Application Transformation Market Size, Share & Trends Analysis Report By Type (Application Integration, UI Modernization), By Enterprise Size (Large Enterprises, Small & Medium Enterprises), By End-use, By Region, And Segment Forecasts, 2022 - 2030

Report Overview

The global application transformation market size was valued at USD 9.5 billion in 2021 and is expected to expand at a compound annual growth rate (CAGR) of 14.7% from 2022 to 2030. Rapidly increasing digitalization among industries, growing penetration of internet and mobile devices across the world and increase in consumption of big data are the primary factors fostering growth of market. In the digital transformation age, there is an increasing demand from enterprises to transform their business models and deliver business value in cost effective manner. The development of next generation industrial solutions will be cloud enhanced and require a platform to showcase their digital business capabilities.

With the help of application transformation, the enterprises will be able to accelerate digital transformation initiatives, enhance the developer experience, and automate deployments that will increase productivity. The transformation of applications requires changes across various organizational aspects such as design, process, culture, and technology. Moreover, it requires embracing and implementing DevOps across organization, a product-oriented mindset for innovation, and infusion of intelligent automation across application life cycle. Thus, with rise in digital transformation initiatives and growing dependence of enterprises on intelligent automation, the market is expected to witness significant growth over the forecast period.

Application transformation helps in costs savings and incorporating efficiency of the organization through automation and productivity enhancements. The use of intelligent automation and AI techniques will improve the way the applications are developed, tested, and maintained. Moreover, the pay per use or subscription-based model offered by the service providers has provided various enterprises the flexibility to grow to their optimum potential. Despite some minor challenges such as integration with other legacy systems and security concerns, the market is likely to maintain a high growth pace in coming years.

Privacy and data security remains the primary apprehension among organizations wherein use of information, transmission, and storage must be digitally protected. Industry reports suggest that around 60% of the information on hard drives is held in an unsecured manner. Data encryption, access control, integration, authorization management, communication security, and monitoring and auditing are the few of the important security services offered by the application transformation services vendors. Moreover, owing to the Covid-19 impact, temporary repercussions on the sales and supply chain is likely to be witnessed in the coming year. However, with the relaxation of restrictions, and resumption of industrial operations, the market is anticipated to witness a positive growth post 2022.

Type Insights

The application integration segment held the largest share of over 25.0% in 2021. The growth of the market can be attributed to the increasing need for integrating the outdated legacy applications and databases with new generation application. Integration enables quick and streamlined connectivity among applications that will enable seamless sharing of data, automate work flow, and increase the flexibility of IT infrastructure.
Moreover, integration produces a single point of access to the information that will help employees to spend less time searching for data. In addition, application integration is likely to help enterprises to recognize and respond to upcoming opportunities and address the shifts in the market from a single interface.

The application modernization segment is anticipated to become the fastest-growing segment during the forecast period owing to the increasing need to replace the outdated legacy code of enterprise software solutions. For instance, Trianz, a provider of IT services, offers application modernization services that pair its modernization solutions with the enterprises’ existing capabilities to enhance the enterprises' digital transformation journey. Factors such as the increasing need to deliver services, harnessing the benefits of data analytics, and growing adoption of cloud computing are likely to boost the segment growth. In addition, the growing penetration of the internet, increasing use of e-commerce, and other new technologies are expected to foster the growth of the market in the near future.

Enterprise Size Insights

The large enterprise segment held the largest revenue share of over 65.0% in 2021. Large enterprises have been the major adopters of application transformation owing to increased flexibility, better collaboration, lower operating costs, and improved time to market. Traditionally, companies were using cloud for developing applications and re-hosting infrastructure, however, they are now using it to modernize core business applications and processes. Moreover, the need to adopt both basic and niche technologies to improve agility, security, and performance is likely to foster the large enterprise segment in near future.

However, the small and medium enterprises segment is likely to register highest growth rate over the forecast period owing to the flexible pricing models offered by CSPs, improvement in collaboration and innovation, and boost in employee productivity. The application transformation in SMEs will help enhance enterprises’ operations for project management, marketing and promotion, financial management, and building customer relationships, among others. However, the top priorities for the enterprises employing application transformation services are managing and optimizing costs, setting policies for usage of particular service, and deciding the choice of various types of cloud to run particular applications. Thus, SME segment is anticipated to offer numerous opportunities to the stakeholders over the forecast period.

