Application Modernization Services Market Trends

Growth Drivers

• Growing partnerships and collaboration among market players - The opportunities for businesses to enhance their digital innovation and business transformation while preserving enterprise control are driven by strategic alliances and cooperation between technology companies and providers of services.
  
  These partnerships allow for innovative solutions to be offered by service providers and expansion of their customer base. As of April 1, Fujitsu and AWS will work together to assess, migrate and modernize legacy mission-critical applications running on UNIX servers on mainframe computers to the cloud for deployment in the AAW Cloud.
• Government Initiatives and Regulatory Standards - Demand for application modernization services is driven by government initiatives to support digital transformation and compliance requirements in a number of industries.
  
  The need for technology to enhance services, increase efficiency, and ensure regulatory compliance is recognized by governments across the world.
  
  An adjustment to the Digital Europe Work Programmes of 2023 and 2024, amounting to more than USD 500 million in investment, was approved by the European Commission. As part of the EU's multiannual financial framework for the period 2021 to 2030, the Digital Europe Programme is a financial support instrument.

Challenges

• High implementation costs - Due to the significant financial investment required for modernization efforts, high implementation costs are a industry restraint for application modernization services market. In particular, for small and medium-sized companies, the cost of implementing modernization services may be significant, including the acquisition of new technologies, instruments, or expertise.
• Security concerns are set to hinder market growth in the upcoming period.
• Legacy complexities are to hamper the market expansion in the upcoming period.