Application Management Services: Streamlining Application Modernization and Support with Agentic AI

June, 2025

Organizations are facing significant challenges in their application management journeys, including legacy systems, decentralized strategies, resistance to change, skills shortage, workflow automation, and integration barriers. To address these complexities, enterprises are increasingly collaborating with application management service providers to modernize legacy systems, integrate disparate systems, develop cloud-native applications, enhance performance monitoring, and facilitate change management. Additionally, they are integrating agentic AI solutions to accelerate legacy modernization, enhance DevOps efficiency, and optimize IT operations. Meanwhile, service providers are leveraging agentic AI for application portfolio assessment, modernization, deployment, and support services.

Both demand-side and supply-side trends are covered in our Application Management Services 2025 Market Insights™ and Application Management Services 2025 RadarView™, respectively. These reports present a comprehensive study of application management service providers and closely examine market leaders, innovators, disruptors, and challengers.

Avasant evaluated 34 service providers across three dimensions: practice maturity, partner ecosystem, and investments and innovation. Of the 34 providers, we recognized 25 that brought the most value to the market during the past 12 months.

The report recognizes service providers in four categories:

    • Leaders: Accenture, Capgemini, HCLTech, IBM, Infosys, TCS, and Wipro
    • Innovators: Atos, Cognizant, Deloitte, NTT DATA, Tech Mahindra, and Unisys
    • Disruptors: Genpact, Hexaware, Hitachi Digital Services, Kyndryl, Mphasis, Persistent Systems, and UST
    • Challengers: Datamatics, ITC Infotech, Jade Global, Neurealm, and Virtusa

Figure 1 below from the full report illustrates these categories:

“Rising complexity across application ecosystems is forcing enterprises to rethink traditional management models,” said Ruth Steinberg, principal at Avasant. “By unifying cloud-native architectures, AI-driven automation, and DevSecOps practices, organizations can eliminate technical debt and build resilient, future-ready operations.”

The reports provide several findings, including the following:

    • Telecom, media and entertainment, and manufacturing industries account for over 50% of application management services demand, driven by their need to modernize legacy systems, enable real-time service delivery, and support continuous digital operations.
    • Enterprises are leveraging application management services to modernize legacy systems, develop cloud-native applications, and optimize performance monitoring. They are increasingly adopting AI-driven automation and DevOps practices to enhance scalability, reduce operational costs, and improve system reliability.
    • Input-based pricing remains the preferred model in over 35% of application management engagements. The enterprise need for scope flexibility and transparency in resource consumption is prompting a shift toward more granular, consumption-driven pricing models that better align costs with actual service usage.
    • Service providers are leveraging agentic AI for application portfolio assessment, modernization, deployment, and support services. They offer agentic AI-driven tools and platforms for code analysis, automated refactoring, test automation, performance monitoring, anomaly detection, and self-healing capabilities.

“The complexity of present application landscapes demands a shift from reactive support to proactive, AI-driven management,” said Amarabati Sen, principal analyst at Avasant. “Enterprises are embedding agentic AI into DevOps and monitoring workflows to enhance agility, strengthen resilience, and accelerate continuous innovation at scale.”

The Application Management Services 2025 RadarView™ also features detailed profiles of 25 service providers, along with their solutions, offerings, and experience in assisting enterprises in their application management journeys.


This Research Byte is a brief overview of Avasant’s Application Management Services 2025 Market Insights™ and Application Management Services 2025 RadarView™(click for pricing).

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DISCLAIMER:

Avasant’s research and other publications are based on information from the best available sources and Avasant’s independent assessment and analysis at the time of publication. Avasant takes no responsibility and assumes no liability for any error/omission or the accuracy of information contained in its research publications. Avasant does not endorse any provider, product or service described in its RadarView™ publications or any other research publications that it makes available to its users, and does not advise users to select only those providers recognized in these publications. Avasant disclaims all warranties, expressed or implied, including any warranties of merchantability or fitness for a particular purpose. None of the graphics, descriptions, research, excerpts, samples or any other content provided in the report(s) or any of its research publications may be reprinted, reproduced, redistributed or used for any external commercial purpose without prior permission from Avasant, LLC. All rights are reserved by Avasant, LLC.

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