Mainframe Modernization Market Projected to Hit USD 12.77 Billion by 2032, Driven by Growing Need for IT Agility, Scalability, and Cost Efficiency | SNS Insider

The increased need for improved IT agility, scalability, and cost efficiency is driving the mainframe modernization market. In order to facilitate digital transformation, cloud adoption, and real-time data processing, organizations are moving away from traditional mainframes and toward more contemporary platforms.

Austin, Oct. 06, 2025 (GLOBE NEWSWIRE) — The global Mainframe Modernization Market was valued at USD 6.26 billion in 2024 and is expected to reach USD 12.77 billion by 2032, growing at a CAGR of 9.39% during 2025-2032.

One of the main drivers behind businesses’ modernization of mainframes is the growing need for scalable and economical IT infrastructure. Conventional systems lack the adaptability needed for expanding digital workloads and are costly to operate. Cloud platforms and hybrid models, which provide lower operating costs, increased agility, and quicker deployment, are attracting the attention of organizations. Businesses can encourage innovation, improve consumer experiences, and maximize resources thanks to this shift. Businesses are under pressure to guarantee scalability and real-time data processing, which outdated mainframes are unable to provide effectively. In order to balance cost, performance, and competitive advantage, upgrading thus becomes a strategic priority.

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Key Players:

• IBM
• TCS
• Capgemini
• Atos
• AWS
• Micro Focus
• BMC Software
• Infosys
• Wipro
• HCL Tech
• DXC Technology
• Kyndryl
• Rocket Software
• Fujitsu
• Cognizant
• Tech Mahindra
• Broadcom
• TmaxSoft
• PalmDigitalz
• TSRI

Mainframe Modernization Market Report Scope:

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Segmentation Analysis:

By Organization Size, Large Enterprises Dominated with 70% Share in 2024; Small and Medium-Sized Enterprises (SMEs) Segment is the Fastest-growing at a CAGR of 11.50%

Large enterprises held the largest share in 2024 due to their reliance on legacy systems for mission-critical operations across industries, such as banking, insurance, and government. Small and medium-sized enterprises are expected to grow rapidly over 2025-2032 as they increasingly adopt cost-effective modernization solutions to compete with larger players. 

By Offering, Software Dominated with 59% Market Share in 2024; Services is the Fastest-growing Segment at a CAGR of 10.64%

The software segment dominated in 2024 as enterprises prioritize modernization platforms offering migration, integration, and application reengineering capabilities. The services segment is projected to grow quickly over 2025-2032 as enterprises demand consulting, implementation, and managed services to minimize migration risks.

By Vertical, Banking, Financial Services, & Insurance (BFSI) Segment Dominated with 32% Share in 2024; Healthcare is the Fastest-Growing Segment at a CAGR of 12.09%

The banking, financial services, and insurance sector led the market in 2024 as it heavily relies on mainframes for core banking, transaction processing, and regulatory compliance. Healthcare is expected to witness rapid growth from 2025 to 2032 as providers modernize legacy systems to enhance patient data management, digital records, and telemedicine platforms. 

By Modernization Type, Rehosting Segment Dominated with 30% Share in 2024; Rearchitecting is the Fastest-Growing Segment at a CAGR of 11.15%

Rehosting dominated in 2024 as enterprises prefer cost-effective modernization approaches that migrate workloads to cloud or modern environments without major code changes. Rearchitecting is expected to expand significantly from 2025 to 2032 as enterprises increasingly focus on redesigning legacy applications for long-term flexibility and cloud-native integration. 

In 2024, North America Dominated the Market with a Share of 38%; Asia Pacific is Projected to Grow with the Fastest CAGR Over 2025-2032

North America dominated the market in 2024 with 38% share due to its strong base of large enterprises relying on legacy mainframes, particularly in banking, insurance, and government sectors. Asia Pacific is projected to grow fastest from 2025 to 2032 at 11.27% CAGR, driven by rapid digitalization, cloud adoption, and expanding IT investments across developing economies, such as India and China.  

Recent Developments:

• In 2025, IBM unveiled the IBM z17, integrating the Telum II processor and AI accelerators to deliver real-time AI inference, stronger cybersecurity, and hybrid-cloud scalability through z/OS 3.2, advancing mainframe modernization for enterprises. 
• In 2025, AWS published updated guidance on replatforming mainframe applications using a shared IBM Db2 for z/OS database, supporting incremental modernization, reduced disruption, and seamless integration of critical workloads into scalable AWS Cloud environments.

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Exclusive Sections of the Report (The USPs):

• PRICING & COST STRUCTURE ANALYSIS – helps you understand modernization cost dynamics across approaches, organization sizes, and regions, enabling effective budgeting and ROI forecasting.
• OPERATIONAL & PERFORMANCE METRICS – helps you evaluate modernization success through KPIs like project timelines, downtime reduction, performance gains, and maintenance cost savings.
• TECHNOLOGY & INTEGRATION METRICS – helps you uncover modernization patterns across cloud-native adoption, automation levels, API integration, and AI/ML-driven code optimization.
• REGULATORY & COMPLIANCE METRICS – helps you assess adherence to evolving data protection and security standards, audit frequency, and compliance-driven cost or timeline shifts.
• PROJECT & CLIENT SEGMENTATION METRICS – helps you analyze modernization distribution by industry, geography, and platform type to identify high-demand segments and emerging opportunities.

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