DELRAY BEACH, Fla., Oct. 29, 2025 /PRNewswire/ — According to MarketsandMarkets™, the Application Modernization Services Market is estimated to be worth USD 22.67 billion in 2025 and is projected to reach USD 51.45 billion by 2031, growing at a compound annual growth rate (CAGR) of 14.6%.
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Application Modernization Services Market Size, Share and Growth
- Market Size Available for Years: 2018–2031
- 2025 Market Size: USD 22.67 billion
- 2031 Projected Market Size: USD 51.45 billion
- CAGR (2025–2031): 14.6%
- Segments covered: By Service Type, Application Type, Vertical, and Region
- Region Highlight: Asia Pacific region is witnessing robust growth.
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The Application Modernization Services Market refers to the services designed to transform legacy applications into newer, more agile platforms that are better aligned with current and emerging business needs. It includes application portfolio assessment, cloud application migration, application re-platforming, UI/UX modernization, post-modernization, and application integration services used to transform legacy systems. These services are of prime importance to companies seeking to be competitive, as they enable them to implement more advanced digital tools and processes that drive operational efficiency and innovation. Additionally, with cloud-native architectures and emerging technologies such as AI and ML, businesses can optimize performance and cost savings. The Application Modernization Services Market will therefore witness significant growth as organizations increasingly seek to upgrade their IT environments to align with the requirements of digital transformation initiatives, respond to evolving customer expectations, and enhance security and compliance in an ever-changing technological landscape.
Based on application type, cloud-hosted applications will hold the largest market size.
Cloud-hosted applications are expected to hold the largest market share in the Application Modernization Services Market during the forecast period, as cloud computing provides scalability, flexibility, and cost efficiency. Cloud helps businesses in modernizing their existing applications without making huge investments in new hardware. It enables transformation through modern technology stacks, such as AI and analytics, to improve application performance and build new, intelligent applications. Furthermore, the need for cloud-based infrastructure has grown in tandem with the increasing remote work culture and digitalization, allowing data and applications to be accessed from any device. Cloud provides multiple additional advantages over an on-premises deployment model, including security, backup, and disaster recovery.
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By service type, the cloud application migration segment is expected to register the highest growth rate during the forecast period.
In the modernization services market for cloud applications, migration is projected to grow at the fastest pace during the forecast period, owing to its essential contribution to transforming IT structures and enhancing operational efficiencies. Companies are moving away from traditional on-premise systems to the cloud to capitalize on the scalability, flexibility, and cost-effective solutions that come with cloud-based solutions. Factors such as growing data volumes, the rising need for robust infrastructure, and the need for flexible deployments are responsible for driving the shift from on-premise or legacy systems to cloud-based environments. Additionally, the end of support for legacy systems, such as SAP Business Suite and ECC6, is further prompting enterprises to accelerate their cloud migration initiatives in order to avoid disruptions and remain competitive in the market. Furthermore, the widespread adoption of hybrid and multi-cloud strategies is fueling the growth of cloud application migration services. It can be argued that, as companies continually seek ways to optimize workloads and integrate modern technologies into their systems, the importance of cloud application services is likely to grow in the landscape of application modernization services.
By vertical, the telecom segment is expected to hold the largest market share.
The telecom segment is expected to account for the largest share of the Application Modernization Services Market, and its share is projected to remain high during the forecast period, driven by the sector’s ongoing digitalization and adoption of 5G networks. Digital Technologies have gradually become imperative for every telecom provider, and yet, with so many changes, the conquest of legacy systems occurs naturally. Application modernization services help telecom operators extend the life of their current applications, adopt new technologies, and increase the overall efficiency of their operations. It is imperative to adopt an IT infrastructure that is strong and flexible in order to enhance and support technological advancements such as 5G, cloud computing, and the IoT, among other things. Furthermore, due to the rapidly increasing demand for high-speed connectivity and advanced communication solutions, telecom vendors are investing heavily in modernizing their IT landscapes, optimizing network performance, and streamlining operations. In addition, telecom service providers are also focusing on these services as a means of enhancing customer satisfaction, improving the network, and competing effectively in the market, thus consolidating their position within the industry. Owing to these factors, the telecom sector is expected to witness the highest growth during the forecasted period.
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Top Key Companies in Application Modernization Services Market
The major companies covered in the Application Modernization Services Market are Oracle (US), IBM (US), Microsoft (US), AWS (US), HCL Technologies (India), Accenture (Ireland), ATOS SE (France), Capgemini (France), Cognizant (US), Tata Consultancy Services (India), Aspire Systems (India), NTT Data Group Corporation (Japan), Infosys (India), Dell Technologies (US), Innova Solutions (US), EPAM Systems (US), DXC Technology (US), MongoDB (US), LTIMindtree (India), Wipro (India), Rocket Software (US), Fujitsu (Japan), Hexaware Technologies (India), Virtusa (US), Softura (US), CloudHedge (US), D3V Technology (US), Bayshore Intelligence (US), Opinov8 (UK), Icreon (US), Symphony Solutions (Netherlands), Cleveroad (Ukraine), Soft Suave (India), TechAhead (US), Geomotiv (US), PalmDigitalz (India), AveriSource (US), ScienceSoft (US), Simform (US), Utthunga (India), Rishabh Software (India), and Veritis (US). These players have adopted various growth strategies, including partnerships, agreements, collaborations, product launches, enhancements, and acquisitions, to expand their footprint in the Application Modernization Services Market.
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