GCC 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

GCC Application Modernization Services Market Overview

As per MRFR analysis, the GCC Application Modernization Services Market Size was estimated at 195.71 (USD Million) in 2023.The GCC Application Modernization Services Market Industry is expected to grow from 228(USD Million) in 2024 to 1,506 (USD Million) by 2035. The GCC Application Modernization Services Market CAGR (growth rate) is expected to be around 18.723% during the forecast period (2025 - 2035).

Key GCC Application Modernization Services Market Trends Highlighted

The GCC Application Modernization Services Market is experiencing significant growth driven by several key market drivers. The regional emphasis on digital transformation is evident as governments and private sectors in the GCC nations aim to enhance productivity and operational efficiencies. The Vision 2030 initiatives in countries like Saudi Arabia and the UAE's National Innovation Strategy underline a strategic push towards modernization and innovation, accelerating the demand for application modernization services. 

Moreover, the ongoing shift towards cloud computing and the increased adoption of hybrid IT infrastructure are transformative trends reshaping the market landscape in the GCC. Organizations in the region are exploring opportunities to leverage emerging technologies such as artificial intelligence, machine learning, and the Internet of Things. These technologies can be integrated into existing applications to improve functionality and drive business value. The increasing desire for enhanced user experiences and streamlined processes fosters investment in modernized applications that can better meet consumer demands. 

Additionally, the regulatory frameworks being established in GCC countries encourage digital upgrades within organizations, paving the way for the adoption of modernization services. Recent trends also indicate a shift towards agile development methodologies and DevOps practices as companies recognize the need for faster deployment and iterative improvements in their applications.

The rise of remote work and digital collaboration tools has further accelerated the urgency for organizations to modernize their legacy systems, ensuring higher resilience and scalability during evolving market conditions. As GCC countries continue to focus on economic diversification and technological advancement, the application modernization services market is expected to expand, reflecting the region's commitment to creating a robust digital economy.

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

GCC Application Modernization Services Market Drivers

Increasing Demand for Digital Transformation

The GCC Application Modernization Services Market Industry is witnessing a significant increase in demand for digital transformation. Recent government initiatives across the Gulf Cooperation Council (GCC) region, particularly in Saudi Arabia and the United Arab Emirates, emphasize a shift towards smart technologies and digital infrastructure. For instance, the Saudi Vision 2030 initiative aims to enhance the country's digital ecosystem by investing heavily in information technology and cloud computing solutions.

The commitment of the Saudi government to increase non-oil revenues by 50% by 2030 is expected to drive substantial investments in technology and modernization services, as businesses are urged to adapt to innovative processes. Organizations such as STC Group and Etisalat are pioneers in implementing these digital strategies, thereby driving the modernization of legacy applications. The burgeoning e-commerce sector in the GCC, projected to reach USD 28.5 billion by 2025, also accelerates the need for application modernization to enhance operational efficiency and customer experience.

Cloud Adoption and Integration

Another prominent driver for the GCC Application Modernization Services Market Industry is the rapid adoption and integration of cloud technologies. The cloud computing market in the GCC is projected to grow at a CAGR of 27.5% from 2021 to 2026, indicating a strong shift towards cloud-based solutions. 

Government initiatives such as the UAE's digital transformation strategy support the growth of cloud services by encouraging organizations to migrate to cloud platforms.Companies like Microsoft and Amazon Web Services have expanded their data center presence in the region, facilitating local businesses to leverage cloud capabilities. This trend underscores the increasing need for application modernization, as firms require updated technologies to seamlessly integrate and optimize their cloud ecosystems for operational efficiency.

Regulatory Compliance and Cybersecurity

In the GCC Application Modernization Services Market Industry, regulatory compliance and cybersecurity have emerged as critical drivers for market growth. With the rising importance of data protection laws across the GCC, including the Dubai Data Law and the Qatar Data Privacy Law, companies face increased pressure to modernize their applications to meet compliance requirements. 

This surge in compliance demands necessitates the updating of legacy systems, which often lack robust security measures.Organizations like the Central Bank of the UAE have enforced strict cybersecurity regulations, compelling businesses to adopt advanced technological frameworks. A report by the International Telecommunication Union suggests that cyberattacks in the GCC increased by 30% in the past year, emphasizing the necessity for modernized applications that are resilient to evolving threats. This focus on cybersecurity will significantly boost the demand for application modernization services.

GCC Application Modernization Services Market Segment Insights

Application Modernization Services Market Vertical Insights

The GCC Application Modernization Services Market showcases robust opportunities within the Vertical segment, encompassing diverse industries such as Healthcare, IT, Telecommunications, Energy and Utilities, Manufacturing, and Consumer Goods and Retail. Each industry in the GCC region is experiencing significant transformation driven by advancements in digital technologies and changing client expectations. For example, the Healthcare sector, which is rapidly adopting e-health services and telemedicine solutions, sees application modernization as pivotal for improving patient care and streamlining operations, especially in the wake of recent global health challenges.

Concurrently, the IT domain continues to grow substantially as organizations seek to enhance operational effectiveness and offer innovative services through modernized platforms. In the Telecommunications industry, ongoing investment in network capabilities and the integration of IoT (Internet of Things) technologies are key drivers requiring companies to modernize their applications for improved connectivity and customer engagement. The Energy and Utilities sector is increasingly focused on sustainability and efficiency; thus, modernizing applications facilitates better resource management and supports the integration of renewable energy sources.

In Manufacturing, the push towards Industry 4.0 is driving demand for smarter applications that can facilitate automation and data analytics for operational excellence. Lastly, the Consumer Goods and Retail segment is realizing considerable benefits from application modernization, as companies seek to enhance user experiences and streamline supply chain processes amid shifting consumer behaviors. Overall, the Vertical segment within the GCC Application Modernization Services Market represents a fertile ground for growth, underpinned by critical technological advances and evolving market dynamics across these key industries.As a result, businesses are poised to harness the benefits of modernized applications to drive competitive advantage and operational efficiency.

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

Application Modernization Services Market Deployment Type Insights

The GCC Application Modernization Services Market is increasingly shaped by the Deployment Type segment, which includes Hybrid cloud, Private cloud, and Public cloud options. As organizations across the GCC region progressively seek to enhance operational efficiency and business agility, the demand for these deployment models is on the rise. Hybrid cloud solutions are particularly significant, as they offer flexibility in orchestrating workloads between on-premises and cloud environments, providing organizations with tailored strategies that fit diverse needs.Furthermore, Private cloud services cater to businesses that require heightened security and compliance, especially in sectors heavily regulated within the GCC. 

On the other hand, Public cloud options are gaining traction among small and medium-sized enterprises seeking cost-effective solutions to scale their operations without the burden of managing their infrastructure. The growing digital transformation initiatives across the GCC, supported by government-led strategies aimed at diversifying economies and enhancing technological capabilities, are expected to drive further adoption of these deployment models.The market trends also highlight that organizations are increasingly looking for seamless integration and interoperability between various cloud environments, fueling innovations in Application Modernization Services.

Application Modernization Services Market Application Insights

The GCC Application Modernization Services Market has showcased robust trends driven by technological advancement and business transformation needs, particularly within the Application segment. Organizations in the GCC are shifting focus towards Post modernization strategies, which play a critical role in enhancing performance and extending the lifecycle of existing applications. Application portfolio assignment is gaining traction as businesses aim to optimize resource allocation and improve service delivery, ensuring better alignment with organizational goals.UI modernization stands out as a vital component, providing enhanced user experiences that are crucial for retaining a competitive edge in the rapidly evolving digital landscape. 

Cloud application mitigation is increasingly important as companies move to cloud infrastructures, emphasizing the need for seamless and secure integrations. Furthermore, Application integration remains a fundamental aspect to ensure interoperability among diverse platforms, enhancing efficiency. Similarly, Application re-platforming is significant for businesses to adapt their legacy systems to modern environments, promoting agility and responsiveness.This segment overall reflects a dynamic landscape shaped by innovation, increasing demand for efficiency, and the necessity for organizations to remain relevant in a tech-driven market.

