Global Mainframe Modernization Market Size, Share & Industry Analysis Report By Organization Size (Large Enterprises and SMEs), By Component Type (Services and Software), By Vertical (BFSI, IT & ITeS, Healthcare, Retail, Manufacturing, Media & Entertainme

The Global Mainframe Modernization Market size is expected to reach $15.91 billion by 2032, rising at a market growth of 9.5% CAGR during the forecast period.

Key Highlights:

• The North America market dominated Global Mainframe Modernization Market in 2024, accounting for a 33.47% revenue share in 2024.
• The U.S. market is projected to maintain its leadership in North America, reaching a market size of USD 3.39 billion by 2032.
• Among the Organization Size, the Large Enterprises segment dominated the global market, contributing a revenue share of 66.92% in 2024.
• In terms of Component Type, Services segment are expected to lead the global market, with a projected revenue share of 61.64% by 2032.
• The BFSI market emerged as the leading Vertical in 2024, capturing a 24.50% revenue share, and is projected to retain its dominance during the forecast period.

Mainframe modernization has developed into transformation initiatives that blend traditional strengths with modern digital architectures. Mainframes are prompting enterprises to seek agility through modernization, which initially was designed for high-volume transaction processing and reliability. Financial institutions, governments, and large enterprises are key factors driving these trends, integrating modernization to improve service delivery, support digital initiatives, and reduce costs. The advent of AI-based code analysis, cloud integration tools, and DevSecOps practices has further surged modernization, transforming it from a one-time migration to an adaptive process that aligns with developing regulatory and business requirements.

The mainframe modernization market is driven by elements such as automation, strategic collaboration, and hybrid deployment models, and strategic partnerships among technology providers, cloud providers, and system integrators. Machine learning and AI now supports modernization toolchains that automate refactoring, reducing risk, legacy code, and improving testing accuracy. Key market players pursue domain-specific accelerators, phased migration, and managed modernization services to assure long-term transformation and continuity. The competition is becoming intense, ranging from tech giants to startups offering automation-driven solutions. The market growth largely depends on security integration, technological innovation, and the capability to deliver predictable, low-risk modernization outcomes. As public agencies and enterprises strive to balance legacy stewardship with digital transformation, mainframe modernization has become a crucial part of enterprise agility and future-readiness.

The major strategies followed by the market participants are Product Launches as the key developmental strategy to keep pace with the changing demands of end users. For instance, In October, 2025, IBM Corporation unveiled new software and infrastructure enhancements aimed at helping enterprises scale AI in production. Among them, it will bring WatsonX Assistant for Z, which enables AI agents specific to IBM Z systems, integrating modernization and intelligent operations in mainframe environments. Moreover, In May, 2025, Tata Consultancy Services Ltd. unveiled the GenAI and Agentic AI-powered TCS MasterCraft, a platform designed to accelerate legacy system modernization. By automating business logic mining and code transformation, it aims to reduce modernization costs by over 70% and achieve results twice as fast as traditional methods.

KBV Cardinal Matrix - Mainframe Modernization Market Competition Analysis

Based on the Analysis presented in the KBV Cardinal matrix; Amazon Web Services, Inc. is the forerunner in the Mainframe Modernization Market. In September, 2025, Amazon Web Services, Inc. unveiled a cloud-native service enabling the conversion of legacy Assembler programs and macros into COBOL code and copybooks. This solution addresses the scarcity of Assembler expertise, reduces technical debt, and accelerates mainframe modernization by facilitating seamless integration into modern cloud environments. Companies such as Accenture PLC, IBM Corporation, and Tata Consultancy Services Ltd. are some of the key innovators in Mainframe Modernization Market.

COVID 19 Impact Analysis

The COVID-19 pandemic impacted the mainframe modernization market because companies put off or canceled modernization projects at first because they didn't have enough money, weren't sure how to run their businesses, and were focused on keeping their critical operations running and allowing employees to work from home. Delays in project timelines were caused by problems with global supply chains and limited mobility. Limited access to skilled IT workers also pushed back implementation schedules and raised costs. Businesses in important areas like banking, retail, and manufacturing cut back on IT spending, which slowed market growth. This was because businesses put short-term survival ahead of long-term digital transformation. Still, the pandemic showed how old systems aren't always the best, which led to a renewed interest in modernization after the pandemic to make IT infrastructure more flexible, scalable, and resilient. Thus, the COVID-19 pandemic had a negative impact on the market.

Market Share Analysis

The leading players in the market are competing with diverse innovative offerings to remain competitive in the market. The above illustration shows the percentage of revenue shared by some of the leading companies in the market. The leading players of the market are adopting various strategies in order to cater demand coming from the different industries. The key developmental strategies in the market are Acquisitions, and Partnerships & Collaborations.

Organization Size Outlook

Based on Organization Size, the market is segmented into Large Enterprises and SMEs. The SMEs segment attained 33% revenue share in the mainframe modernization market in 2024.  Small and medium-sized enterprises (SMEs) are increasingly embracing mainframe modernization as part of their broader digital evolution. While these businesses often have smaller IT infrastructures compared to large corporations, they recognize the value of upgrading legacy systems to improve business agility, customer experience, and competitiveness. Modernization initiatives among SMEs are often driven by the need to streamline operations, reduce maintenance costs, and leverage cloud-based platforms for scalability and innovation

Component Type Outlook

Based on Component Type, the market is segmented into Services and Software. The software segment recorded 37% revenue share in the mainframe modernization market in 2024.  The software segment forms an integral part of the mainframe modernization landscape, offering advanced tools and platforms that enable automation, integration, and seamless transformation of legacy systems. These software solutions assist in modernizing applications, managing data migration, and ensuring compatibility with cloud-native architectures. Vendors are continuously innovating to develop low-code and AI-driven modernization software that simplifies the transformation process and enhances system agility.