End-use Insights

The BFSI segment held the largest revenue share of over 26.0% in 2021. The large share of this segment is primarily attributed to the increasing adoption of cloud services by banking enterprises for in-house operations. The market is segmented on the basis of end-use into BFSI, retail, healthcare, IT and telecom, government, and manufacturing.Currently, financial technology companies (fintechs) have begun disrupting the sector with cryptocurrency, blockchain, and other technologies to remain competitive in the market. Furthermore, services such as online payments, digital wallets, payment gateways, and exemplary customer experience is likely to play a significant role in the banking industry, facilitating the whole shift to the application transformation solutions.

Manufacturing industry is estimated to grow at substantial rate in the coming years. Digital transformation of manufacturing industries has aided the enterprises to reach its customers in more effective manner. In addition, the application transformation in the sector will play a major role in enabling and democratizing new production systems such as Industrial Internet of Things (IIoT), 3D printing, and generative design. Moreover, healthcare sector too will be benefited by the application transformation solutions with the advent of telemedicine and e-health facilities.

Regional Insights

North America dominated the application transformation market and accounted for revenue share of over 29.0% in 2021. This is owing to early adoption of application transformation solutions. Presence of numerous vendors in the region such as Oracle Corporation, Microsoft Corporation, and International Business Machines Corporation, among others are actively promoting modernization which is likely to boost the market. Moreover, the increasing pressure for reducing IT costs and large size of outsourcing industry in the region are compelling companies to find alternative ways to control spending. On similar lines, the European countries have become hub for cloud technology development that is encouraging small and medium enterprises in the region to adopt application transformation solutions.

In Asia Pacific, the market is likely to witness fastest growth in the region over the forecast period. In 2018, Alibaba Cloud has launched a digital transformation initiative in the APAC region with new products and a partnership program known as ASEAN Partner Alliance Programme. Moreover, India has become one of the key hubs for IT services and solutions. Some of the key companies in the country such as Infosys Ltd., and HCL Technologies Ltd. are instrumental in provisioning application transformation services in and outside the country.

Key Companies & Market Share Insights

Application transformation vendor in the market are gaining demand owing to their consulting and integration expertise. Enterprises are also looking for vendors that have broad portfolio which includes application flexibility options such as containerization and in-house service capabilities. In addition, upgradation and product differentiation is expected to leverage the competition among the companies in the market. Moreover, the growing startup culture and application transformation service provider startups such as FINGO., Brevitaz Systems, Grata Inc., W-Systems Corp, and, Lexington Creative, among others will present potential competition in the market.

In March 2020, Infosys Ltd., an IT and business consulting company and International Business Machines Corporation announced to form a global alliance to aid enterprises in their digital transformation journey with the use of IBM cloud. The collaboration will help organization in regulated sector such as insurance, financial services, and healthcare to transition, transform, and modernize their workloads and applications by using open innovation, enterprise capabilities, and security functions of IBM cloud. Moreover, Infosys will also offer its users access to Red Hat’s range of open source offerings. The partnership and offerings provide enterprises a greater level of scale, capabilities and resources to accelerate their cloud driven transformation. Some of prominent players in the application transformation market include:

• Accenture PLC

• Atos SA

• Bell Integrator

• Capgemini SE

• Cognizant

• Fujitsu Ltd.

• HCL Technologies Ltd.

• International Business Machines Corporation

• Infosys Limited

• Microsoft Corporation

• Micro Focus International PLC

• Oracle Corporation

• Trianz

Application Transformation Market Report Scope

Global Application Transformation Market Segmentation

This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2017 to 2030. For the purpose of this study, Grand View Research has segmented the global application transformation market report on the basis of type, enterprise size, end-use, and region:

• Type Outlook (Revenue, USD Million, 2017 - 2030)

  • Application Integration

  • Cloud Application Migration

  • Application Portfolio Assessment

  • Application Replatforming

  • UI Modernization

  • Others

• Enterprise Size Outlook (Revenue, USD Million, 2017 - 2030)

  • Large Enterprises

  • Small & Medium Enterprises

• End-use Outlook (Revenue, USD Million, 2017 - 2030)

  • BFSI

  • Retail

  • Healthcare

  • IT & Telecom

  • Government

  • Manufacturing

  • Others

• Regional Outlook (Revenue, USD Million, 2017 - 2030)

  • North America

    • U.S.

    • Canada

  • Europe

    • U.K.

    • Germany

  • Asia Pacific

    • China

    • India

    • Japan

  • Latin America

    • Brazil

    • Mexico

  • Middle East & Africa (MEA)