Application Modernization Services Market Overview
Application Modernization Services Market Size was valued at USD 9.8 billion in 2023. The application modernization services market industry is projected to grow from USD 11.4 billion in 2024 to USD 38.7 billion by 2032, exhibiting a compound annual growth rate (CAGR) of 16.5% during the forecast period (2024 - 2032). A few of the market drivers accelerating the growth of the application modernization services market are the rise in the demand for improved software functionalities due to changes in the business landscape, the rise in the demand for flexibility and scalability provided by cloud computing, and the benefits of combining modern technologies with software systems.
Source: Secondary Research, Primary Research, MRFR Database, and Analyst Review
Application Modernization Services Market Trends
Analysis of post-pandemic demand for contemporary infrastructure to assure company continuity to propel market growth
The demand-supply chain has been disturbed by COVID-19, which has also sparked technology demands in other industries. For immediate business continuity, a constant technological upgrade for outdated apps and software has become essential as businesses adopt cutting-edge technologies and fully digitise due to the pandemic. Applications in healthcare must prepare for exponential expansion in the user population since, for example, telemedicine has seen a dramatic increase in users. This could then call for the historical infrastructure of healthcare apps to be rebuilt or re-platted. Similar to this, new GPS-powered modules will be needed by food delivery services and hotel firms so they can swiftly stop serving customers in pandemic-affected areas. As a result, the Application Modernization Services market will experience growth from 2022 to 2027 due to the modernization strategy adopted after COVID-19 to ensure business continuity. Thus, this factor is driving the market CAGR.
Additionally, Customers will be able to improve their digital innovation and business transformation through new partnerships and collaboration with enterprise control. In 2019, IBM received an industry-first, multi-tenant public cloud offering from ARCAD Software in collaboration with Skytap, a worldwide cloud provider. In 2021, Cloud4C and Cloud Hedge teamed up to provide organisations all over the world next-generation application modernization services. The services are intended to assist application and IT leaders in modernizing their environment of legacy applications, hardware elements, databases, platforms, and ecosystems constructed using outdated technology in order to generate business value. Similar to this, in 2021 Kyndryl and VMware formed a strategic alliance centred on app modernization and multi-cloud services. Rising partnerships will therefore give businesses the opportunity to improve their digital innovation and business transformation while maintaining enterprise control during the projection period. Additionally, throughout the forecast period of 2022–2027, application modernization services assist businesses in accelerating their digital transitions through the quick development and deployment of new, more secure apps.
However, the market for application modernization services is expanding as a result of new software functions that help with changing business regulations and business processes. businesses must continually or sporadically enhance their operational procedures. The need is also rising as a result of evolving consumer demands, technical improvements, and escalating market competition. Application modernization services are in high demand due to the need for businesses to be as agile as possible in order to thrive and grow in highly competitive business environments. This agility is achieved by implementing the newest technologies and creating and delivering cutting-edge applications. Thus, it is anticipated that this aspect will accelerate application modernization services market revenue globally.
Application Modernization Services Market Segment Insights
Application Modernization Services Vertical Insights
The application modernization services market segmentation has been segmented by vertical into Healthcare, IT, Telecommunications, Energy and utilities, Manufacturing and Consumer goods and retail. The telecommunication segment dominated the market growth in 2021 and is projected to be the faster-growing segment during the forecast period, 2022-2030. To support their companies, major telecom providers are requesting various cloud infrastructures, including containerization and micro-services. In order to evaluate the migration of apps to hybrid cloud, this is promoting the expansion of hybrid cloud infrastructure.
Application Modernization Services Deployment Mode Insights
The application modernization services market segmentation has been segmented by deployment mode into Hybrid cloud, Private cloud and Public cloud. The hybrid cloud segment dominated the market in 2021 and is projected to be the faster-growing segment during the forecast period, 2022-2030. To reduce the efficiency of legacy systems, hybrid clouds are useful. In many economies, the use of these application services is expanding. High demand is being driven by enhanced software features and a wide range of demand from diverse economies.
Figure 2: Application Modernization Services Market by Deployment Mode, 2021 & 2030 (USD Billion)
Source: Secondary Research, Primary Research, MRFR Database and Analyst Review
Application Modernization Services Application Insights
The application modernization services market data has been segmented by application into Post modernization, Application portfolio assignment, UI modernization, Cloud application mitigation, Application integration and Application re-platforming. The application re-platforming segment dominated the market in 2021 and is projected to be the faster-growing segment during the forecast period, 2022-2030 due to the segment's better networking speeds, flexibility, scalability, and faster application delivery. In order to interact with their legacy systems and fix issues, numerous small, medium, and large-scale businesses from all industry verticals are requesting application modernization services. The need for cloud migration services to move applications to cloud environments is also increasing.
