Demystifying the Numbers: Understanding Application Modernization Statistics

Quick Overview: Discover key statistics on application modernization trends: Cloud and DevOps integration drives growth, with SMEs adopting services for scalability. The facts and research presented in the application modernization services market statistics aim to provide valuable data, insights, and benefits to stakeholders, vendors, and other industry participants.

With the rise of technology, where innovation has become as swift as the wind, there exists a realm where traditional or old meets the new in the form of transformation. And that’s called Modernization.

Imagine this – complex legacy systems and outdated software where businesses are on the verge of adopting advanced technological evolution. Well, you don’t have to worry about it anymore now.

In this digital world, application modernization emerges as the guiding beacon for organizations who want to upgrade their applications for better performance.

Step into a world where facts and data speak volumes, and numbers tell tales of resilience and adaptation. This article, Application Modernization Statistics, is not just a collection of statistics but also data and challenges faced by organizations planning to embrace the future.

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Join us on this interesting journey of facts, where every statistic is a stepping stone towards innovation, numbers come alive, and the future awaits.

Application Modernization Services Market Statistics

The driving growth of application modernization services is driven by increased adoption of cloud technology and integration with DevOps approach to enhance software functionalities. Moreover, increased government support in promoting the adoption of application modernization services acts as an additional catalyst for market growth within this sector.

• According to a recent survey, 87% of business leaders said modernization is essential to grow and succeed in a business.
• The application modernization services market globally has a projected value of $11.4 billion in 2024. It’s expected to reach $38.7 billion by 2032, growing at a CAGR of 16.5% from 2024 to 2032.
• Foundry’s State of The CIO Study 2024 reports that IT leaders expect to spend more time on transformational and modernization tasks, especially redesigning business processes (33%), driving business innovation (34%), modernizing infrastructure and applications (28%), and developing and refining business strategy (27%).
• Application modernization market is expected to increase at a CAGR of 16.8% from 2024 to 2030, from its estimated value of USD 15.3 billion in 2023 to USD 52.28 billion by 2030.

• Over the course of the forecast period, the application modernization services market is anticipated to develop at a Compound Annual Growth Rate (CAGR) of 16.7%, from USD 15.2 billion in 2022 to USD 32.8 billion by 2027.

• The market for application modernization services in Europe was estimated to be worth $2.14 billion in 2019 and is expected to increase at a compound annual growth rate (CAGR) of 15.1% from 2020 to 2027, reaching $6.60 billion.

• Nearly two-thirds of businesses (65%) stated that their digital transformation process is "in-progress." By comparison, 57% of respondents thought they were "at a similar place relative to their peers." 53% of respondents say they have a "system in place to coordinate cross-functional modernization activities," meaning they have digital projects that go beyond just one business division.
• Public cloud now hosts 38% of all workloads on average for enterprises, more than private cloud (35%) and on-premises data centers or colocation (27%). This division holds true for all business sizes and industry verticals.
• Merely 6% of respondents indicated that they were not upgrading any applications whatsoever. In contrast, according to 71% of the surveyed organizations, at least one out of every four apps are being modernized, and 24% are modernizing half or more of them. The importance of modernization is evident, with enterprise software such as CRM/ERP leading the way.
• 90% of those surveyed said that application’s value to their industry or business had increased during the previous five years. Application modernization helped grow their businesses in every manner.
• According to a recent survey, 92% of businesses claim to be actively working on at least one app modernization project by choosing the right strategy for their legacy applications. Four in five respondents (79%) in the survey also admitted they had experienced an app modernization failure.