GCC Application Modernization Services Market Key Players and Competitive Insights

The GCC Application Modernization Services Market has emerged as a pivotal segment within the technology landscape, driven by the increasing need for organizations to adapt to rapidly changing digital environments. In this region, a variety of factors are influencing the competitive dynamics, including the push for cloud adoption, the need for enhanced security measures, and the evolution of consumer expectations around user experience. Companies are increasingly focusing on updating legacy applications to leverage the benefits of new technologies such as artificial intelligence and machine learning, while also seeking to improve operational efficiency. 

This has led to a competitive arena filled with both established players and newcomers vying for market share, each offering distinct value propositions and capabilities tailored to the unique regional demands of the Gulf Cooperation Council.Cognizant holds a significant position within the GCC Application Modernization Services Market, leveraging its robust technological expertise and extensive industry experience. The company’s strong focus on digital transformation positions perfectly to assist organizations in the GCC region with their modernization efforts. By providing tailored solutions that encompass cloud services, application re-engineering, and data analytics, Cognizant has successfully established itself as a trusted partner for businesses looking to innovate while optimizing costs. 

Its strategic collaborations with local enterprises and its understanding of the GCC's regulatory landscape further strengthen its market presence, enabling Cognizant to offer relevant solutions that resonate with clients striving for agility and competitive advantage.SAP is another key player in the GCC Application Modernization Services Market, where it offers a comprehensive suite of products and services aimed at empowering organizations to embrace digital transformation. SAP's market presence is marked by its strong emphasis on enterprise resource planning and data management solutions that help businesses streamline operations and gain actionable insights. Its key offerings, including SAP S/4HANA, serve as conducive environments for application modernization, allowing organizations to transition legacy systems effectively. 

SAP has formed strategic alliances and partnerships within the region, further enhancing its reach and capabilities. Additionally, its focus on innovation through mergers and acquisitions allows it to integrate new technologies and solutions that cater specifically to the needs of GCC businesses, providing them with robust tools to navigate the complex digital landscape.

Key Companies in the GCC Application Modernization Services Market Include:

• Cognizant


• SAP


• Hewlett Packard Enterprise


• Capgemini


• Fujitsu


• Accenture


• Wipro


• Infosys


• Atos


• Tata Consultancy Services


• Microsoft


• Oracle


• IBM

GCC Application Modernization Services Market Industry Developments

The GCC Application Modernization Services Market has witnessed significant developments recently, particularly with heightened demand for cloud adoption and digital transformation among enterprises. Companies like Accenture and Fujitsu have expanded their service offerings, focusing on enhancing customer experiences through innovative application solutions. In terms of mergers and acquisitions, Tata Consultancy Services announced a strategic acquisition in January 2023 aimed at bolstering its application modernization capabilities, while SAP has been actively collaborating with various regional players to enhance its market position. 

Moreover, significant growth in market valuation has been noted, driven by increased investments in technology by governments, particularly in the United Arab Emirates and Saudi Arabia, which are prioritizing digital initiatives as part of their national visions. This growth trajectory is further supported by initiatives from IBM and Oracle, who are leveraging artificial intelligence and analytics to modernize applications across multiple sectors. 

Additionally, regulatory frameworks by the governments encouraging digital transformation have boosted the market landscape, leading to optimistic projections for the coming years. As a result, major players like Cognizant and Infosys are also expanding operations within the GCC region to capitalize on the evolving market dynamics.

GCC 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	195.71(USD Million)
MARKET SIZE 2024	228.0(USD Million)
MARKET SIZE 2035	1506.0(USD Million)
COMPOUND ANNUAL GROWTH RATE (CAGR)	18.723% (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 Million
KEY COMPANIES PROFILED	Cognizant, SAP, Hewlett Packard Enterprise, Capgemini, Fujitsu, Accenture, Wipro, Infosys, Nokia, Mavenir, Atos, Tata Consultancy Services, Microsoft, Oracle, IBM
SEGMENTS COVERED	Vertical, Deployment Type, Application
KEY MARKET OPPORTUNITIES	Cloud migration acceleration, Legacy system upgrades, Increased demand for agile solutions, Emphasis on cybersecurity compliance, Integration of AI technologies
KEY MARKET DYNAMICS	cloud migration adoption, legacy system integration, regulatory compliance requirements, demand for scalability, cost optimization initiatives
COUNTRIES COVERED	GCC