Rising demand for resilience and availability, coupled with the shift to hybrid and multicloud strategies and a focus on business-driven outcomes, is pushing enterprises to modernize applications gradually. The growing need for data integration, insights, and enhanced compliance and security also drives this effort. Organizations are increasingly experimenting with generative AI as part of their application modernization efforts. Meanwhile, leading service providers have integrated generative AI capabilities into their existing solutions to speed up the transformation process and deliver greater value.
Both demand-side and supply-side trends are covered in our Application Modernization Services 2024 Market Insights™ and Application Modernization Services 2024 RadarView™, respectively. These reports present a comprehensive study of application modernization service providers and closely examine market leaders, innovators, disruptors, and challengers.
Avasant evaluated 35 service providers across three dimensions: practice maturity, partner ecosystem, and investments and innovation. Of the 35 providers, we recognized 23 that brought the most value to the market during the past 12 months.
The report recognizes service providers in four categories:
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- Leaders: Accenture, Capgemini, HCLTech, IBM, Infosys, TCS, Tech Mahindra, and Wipro
- Innovators: Cognizant, Deloitte, Persistent Systems, and Unisys
- Disruptors: Eviden, Hexaware, Hitachi Digital Services, Kyndryl, Mphasis, NTT DATA, and UST
- Challengers: Datamatics, GAVS Technologies, Jade Global, and Virtusa
Figure 1 below from the full report illustrates these categories:
“Firms are becoming more aware of the operational risks posed by legacy systems,” said Robert Devers, Avasant principal. “Growing consumer demands and an evolving regulatory environment are contributing to future complexities, necessitating comprehensive modernization strategies such as the 6Rs approach.”
The reports provide several findings, including the following:
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- Banking, healthcare and life sciences, and telecom lead the industry pack, accounting for around 40% of service provider revenue from application modernization services.
- Around 80% of the challenges in implementing application modernization services are attributed to legacy infrastructure.
- Generative AI is being primarily applied across legacy code conversion, test case generation, and the transition from monolithic to microservices architecture.
- With a renewed focus on sustainability, businesses are leveraging energy-efficient coding and green software design principles to minimize computations, reduce energy use, and address environmental impact.
“Enterprises are showing greater interest in leveraging Gen AI to modernize, scale operations, and improve customer experiences,” said Avasant Research Director Gaurav Dewan. “However, a cautious, use case-driven approach is essential for organizations.”
The RadarView also features detailed profiles of 23 service providers, along with their solutions, offerings, and experience in assisting enterprises in their application modernization journeys.
This Research Byte is a brief overview of Avasant’s Application Modernization Services 2024 Market Insights™ and Application Modernization Services 2024 RadarView™. (click for pricing).