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Application Modernization Tools Market Statistics

• According to Cognitive Market Research, the global application modernization tools market is expected to reach a value of USD 8951.2 million in 2023 and increase at a CAGR of 19.20% between 2023 and 2030.
• With a market size of USD 3580.48 billion in 2023 and projected to expand at a CAGR of 17.4% from 2023 to 2030, North America accounted for more than 40% of worldwide revenue.
• With a market size of USD 2685.36 billion in 2023 and projected to expand at a CAGR of 17.7% from 2023 to 2030, the Europe market accounts for more than 30% of worldwide revenue.
• At USD 2058.78 billion in 2023, Asia Pacific accounted for the fastest-growing market, with over 23% of worldwide sales. From 2023 to 2030, the market is expected to develop at a CAGR of 21.2%.
• With a market size of USD 447.56 billion in 2023 and projected to increase at a compound annual growth rate (CAGR) of 18.6% from 2023 to 2030, Latin America accounts for more than 5% of global sales.
• More than 2.00% of worldwide revenue comes from the Middle East and Africa market, which was reached USD 179.02 billion in 2023 and would rise at a compound annual growth rate (CAGR) of 18.9% through 2030.

Identifying and Avoiding Risks of Traditional App Modernization

Identifying and avoiding risks associated with traditional application modernization requires careful assessment of legacy systems, potential disruptions to business operations, and impactful strategies to minimize downtime and data loss.

Complicated and Time-Consuming: According to more than half (58%) of software and architectural leaders, the average app modernization effort takes 16 months per project. Over 25% of respondents believe these undertakings take two years or longer.

Expensive: Approximately 74% of respondents believe that the average cost of an application modernization project is $1.5 million.

Risky: It's not uncommon for app modernization projects to fail. In the poll, around 80% of respondents said they experienced at least one unsuccessful attempt at modernizing an app.

Application Modernization Services Market Analysis

In 2022, the application modernization services market size from the application integration sector was projected to reach $3.5 billion. Applications within an organization can share business processes and data thanks to application integration services.

Through additional investments, companies providing these services are growing their market share. For example, SaaS application integration company Unito Inc. announced in October 2022 that it intends to increase its market share following a $20 million investment round, bringing its total capital received to $32.9 million. The growing incorporation of cloud technology will influence growth in this area.

The SMEs segment in the application modernization services market is growing rapidly due to budget constraints and a need for efficiency. SMEs segment will reach over 10% CAGR through 2032. Setting up on-premises data storage infrastructure requires significant investments, which can be challenging for SMEs with limited resources.

In the IT & ITes segment, organizations are adopting cloud-based solutions to enhance security and scalability, driving the market towards USD 10 billion by 2032. Businesses are looking to build application modernization strategies and approaches as a result of the shift to the cloud for apps.

Application Modernization Services Market Share

Some leading companies involved in the application modernization services market are:

• Tech Mahindra Ltd
• Accenture
• IBM Corporation
• TATA Consultancy Services Limited
• Microsoft Corporation
• Infosys Limited
• Nutanix
• Oracle Corporation
• Deloitte
• Dell Inc
• Wipro
• Atos SE
• LTIMindtree Limited
• EPAM Solutions Hub
• HCL Technologies Limited
• Softura, Ernst & Young Global Limited
• Cognizant

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Global Application Modernization Services Market – By Region

According to IBM, over 70% of APAC organizations are projected to undergo digital transformation by 2030. These factors are expected to drive market share in the forecast period from 2021 to 2026.

The North America application modernization services market is projected to exceed USD 25 billion by 2032, boasting over 50% of the global market share in 2022. Growth is driven by the adoption of cloud-based platforms amidst rising digitalization and technological advancements. Government investments in AI and IoT services further enhance applications, while competition among major players dominates revenue generation.

The Asia Pacific region is poised for significant growth in the application modernization services market, fueled by expanding businesses and substantial government investments in IT infrastructure modernization.

Growing populations and significant technological advancements in countries such as Australia, China, Japan, and India are propelling the Asia-Pacific application modernization industry. These nations are adopting intensive technologies to meet the expanding demand for software services.

During the forecast period, SMEs exhibit the highest CAGR of 21.8%, driven by the widespread adoption of the lift-and-shift migration strategy, facilitating rapid scalability and growth.

In the application modernization services market, the BFSI sector demonstrates the highest CAGR of 22.5%, propelled by the pandemic, which has heightened the demand for digital transformation. An agile and scalable IT environment is imperative to meet evolving customer needs.

Application modernization services companies are fortifying their positions through mergers & acquisitions and sustained investment in research and development (R&D) activities. This strategy aims to devise solutions tailored to the evolving demands of customers.