Application Modernization Services Regional Insights
By region, the study provides the market insights into North America, Europe, Asia-Pacific, and the Rest of the World. North America application modernization services market accounted for USD 3.1 billion in 2021 and is expected to exhibit a 43.20% CAGR during the study period, The market for application modernization services in North America is being driven by rapidly evolving IT infrastructure, growing small and medium-sized businesses (SMEs), and emerging cybersecurity solutions. In order to cut costs for the business, new American IT supply manufacturers and distributors are replacing physical servers with virtualized environments.
Further, the major countries studied in the market report are: The U.S., Canada, Germany, France, the UK, Italy, Spain, China, Japan, India, Australia, South Korea, and Brazil.
Figure 3: APPLICATION MODERNIZATION SERVICES MARKET SHARE BY REGION 2021 (%)
Source: Secondary Research, Primary Research, MRFR Database and Analyst Review
Asia Pacific application modernization services market accounts for the fastest growing market share. The Asia-Pacific application modernization market is driven by rising population, significant technical advancements, and intensive technologies to meet the rising demand for software services in nations like Australia, China, Japan, and India. It is anticipated that several Asian countries would offer excellent chances to implement application modernization solutions. Further, the China application modernization services market held the largest market share, and the India application modernization services market was the fastest-growing market in the region.
Europe application modernization services market is expected to grow at a substantial CAGR from 2022 to 2030. Rapid advancements in associated technology and greater knowledge of the advantages of modernization services have a beneficial effect on regional market expansion. The market is also fueled by the several prominent businesses operating in this area. Moreover, UK application modernization services market held the largest market share, and the Germany application modernization services market was the fastest-growing market in this region
Application Modernization Services Key Market Players & Competitive Insights
Major market players are spending a lot on R&D to increase their product lines, which will help the application modernization services industry grow even more. Market participants are also taking various strategic initiatives to grow their worldwide footprint, including new product launches, contractual agreements, mergers and acquisitions, increased investments, market developments and collaboration with other organizations. Competitors in the industry must offer cost-effective items to expand and survive in an increasingly competitive and rising market industry.
One of the primary business strategies manufacturers adopt in the application modernization services industry to benefit clients and expand the sector is manufacturing locally to reduce operating costs. In recent years, application modernization services industry has provided medicine with some of the most significant benefits. The application modernization services market major player such as Wipro, Virtusa, IBM, Capgemini, Software, Aspire Systems, Oracle, DXC Technology, NTT Data, Accenture, HCL, Bell Integrator, Dell, Cognizant, Blu Age and Fujitsu.
An American multinational provider of consulting and IT services is Cognizant. Its main office is in Teaneck, New Jersey, in the US. In 1994, Dun & Bradstreet established it as an internal technology division. In 1996, it began providing services to outside clients. In February 2020, Cognizant collaborated with CECONY to update its legacy IT platform, technological infrastructure, and applications in order to increase operational effectiveness, provide better agility, and enhance the customer experience at its US locations in New York and the surrounding areas.
The Austin, Texas-based Oracle Corporation is a multinational American company that specialises in computer technology. According to sales and market capitalization, Oracle was the third-largest software firm in the world in 2020. The company sells enterprise software products like enterprise resource planning (ERP) software, human capital management (HCM) software, customer relationship management (CRM) software (also known as customer experience), enterprise performance management (EPM) software, and supply chain management (SCM) software, as well as database software and technology (especially under its own brands).
Key Companies in The Application Modernization Services Market Include
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Wipro
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Aspire Systems
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Virtusa
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IBM
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Capgemini
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Software
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Oracle
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DXC Technology
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NTT Data
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Accenture
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HCL
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Bell Integrator
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Dell
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Cognizant
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Blu Age
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Fujitsu
Application Modernization Services Industry Developments
March 2021: To provide organisations all over the world with services for next-generation application modernization, Cloud4C teamed up with Cloud Hedge. The services are intended to assist application and IT leaders in modernizing their ecosystem of legacy applications, hardware components, databases, platforms, and other old-technology-built ecosystems, which will lead to the development of business value.
December 2019: To develop core solution portfolios for the company digital transformation, Atos purchased Maven Wave. Utilizing Maven Wave's expertise in cutting-edge technologies will help Atos expand its application modernization offering.
Application Modernization Services Market Segmentation
Application Modernization Services Vertical Outlook (USD Billion, 2018-2030)
Application Modernization Services Deployment Type Outlook (USD Billion, 2018-2030)
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Hybrid Cloud
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Private Cloud
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Public Cloud
Application Modernization Services Application Outlook (USD Billion, 2018-2030)
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Post Modernization
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Application Portfolio Assignment
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UI Modernization
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Cloud Application Mitigation
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Application Integration
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Application Re-platforming
Application Modernization Services Regional Outlook (USD Billion, 2018-2030)
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North America
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Europe
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Germany
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France
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UK
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Italy
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Spain
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Rest of Europe
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Asia-Pacific
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China
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Japan
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India
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Australia
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South Korea
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Australia
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Rest of Asia-Pacific
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Rest of the World
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Middle East
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Africa
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Latin America
Application Modernization Services Market Highlights:
