China Application Modernization Services Market Research Report By Vertical (Healthcare, IT, Telecommunications, Energy and utilities, Manufacturing, Consumer goods and retail), By Deployment Type (Hybrid cloud, Private cloud, Public cloud) and By Application (Post modernization, Application portfolio assignment, UI modernization, Cloud application mitigation, Application integration, Application re-platforming)- Forecast to 2035

China Application Modernization Services Market Overview

As per MRFR analysis, the China Application Modernization Services Market Size was estimated at 0.73 (USD Billion) in 2023.The China Application Modernization Services Market Industry is expected to grow from 1.14(USD Billion) in 2024 to 9.51 (USD Billion) by 2035. The China Application Modernization Services Market CAGR (growth rate) is expected to be around 21.25% during the forecast period (2025 - 2035).

Key China Application Modernization Services Market Trends Highlighted

A strong push for digital transformation among Chinese businesses is causing notable changes in the China Application Modernizing Services Market. The need for modernization services has been driven faster by government support of increasing technological use in several sectors. Emphasizing agility and scalability to improve their operational effectiveness, companies are moving from traditional systems to cloud-native apps. Moreover, driven by the need for smarter business solutions able to forecast market changes, the trend of incorporating artificial intelligence and machine learning into application services is on the increase.

As China keeps adopting big data analytics and the Internet of Things (IoT), chances of application modernization are growing. Companies want to use data-driven insights to enhance consumer experiences and guide choices. This change offers a rich scene for service providers to provide improved models for efficiently maintaining and updating apps. The modernization trend has been further driven in recent times by the effort from both national policy and municipal governments to increase infrastructure capability. The growing tendency of remote working has also underlined the necessity of more flexible, easily available software.

Demand for contemporary uses that can scale as these companies expand is further driven by the developing start-up scene in locations like Beijing and Shenzhen. Therefore, the junction of technical developments with government assistance offers a rich environment for the expansion of application modernization services in China, therefore generating many possibilities for service providers.

Source: Primary Research, Secondary Research, MRFR Database and Analyst Review

China Application Modernization Services Market Drivers

Digital Transformation Initiatives

China's government has been actively promoting digital transformation across all sectors as part of its 14th Five-Year Plan, which emphasizes the importance of adopting advanced technologies to drive economic growth. According to the Ministry of Industry and Information Technology, the increase in digitalization efforts is expected to boost the deployment of cloud services and modernization applications, with the objective to achieve a digital economy value of 60 trillion yuan by 2025.

This focus on digital transformation is creating a strong demand for Application Modernization Services, as enterprises seek to upgrade their legacy systems and integrate new technologies. Major companies like Alibaba and Tencent are leading the charge, investing heavily in cloud infrastructure and modern applications, further spearheading this trend. The China Application Modernization Services Market Industry is thus likely to see significant growth fueled by governmental support and corporate initiatives in the coming years.

Rising Demand for Cloud Computing

The rapid adoption of cloud computing services in China is a significant driver for the China Application Modernization Services Market Industry. According to the China Academy of Information and Communications Technology, the cloud computing market in China is expected to reach 1 trillion yuan by 2025, reflecting a compound annual growth rate of 25%. 

Major cloud service providers such as Huawei and Baidu are expanding their offerings, encouraging businesses to modernize their applications for efficient cloud integration.This increasing demand for cloud solutions is driving enterprises to adopt modernization services to enhance operational efficiency and competitiveness.

Increased Focus on Cybersecurity

With the rise of cyber threats and data breaches in China, organizations are prioritizing cybersecurity measures, which is boosting the demand for Application Modernization Services. The Ministry of Public Security reported that the number of cyber incidents in China increased by 20% in the last year, prompting companies to update their applications and infrastructure to ensure better security. 

Enterprises are recognizing the need to not only modernize their applications but also enhance their security postures.As a result, companies are investing in modernization services that include updated security features, thus shaping the growth of the China Application Modernization Services Market Industry.

Increased Investment in Research and Development

China's commitment to innovation is reflected in its escalating investment in Research and Development (R&D). As per the National Bureau of Statistics, China's R&D expenditure reached approximately 2.4 trillion yuan in 2021, representing an increase of 10% year-on-year. This growing investment in R&D is driving technological advancements and increasing the need for Application Modernization Services. 

Corporations such as Huawei and Xiaomi are at the forefront of this commitment, leveraging modern application solutions to enhance their product offerings and optimize their operations.This trend contributes to the overall growth of the China Application Modernization Services Market Industry as businesses look to stay competitive in an increasingly tech-driven landscape.

China Application Modernization Services Market Segment Insights

Application Modernization Services Market Vertical Insights

The China Application Modernization Services Market has evolved significantly with its Vertical segment encompassing various critical industries that are pivotal for the nation’s economic growth. Notably, the healthcare sector has gained momentum, facilitated by the increasing adoption of digital health technologies and a pressing demand for enhanced patient care systems, signifying its importance in modernizing healthcare delivery. On the other hand, the IT sector serves as a cornerstone for driving digital transformation, propelling innovation and productivity across diverse domains.

Telecommunications has also experienced remarkable advancements, driven by the need for robust infrastructure to support the burgeoning demand for data and connectivity, thereby enhancing communication capabilities nationwide. With the Energy and utilities sector focusing on sustainability and the modernization of grid systems, it has emerged as a significant area for investment and efficiency improvements. Manufacturing, a key pillar of the Chinese economy, is witnessing a shift towards automation and smart manufacturing, lean principles, and advanced technologies to optimize productivity and reduce costs.

Additionally, the Consumer goods and retail sector is adapting to changing consumer behavior and preferences, with modernization efforts aimed at enhancing the overall shopping experience through digital engagement and data-driven insights. Each of these domains in the Vertical segment plays a crucial role in driving the overall market growth, characterized by a focus on innovation, agility, and efficiency, thus positioning the China Application Modernization Services Market as a vital contributor to the digital transformation landscape in the region.

As organizations across these sectors recognize the importance of leveraging modernized applications, the market is expected to flourish, providing ample opportunities to cater to the increasing demands for technological integration and operational enhancements. Overall, the symbiotic relationship between these verticals and the application modernization services is reshaping the industry dynamics in China, poised for substantial growth and transformation in the coming years.

Source: Primary Research, Secondary Research, MRFR Database and Analyst Review

Application Modernization Services Market Deployment Type Insights

The Deployment Type segment of the China Application Modernization Services Market showcases the growing preference among organizations for enhancing their IT infrastructure to drive operational efficiency. Hybrid cloud solutions are gaining traction as they combine the advantages of both public and private clouds, allowing businesses to maintain control over sensitive data while taking advantage of scalable resources. As organizations in China continue their digital transformation journeys, private cloud solutions are favored for their enhanced security and customization capabilities, making them ideal for industries with stringent regulatory requirements.

Public cloud options, on the other hand, are acknowledged for their cost-effectiveness and agility, making them suitable for startups and smaller enterprises looking to optimize budgets while benefiting from a broad range of services. This segmentation reflects a growing trend towards flexible deployment strategies that meet specific organizational needs, driving the overall market growth in China as it adapts to the evolving technological landscape and responds to the challenges and opportunities presented by digital modernization efforts. The adaptability and scalability brought forth by these deployment types reiterate their significance in fostering innovation across various sectors in the region.

Application Modernization Services Market Application Insights

The China Application Modernization Services Market is experiencing significant growth, supported by a robust demand to enhance operational efficiency and innovation across industries. The market segmentation, particularly within the Application category, includes various critical components such as Post modernization, Application portfolio assignment, and UI modernization. Post modernization plays a vital role in ensuring that applications remain relevant and efficient after initial upgrades, while Application portfolio assignment helps organizations streamline their application landscape for better resource allocation and management.

UI modernization enhances user experience, making applications more intuitive and user-friendly, which is crucial in today's digital-first world. Cloud application mitigation is increasingly important as businesses migrate to cloud environments, necessitating effective strategies for legacy systems to operate seamlessly with new cloud-based applications. Application integration remains key for organizations looking to unify disparate systems, enabling better data flow and collaboration. Moreover, Application re-platforming is essential in adapting existing applications for modern environments and leveraging new technologies, thereby driving business agility.Collectively, these components reflect the market's evolution in China, addressing the ongoing need for digital transformation, agility, and competitiveness in an ever-changing business landscape.