Regional Outlook

Region-wise, the Mainframe Modernization Market is analyzed across North America, Europe, Asia Pacific, and LAMEA. The North America segment recorded 33% revenue share in the Mainframe Modernization Market in 2024. The mainframe modernization market is anticipated to grow at a significant rate in North America and Europe. This is due to high modernization spending in insurance, financial services, and government, looking for cost reduction, regulatory compliance, and cloud-hybrid architectures, and a large volume of ongoing transformation projects. Moreover, the European mainframe modernization market is predicted to experience prominent growth in the upcoming years. The regional market is regulatory sensitive, where modernization programs balance compliance and risk with agility-many companies prefer on-platform modernization and hybrid approaches to safeguard crucial workloads while adopting AI and cloud capabilities.

In the Asia Pacific and LAMEA, the mainframe modernization market is expected to experience substantial growth. The Asia Pacific -led by nations such as Japan, China, India, and Southeast Asia is driven by increasing cloud adoption, rapid digitalization, and large legacy modernization initiatives. Further, the demand for refactoring, replatforming, and modernization services is surging, thereby offering positive opportunities to the market. Moreover, the LAMEA mainframe modernization market is anticipated to expand. This expansion is supported by growing public sector digitalization, increased spending in banking/telecom IT, and global providers collaborating with regional providers.

Market Competition and Attributes

The Mainframe Modernization Market is very competitive because there is a growing need for IT infrastructures that can grow, adapt, and save money. To stay ahead, players focus on new ideas, unique services, and smart partnerships. The market is really focused on providing full modernization solutions, such as moving to the cloud, re-platforming applications, and integrating old systems. The need for faster, more flexible, and more secure mainframe modernization services, along with quick changes in technology and the needs of businesses, are all factors that affect competition.

Recent Strategies Deployed in the Market

• Oct-2025: IBM Corporation teamed up with Cockroach Labs to integrate CockroachDB, a cloud-native PostgreSQL-compatible database, into mainframe environments like LinuxONE and Linux on Z. This collaboration aims to modernize legacy systems, enabling enterprises to adopt cloud-native architectures without overhauling existing applications, thereby facilitating smoother transitions to hybrid infrastructures.
• Aug-2025: HCL Technologies Ltd. teamed up with Everest Group and released a whitepaper detailing the evolving role of mainframes in an AI-enabled world. It highlights the need for modernization to address rising costs, talent shortages, and the demand for agility, aiming to unlock new business value.
• May-2025: DXC Technology Company teamed up with SAP and Microsoft to enhance SAP modernization through the DXC Complete Managed Services Provider (MSP) offering. This collaboration delivers flexible, scalable, and AI-ready cloud solutions, facilitating the modernization of legacy systems and aligning with the growing demand for mainframe modernization in the enterprise sector.
• Apr-2025: IBM Corporation unveiled the z17 mainframe with advanced AI capabilities, including the Telum II processor and Spyre Accelerator, enabling enterprises to modernize mainframes, efficiently manage AI workloads, enhance real-time data processing, and drive digital transformation across industries such as finance, healthcare, and retail.
• Apr-2025: Accenture PLC teamed up with Google Cloud to assist organizations in adopting and scaling advanced technologies, including agentic AI and mainframe modernization. This collaboration aims to help clients build agile, cloud-based digital cores, integrating data and AI to drive innovation and growth.
• Feb-2025: Infosys Limited unveiled an open-source Responsible AI Toolkit, part of its Topaz suite, enabling enterprises to implement ethical AI practices. It provides customizable APIs for safety, privacy, fairness, and explainability. While not directly tied to mainframe modernization, organizations modernizing systems can use it to ensure AI-driven processes remain responsible and compliant.

List of Key Companies Profiled

• IBM Corporation
• Accenture PLC
• HCL Technologies Ltd. (HCL Enterprises)
• Amazon Web Services, Inc. (Amazon.com, Inc.)
• Tata Consultancy Services Ltd.
• Capgemini SE
• Infosys Limited
• DXC Technology Company
• Wipro Limited
• Open Text Corporation

Global Mainframe Modernization Market Report Segmentation

By Organization Size

• Large Enterprises
• SMEs

By Component Type

• Services
• Software

By Vertical

• BFSI
• IT & ITeS
• Healthcare
• Retail
• Manufacturing
• Media & Entertainment
• Education
• Other Vertical

By Geography

• North America
• US
• Canada
• Mexico
• Rest of North America
• Europe
• Germany
• UK
• France
• Russia
• Spain
• Italy
• Rest of Europe
• Asia Pacific
• China
• Japan
• India
• South Korea
• Singapore
• Malaysia
• Rest of Asia Pacific
• LAMEA
• Brazil
• Argentina
• UAE
• Saudi Arabia
• South Africa
• Nigeria
• Rest of LAMEA

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