Straits Research published a report, “Global Mainframe Modernization Market Size & Outlook, 2026–2034”. According to the study, the global market size is valued at USD 8.23 billion in 2025 and is projected to reach USD 18.42 billion by 2034, registering a compound annual growth rate (CAGR) of 9.5%.

Market Dynamics

The mainframe modernization market is fueled by the increased need for digital transformation throughout enterprises dependent on legacy IT infrastructures. Firms are increasingly moving towards cloud-native architecture, containerized environments, and API-led integration for enhancing operational efficiency and minimizing the elevated maintenance expenses associated with conventional mainframes. The necessity to elevate application agility, harden cybersecurity, and handle real-time data processing is driving modernization efforts throughout key industries like BFSI, government, retail, and telecommunication.

Persistent government and regulatory urgency to modernize legacy infrastructure-particularly in financial services and public sector institutions-is serving as a strong growth catalyst. Also, companies are increasingly implementing automated code conversion tools, AI-powered refactoring, and hybrid cloud deployment patterns to reduce migration risks and downtime. Strategic investments in modernization services, vendor-promoted transformation frameworks, and mainframe-to-cloud managed services are unleashing revenue streams for technology vendors globally.

Market Highlights

• Segmental Leadership: The Refactoring approach holds the largest share (39.3%) in 2025, driven by modernization for agility and cloud readiness.
• Solution Outlook: Automated Code Conversion Tools are expected to record the fastest CAGR (11.0%) during the forecast period, owing to accelerated migration automation.
• Deployment Environment: The Hybrid Cloud segment leads the future growth trajectory with the highest projected CAGR (14.2%) as enterprises adopt staged migration models.
• Service Outlook: The Consulting segment leads with the highest revenue share (27.6% in 2025), driven by modernization assessments and ROI-based strategy development.
• End-Use Insights: The BFSI segment is projected to register strong growth (8.9% CAGR) as banks upgrade core systems for regulatory compliance and digital service delivery.
• Regional Insights: North America dominates with over 31.9% share in 2025, supported by enterprise cloud transformation programs and modernization of mission-critical core systems.