Mainframe Modernization Market by Offering (Software, Services), Organization Size (Large Enterprises, SMEs), Vertical (BFSI, Telecom, IT & ITES, Retail & Ecommerce, Government, Others), and Region - Global Forecast to 2030

The mainframe modernization market is projected to grow from USD 8.39 billion in 2025 to USD 13.34 billion by 2030, at a CAGR of 9.7%, from 2025 to 2030. Key players in mainframe modernization are rapidly advancing transformation through AI-driven automation, strategic partnerships, and specialized frameworks. IBM is modernizing mainframes with AI and partnering with others to enhance banking and data processing. AWS is accelerating cloud migration for finance with Kyndryl. Capgemini, HCLTech, and TCS are also leveraging AI and automation for efficient legacy-to-cloud transitions and modernization in regulated sectors.

However, the formidable complexity associated with migrating legacy codebases, which often include undocumented code and tightly coupled business logic, restrains market growth. The risk of data loss and business disruption is large unless migration is planned and executed meticulously, often leading organizations to adopt hybrid or gradual modernization strategies supported by both automation and expert-led interventions.

“Mainframe application modernization services segment will register the largest market share during the forecast period”

Mainframe application modernization services are in demand as organizations seek to transform legacy applications into agile and cloud-ready solutions while ensuring operational continuity and regulatory compliance. These services, encompassing re-hosting, re-platforming, re-architecting, and AI-driven refactoring, are critical because most enterprises lack the expertise to modernize complex legacy applications internally. Service providers help clients unlock real-time analytics, enable API-driven integration, and support seamless cloud migration with minimal downtime.

Financial institutions and telecom companies, for example, rely heavily on application modernization services to maintain business-critical workloads while adopting digital-first strategies. The rise of AI-powered automation tools accelerates code conversion, reduces manual errors, and shortens project timelines, enabling faster rollout of new digital services. With compliance demands and security risks rising, enterprises prefer these comprehensive modernization service engagements to handle complexity, ensure risk-managed transformation, and optimize legacy investments.

“BFSI segment is projected to register the largest market share during the forecast period”

The BFSI sector remains the primary driver of mainframe modernization due to its dependence on secure, resilient legacy systems supporting high-volume transaction processing and real-time financial services. Regulatory complexities such as anti-money laundering, digital banking mandates, and financial reporting demand continual platform upgrades that align legacy infrastructure with modern cloud and AI ecosystems.

Many institutions use modernization techniques, such as AI-assisted code refactoring and API enablement, to maintain critical system stability while introducing innovation and ensuring compliance. Leading banks in Japan and the US are modernizing core payment and risk platforms with incremental, cloud-integrated strategies to meet evolving customer expectations and regulatory scrutiny. The sector’s cautious yet ambitious approach reflects its need for business continuity, data integrity, and fast adaptability in a rapidly shifting financial landscape.

“Asia Pacific will record the highest growth rate, while North America will hold the largest market share during the forecast period”

Asia Pacific is emerging as a key region for mainframe modernization driven by a unique blend of large, mature mainframe estates and fast-paced digital economy growth. India, Japan, China, and Southeast Asian nations prioritize modernizing legacy systems to support digital banking, mobile payments, public sector digital initiatives, and regulatory compliance. This modernization often involves phased migrations, hybrid cloud deployments, and AI-enabled automation to handle enormous transaction volumes while reducing operational risk.

Regulatory pressures around data sovereignty and open banking accelerate the urgency of modernization. Enterprises in Asia Pacific are embracing cloud-native integration and API-first architectures to transform traditional workflows and enhance real-time processing capabilities. The collaborative innovation ecosystem, combining global technology vendors with strong local IT service providers, further fuels growth of the Asia Pacific market.

North America maintains its dominant share in the mainframe modernization sector, primarily driven by a substantial presence of Fortune 500 companies and government agencies that manage extensive legacy systems. This region’s leadership can be attributed to a history of early technology adoption and stringent compliance requirements, particularly in the finance and healthcare industries, and a persistent demand for robust and scalable IT infrastructures. These elements contribute to aggressive digital transformation initiatives focusing on enhancing operational resilience and agility.

Breakdown of primary interviews

The study contains insights from various industry experts, from solution vendors to Tier 1 companies. The break-up of the primary interviews is as follows:

• By Company Type: Tier 1 – 35%, Tier 2 – 40%, and Tier 3 – 25%
• By Designation: C-level - 25% , Directors –35%, and Others – 40%
• By Region: North America – 35%, Europe – 35%, Asia Pacific – 20%, Rest of the World – 10%

The major players in the mainframe modernization market are IBM (US), TCS (India), Capgemini (France), Atos (France), AWS (US), Micro Focus (UK), BMC Software (US), Infosys (India), Wipro (India), HCL Tech (India), DXC Technology (US), Kyndryl (US), Rocket Software (US), Fujitsu (Japan), Cognizant (US), Tech Mahindra (India), Broadcom (US), and TmaxSoft (US). These players have adopted various growth strategies, such as partnerships, agreements & collaborations, new product launches, product enhancements, and acquisitions, to expand their footprint in the mainframe modernization market.

Research Coverage

The market study covers the mainframe modernization market size across different segments. It aims to estimate the market size and the growth potential across different segments, including offering (software and modernization services), organization size (large enterprises and SMEs), verticals (BFSI, IT & ITES, healthcare, media & entertainment, retail & ecommerce, education, manufacturing, government, telecom, and other verticals), and regions. The study includes an in-depth competitive analysis of the leading market players, their company profiles, key observations related to product and business offerings, recent developments, and market strategies.

Key Benefits of Buying the Report

The report will help market leaders and new entrants with information on the closest approximations of the global mainframe modernization market's revenue numbers and subsegments. It will also help stakeholders understand the competitive landscape and gain more insights to position their businesses better and plan suitable go-to-market strategies. Moreover, the report will provide insights for stakeholders to understand the market’s pulse and provide them with information on key market drivers, restraints, challenges, and opportunities.

The report provides insights into the following pointers:

• Analysis of key drivers (workforce retirement and legacy skills shortage, increasing regulatory and compliance requirements, rapid adoption of AI and cloud for mission-critical workloads), restraints (complexity and risk of migrating legacy codebases, persistent high costs and budget constraints for large-scale transformations, insufficient documentation of legacy systems), opportunities (emerging SME adoption and mid-market demand, accelerated banking and fintech modernization in Asia Pacific, growth of AI-enabled and modular modernization solutions) and challenges (ensuring uninterrupted business operations during migration, overcoming resistance to organizational change, shortage of skilled modernization and integration talent) influencing the growth of the mainframe modernization market.

Product Development/Innovation: Detailed insights on upcoming technologies, research & development activities, and new product & service launches in the mainframe modernization market

Market Development: Comprehensive information about lucrative markets – analysis of mainframe modernization market across various regions

Market Diversification: Exhaustive information about new products & services, untapped geographies, recent developments, and investments in the mainframe modernization market

Competitive Assessment: In-depth assessment of market shares, growth strategies, and service offerings of leading players IBM (US), TCS (India), Capgemini (France), Atos (France), AWS (US), Micro Focus (UK), BMC Software (US), Infosys (India), Wipro (India), HCL Tech (India), DXC Technology (US), Kyndryl (US), Rocket Software (US), Fujitsu (Japan), Cognizant (US), Tech Mahindra (India), Broadcom (US), and TmaxSoft (US) Show more