China Application Modernization Services Market Key Players and Competitive Insights

The China Application Modernization Services Market is characterized by a dynamic landscape where businesses increasingly seek to modernize their IT infrastructure and applications to stay competitive in a fast-evolving technological environment. This market has seen a proliferation of service providers catering to diverse needs such as legacy system migration, cloud integration, and application development. Companies in this space are focused on delivering solutions that enhance operational efficiency, drive innovation, and improve customer experiences. Competitive strategies typically involve leveraging advanced technologies, fostering partnerships, and understanding the unique demands of Chinese enterprises to gain a foothold in this rapidly growing domain.

Alibaba Group plays a significant role in the China Application Modernization Services Market, leveraging its extensive cloud computing ecosystem to offer a plethora of services aimed at facilitating application modernization. With a robust suite of cloud-based services, including application development platforms, data analytics, and integration tools, Alibaba Group empowers businesses to enhance their operational capabilities. 

The company's strengths lie in its vast resources and infrastructure, which allow for scalable solutions tailored to meet the needs of different industries. Alibaba's commitment to innovation is evident in its continuous investments in research and development, as well as strategic mergers and acquisitions to enhance its service offerings. The company has effectively positioned itself as a key player in the market, utilizing its strong brand presence and technology expertise to cater to the diverse demands of organizations in China.

Key Companies in the China Application Modernization Services Market Include:

• Alibaba Group


• Kingdee International Software Group


• Inspur Electronic Information Industry


• Tencent Holdings


• Neusoft Corporation


• Digiwin Software


• Baidu


• Yonyou Network Technology


• iSoftStone Holdings Ltd.


• Pactera Technology International Ltd.


• Huawei Technologies

China Application Modernization Services Market Industry Developments

Recent developments in the China Application Modernization Services Market indicate a growing trend in digital transformation as enterprises increasingly adopt cloud computing and agile methodologies. In August 2023, Tencent Holdings launched a new application modernization platform aimed at helping businesses streamline digital processes. 

Similarly, Alibaba Group is expanding its offerings in application modernization services, investing heavily in Research and Development to enhance cloud capabilities. Over the last couple of years, China's government has also emphasized digital economy initiatives, which further accelerates the demand for application modernization services, leading to market valuation growth among companies like Huawei Technologies and Digiwin Software. The focus on modernization not only improves operational efficiency but also aligns with national goals to strengthen technological capabilities.

China Application Modernization Services Market Segmentation Insights

Application Modernization Services Market Vertical Outlook

• Healthcare


• IT


• Telecommunications


• Energy and utilities


• Manufacturing


• Consumer goods and retail

Application Modernization Services Market Deployment Type Outlook

• Hybrid cloud


• Private cloud


• Public cloud

Application Modernization Services Market Application Outlook

• Post modernization


• Application portfolio assignment


• UI modernization


• Cloud application mitigation


• Application integration


• Application re-platforming

 

Report Attribute/Metric Source:	Details
MARKET SIZE 2023	0.73(USD Billion)
MARKET SIZE 2024	1.14(USD Billion)
MARKET SIZE 2035	9.51(USD Billion)
COMPOUND ANNUAL GROWTH RATE (CAGR)	21.25% (2025 - 2035)
REPORT COVERAGE	Revenue Forecast, Competitive Landscape, Growth Factors, and Trends
BASE YEAR	2024
MARKET FORECAST PERIOD	2025 - 2035
HISTORICAL DATA	2019 - 2024
MARKET FORECAST UNITS	USD Billion
KEY COMPANIES PROFILED	Sangfor Technologies, Alibaba Group, Kingdee International Software Group, Inspur Electronic Information Industry, China Mobile, Tencent Holdings, Neusoft Corporation, Digiwin Software, Baidu, China Telecom, Yonyou Network Technology, iSoftStone Holdings Ltd., Pactera Technology International Ltd., ZTE Corporation, Huawei Technologies
SEGMENTS COVERED	Vertical, Deployment Type, Application
KEY MARKET OPPORTUNITIES	Cloud-native application development, Legacy system integration, Growth in SaaS adoption, Enhanced data analytics solutions, Increased demand for DevOps practices
KEY MARKET DYNAMICS	digital transformation initiatives, increasing cloud adoption, legacy system challenges, demand for agility and innovation, competitive technology landscape
COUNTRIES COVERED	China