2025 State of Mainframe Modernization

A global survey of 500 leaders reveals how AI, hybrid IT and compliance are reshaping mainframe strategies, ROI and skills.

Download the report

Modernization is urgent because of advancing AI, risk landscapes and tightening regulations. As enterprises shift to hybrid models, mainframes remain central for resilience, security and scale

Kyndryl’s third annual survey of 500 senior IT and business leaders shows that organizations are updating their mainframe strategies to meet today’s pressures. Most run in hybrid environments and are adapting fast, reporting higher ROI from all three paths: modernizing on, integrating with cloud, and migrating select workloads to other platforms. AI adoption on the mainframe is rising, with leaders anticipating significant cost savings and revenue impact. And from day one, compliance and security are baked into every decision.

80% shifted their mainframe modernization strategy in the past year.

288–362% ROI across modernization paths this year.

88% are deploying or planning GenAI on the mainframe.

01

Strategy is fluid as 80% changed course and ROI climbed across all paths

Enterprises are moving from big bang efforts to pragmatic, phased modernization. Drivers include AI priorities, regulatory pressure and results from earlier projects. Hybrid is now the dominant model, with most organizations blending modernize on and integrate with strategies. This year, ROI rose while costs decreased, reinforcing an iterative approach that lets teams pivot without disrupting critical operations.

02

AI is paying off with $12.7B in savings and $19.5B in expected revenue

Generative AI and advanced automation are moving from pilots to scale. Leaders are using AI to optimize performance, improve fraud detection and strengthen security testing. Organizations planning or deploying GenAI expect significant value over three years, with many already embedding LLMs, DevSecOps and agentic AI in mainframe workflows to accelerate outcomes.

03

Perceived importance dipped 11%, yet 56% increased usage of Mainframes in hybrid IT

A paradox is emerging. While strategic sentiment around mainframes is declining, operational reliance is holding steady or even growing as organizations continue to run mission-critical workloads on them while integrating cloud services. Fewer applications are moving off than last year, and nearly all respondents report consistent or growing usage as they balance flexibility, cost and performance.

04

Modernization needs multi skilled teams across AI, cloud and integration

The constraint is skills, not just legacy code. Seven in ten struggle to hire the right capabilities, especially in AI, cloud and systems integration. Leaders are upskilling, automating, hiring and using partners to execute at pace. Many invest in cybersecurity, compliance and analytics to prepare for the next wave of modernization.

05

Compliance influences decisions for 94% and security remains a top concern

An evolving regulatory landscape is shaping roadmaps, budgets and collaboration between IT, security and compliance. Many organizations design for compliance from the outset and keep select apps on mainframe for security and resilience while integrating with cloud. Security and regulation also set boundaries for AI access and data governance.

Explore the report

See how peers are modernizing their mainframe and where they are investing next. Get the complete data on strategy shifts, ROI, AI adoption, skills and compliance.

Download the report