US is Projected to Dominate with the Largest Market Size

Geographically, North America is segmented into US and Canada. With its state-of-the-art IT infrastructure and great technical expertise, the US leads the market share in the region for adopting application modernization.

Moreover, many organizations in America are implementing cloud-based services to make their businesses scalable, flexible, and cost-effective. In fact, companies like Accenture, ATOS, Capgemini, HCL, Cognizant, IBM, and TCS are the main reasons why their decision makers implement application modernization services for enhancement.

China is Projected to Dominate with the Largest Market Size in Asia Pacific

The Asia Pacific region is divided into some countries, including India, China, Japan, Australia, and the rest of Asia Pacific. Since the economic growth of China is increasing in the Asia-Pacific region, China has had a great impact on developing cloud infrastructure services.

Application Modernization Services Market Analysis – By End-User Industry

With the highest CAGR of 22.5%, the BFSI sector in the application modernization services market is growing. The pandemic has increased BFSI's need for digital transformation, with an agile and scalable IT environment required to fulfill their expanding customers’ demands.

Additionally, to transform into an entirely digitally native enterprise and generate new business value from legacy applications, many banking institutes are implementing legacy modernization with new business requirements.

Impact of AI in Application Modernization

As we know, AI has stepped into every sector to modernize business operations and functionalities. The report states that the AI market is expected to grow with a CAGR of 36.8% from 2023 to 2030.

More than 75% of organizations surveyed are leveraging AI to implement application modernization processes. 53% of organizations feel that using AI for app modernization has become very common. 42% are using AI for their legacy application modernization.

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Application Modernization Tools Market Analysis – By Product Segment

COBOL dominates in this category, according to Cognitive Market Research. The reason for this dominance is the widespread use of legacy COBOL-based systems across many industries, most notably major companies, government, and finance.

COBOL-specific application modernization tools are essential for updating and changing these antiquated systems to be compatible with newer technology.

PowerBuilder emerges as the fastest-growing category in the market. Being a popular development tool in the late 20th century has made PowerBuilder spurred its demand for application modernization.

Businesses, particularly those in the manufacturing and business sectors, still use PowerBuilder applications, which need to be updated to comply with modern technology standards.

Application Modernization Tools Market Share (%) by Product Type

• COBOL
• ADA
• RPG
• Assembler
• PowerBuilder
• Others

Application Modernization Tools Market Analysis – By Region

The entire segment is segregated into five major regions: North America, Europe, Asia Pacific, Middle East & Africa, and Latin America.

• North America (United States, Canada, Mexico)
• Europe (United Kingdom, France, Germany, Italy, Russia, Spain, Sweden, Denmark, Netherlands, Switzerland, Belgium)
• Asia-Pacific (China, Japan, Korea, India, Australia, Philippines, Singapore, Malaysia, Thailand, Indonesia, Rest of APAC)
• South America (Brazil, Argentina, Colombia, Peru, Chile, Rest of South America)
• Middle East and Africa (Saudi Arabia, Turkey, Nigeria, UAE, Egypt, South Africa, GCC Countries, Rest of MEA)

Top Companies Market Share in Application Modernization Tools Industry

• Asysco
• Micro Focus
• Mapador
• Fresche Legacy
• Raincode
• Metaware
• Semantic Designs
• Expersolve
• Anubex
• MOST Technologies

Stay On Top of What's Next in Technology with App ModernizationApp modernization statistics give you a clear and consistent picture – modernization means to survive and thrive. Businesses of every size and industry are embracing digital transformation by connecting with a app modernization partner and prioritizing ongoing application modernization. Those lagging behind have felt the impact on productivity, revenue, and competitiveness.In the coming years, application modernization will become essential for survival, not just a buzzword. Your organization must assess its position and implement a trustworthy modernization program to drive progress effectively.If you are planning to modernize your application, consider Radixweb as your trusted app modernization partner. Connect with our experts today.Want even more interesting technologies-related statistics and facts? Check out NodeJS Statistics, Agile Statistics, Front End Statistics and JavaScript Statistics from Radixweb’s Facts and Figures library.