Middle East & Africa Mainframe Modernization Services Market Size and Forecast (2021 - 2031), Regional Share, Trend, and Growth Opportunity Analysis Report Coverage: By Services (Application Modernization, Cloud Migration, and Data Modernization), Enterpr

The Middle East and Africa (MEA) mainframe modernization services market is projected to grow significantly, reaching approximately US$ 4,259.66 million by 2031, up from US$ 2,023.55 million in 2023. This growth represents a compound annual growth rate (CAGR) of 9.8% from 2023 to 2031, highlighting the increasing importance of digital transformation in the region.

Executive Summary

Digital transformation has become a pivotal objective for many countries in the Middle East, as governments recognize the necessity of embracing digital technologies to foster economic diversification and sustainability. Several Gulf Cooperation Council (GCC) nations, including Bahrain, Saudi Arabia, and the UAE, are actively pursuing ambitious initiatives aimed at reducing their reliance on oil and gas. These governments are investing heavily in digital transformation, which is crucial for modernizing their economies and enhancing public services.

The healthcare sector in the region is experiencing substantial growth, with Saudi Arabia accounting for about 60% of the total healthcare expenditure among GCC countries. In 2023, Saudi Arabia allocated US$ 50.4 billion to healthcare and social development, representing nearly 17% of its national budget. Such significant investments are expected to drive the development of digital infrastructure within the healthcare industry, thereby increasing the demand for mainframe modernization services from 2023 to 2031. Furthermore, the Saudi government has plans to invest around US$ 65 billion in healthcare infrastructure by 2030, further propelling the need for modernization services.

Market Segmentation Analysis

The MEA mainframe modernization services market can be segmented based on services, enterprise size, and end-use industry.

1. Services: The market is divided into application modernization, cloud migration, and data modernization. In 2023, the application modernization segment held the largest market share, reflecting the critical need for organizations to update their legacy systems to meet current technological demands.
2. Enterprise Size: The market is categorized into large enterprises and small to medium-sized enterprises (SMEs). Large enterprises dominated the market in 2023, as they typically have more extensive IT infrastructures and greater resources to invest in modernization initiatives.
3. End-Use Industry: The market is segmented into various industries, including IT and telecom, banking, financial services, and insurance (BFSI), healthcare, manufacturing, retail, education, and others. The IT and telecom sector held the largest share in 2023, driven by the rapid pace of technological advancement and the need for efficient data management.

Market Outlook

Government agencies in the MEA region utilize mainframe systems for critical functions such as data processing and resource planning. These systems enable governments to implement advanced IT processes and facilitate smarter decision-making. As digital transformation progresses, there is an increasing demand for modernizing existing applications and integrating them into a diverse technological landscape that includes both cloud and mainframe systems.

The rise of data analytics has transformed how businesses operate, allowing them to derive valuable insights from the vast amounts of data generated. Modernized mainframes enhance data flow across various systems, enabling advanced analytics capabilities. Additionally, modernization supports secure data transfer between institutions, aligning with emerging regulatory requirements and the principles of open finance. Experts predict that the volume of data generated globally will continue to surge, with estimates suggesting it could reach 175 zettabytes by 2025. This explosion of data, driven by the growing number of remote workers and increased internet usage, is expected to create significant opportunities for mainframe modernization services in the coming years.

Country Insights
The MEA mainframe modernization services market includes key countries such as the UAE, Saudi Arabia, South Africa, and others in the region. The UAE held the largest market share in 2023, bolstered by substantial public sector investments that support the demand for ICT products and services across various sectors, including healthcare, aviation, defense, and financial services. The UAE is recognized as a major data center hub in the MEA region, with plans for further expansion and investments of up to US$ 1 billion expected by 2026. The data center market in the UAE is projected to grow at an average rate of approximately 3.43% from 2022 to 2027, driven by ongoing digitalization efforts and economic diversification initiatives.

Company Profiles

Key players in the MEA mainframe modernization services market include Accenture Plc, Capgemini SE, Infosys Ltd, Fujitsu Ltd, Cognizant Technology Solutions Corp, Microsoft Corp, Mphasis Ltd, and many others. These companies are employing various strategies such as expansion, product innovation, and mergers and acquisitions to enhance their offerings and increase their market presence.

In conclusion, the MEA mainframe modernization services market is poised for significant growth, driven by digital transformation initiatives, substantial investments in healthcare and technology, and the increasing demand for data analytics capabilities. Show more