systems, which incur high maintenance costs and hinder business agility. To overcome these challenges, many organizations are focusing on modernizing legacy applications to enhance efficiency, security, and alignment with new technologies, driving strong demand for modernization services.

The Cloud-Native Applications segment is anticipated to experience the fastest growth, with a CAGR of approximately 18.00% from 2024 to 2032. The growing adoption of cloud technologies, which offer scalability, flexibility, and cost efficiency, is fueling this growth. As businesses increasingly transition to the cloud, the demand for cloud-native applications optimized for these environments is expected to surge, driving the segment’s rapid expansion.

Application Re-Platforming Leads, While Cloud Application Migration Drives Fastest Growth

In 2023, the Application Re-Platforming segment led the Application Modernization Services Market, securing approximately 28% of the revenue share. This dominance is driven by companies seeking a cost-effective approach to modernize legacy systems without full-scale overhauls. Re-platforming enables businesses to migrate applications to more scalable, flexible platforms like the cloud, enhancing performance and maintaining business continuity. This method balances modernization goals with cost efficiency, making it an appealing choice for organizations aiming to enhance their IT infrastructure with minimal disruption.

The Cloud Application Migration segment is projected to grow at the fastest CAGR of about 18.22% from 2024 to 2032. This growth is fueled by the increasing shift of businesses towards cloud environments, seeking better scalability, security, and operational efficiency. As organizations align their applications with digital transformation goals, demand for cloud migration services is expected to soar, enabling businesses to leverage cloud technologies for growth and innovation.

Application Modernization Services Market Segmentation:

By Service Type

  • Application Portfolio Assessment
  • Cloud Application Migration
  • Application Re-Platforming
  • Application Integration
  • UI/UX Modernization
  • Post-Modernization Services

By Application Type

  • Legacy Applications
  • Cloud-Hosted Applications
  • Cloud-Native Applications

By Industry Vertical

  • BFSI
  • Retail & E-commerce
  • Manufacturing
  • IT & Telecommunication
  • Energy and Utilities
  • Healthcare & Life Sciences
  • Other

By Deployment

  • Public Cloud
  • Private Cloud
  • Hybrid Cloud

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North America Dominates the Market, While Asia Pacific Leads in the Fastest Growth

In 2023, North America led the Application Modernization Services Market with the largest revenue share of approximately 42%. This dominance is attributed to the region’s advanced technological infrastructure, extensive digital transformation efforts, and widespread adoption of cloud and AI technologies. North American organizations are increasingly modernizing legacy systems to improve operational efficiency, bolster security, and maintain a competitive edge in a rapidly changing business environment, making the region a major contributor to market growth.

Asia Pacific is projected to experience the fastest growth, with a CAGR of around 18.15% from 2024 to 2032. This growth is driven by the region’s expanding digital economy, growing investments in IT modernization, and increasing cloud adoption. As businesses across Asia Pacific accelerate digital transformation, the demand for application modernization services is expected to rise, particularly in emerging markets where modernization is key to sustainable growth.

Recent Developments in Application Modernization Services Market

  • In 2024, Cloud4C introduced Oracle Application Management Services on OCI, enhancing cloud management, performance, and application modernization with automated patching and 24/7 support.
  • In January 2024, IBM acquired application modernization capabilities from Advanced, strengthening IBM Consulting’s hybrid cloud strategies with AI-powered tools like Watsonx Code Assistant for Z to streamline mainframe transformations.

Table of Contents – Major Key Points

1. Introduction

2. Executive Summary

3. Research Methodology

4. Market Dynamics Impact Analysis

5. Statistical Insights and Trends Reporting

6. Competitive Landscape

7. Application Modernization Services Market Segmentation, By Service Type

8. Application Modernization Services Market Segmentation, By Application Type

9. Application Modernization Services Market Segmentation, By Industry Vertical

10. Application Modernization Services Market Segmentation, By Deployment

11. Regional Analysis

12. Company Profiles

13. Use Cases and Best Practices

14. Conclusion

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