Application Transformation Market 2020 and Forecast 2021-2027

  • TBI134460
  • November 05, 2020
  • Global
  • 135 pages
  • IFF Market Research

Report Overview: Application Transformation Market

The global application transformation market size was valued at USD 8.32 billion in 2020 and looks set to grow at a compound annual growth rate (CAGR) of 10.3% from 2021 to 2027. Rapidly increasing digitalization among industries, growing penetration of internet and mobile devices across the world, and an increase in consumption of big data are the primary factors fostering the market growth. In the digital transformation age, there is an increasing demand from enterprises to transform their business models and deliver business value in a cost-effective manner. The development of next-generation industrial solutions will be cloud enhanced and require a platform to showcase their digital business capabilities. Moreover, the rise in other technologies such as the Internet of Things (IoT), 5G, edge computing, use of real-time analytics enabled by machine learning and artificial intelligence are likely to impel the organizations to adopt these solutions. With digital transformation, enterprises are changing their business models and operational processes. Traditional application models are unable to meet the business expectations due to poor delivery speed, limited adaptability to change, and inefficient processes. With apt modernization, enterprises can align company’s objectives with its business goals to scale products and services, serve customers efficiently, and enhance customer experience. Moreover, with the option to migrate to cloud platforms, companies are likely to reduce Total Cost of Ownership (TCO), optimize RoI, reduce complexity, digitize, or disrupt the respective industry. 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. For instance, in 2017, Nike, Inc. modernized legacy monolithic applications using service-oriented architecture and adopted DevOps practices for continuous delivery. Application transformation helps in cost savings and improving the efficiency of the organization through automation and productivity enhancements. The use of intelligent automation and Artificial Intelligence (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 pace of growth in the forthcoming years. Privacy and data security remain the primary apprehension among organizations wherein the 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 few of the important security services offered by the application transformation services vendors. Moreover, as employees have been working with legacy systems for years, staff training, and guidance to master new software and systems is likely to be the added challenge for the enterprises shifting towards application modernization.

Type Insights: Application Transformation Market

Application integration led the market and accounted for the more than 28% revenue share in 2019. The growth can be attributed to the increasing need for integrating the outdated legacy applications and databases with new generation applications. Integration enables quick and streamlined connectivity among applications that will enable seamless sharing of data, automate workflow, 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. Application modernization is anticipated to emerge as the fastest growing segment over the forecast period due to increasing need to replace the outdated legacy code of enterprise software solutions. Moreover, factors such as increasing need to deliver services, harnessing the benefits of data analytics, and growing adoption of cloud computing is likely to boost the segment growth. In addition, the growing penetration of internet, increasing use of e-commerce, and other new technologies are also expected to foster the growth in near future.

End-use Insights: Application Transformation Market

In terms of market revenue, the BFSI sector accounted for the largest market share of over 25% in 2019 owing 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 application transformation market. Furthermore, services such as online payments, digital wallets, payment gateways, and exemplary customer experience are likely to play a significant role in the banking industry, facilitating the adoption of these solutions. Manufacturing industry is estimated to expand at a substantial CAGR in the forthcoming years. Digital transformation of manufacturing industries has aided enterprises to reach their customers in a 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 from these solutions with the advent of telemedicine and e-health facilities.

Enterprise Size Insights: Application Transformation Market

The large enterprise segment lead the market with a share of over 60% in 2019. Large enterprises have been the major adopters of the market owing to increased flexibility, better collaboration, lower operating costs, and improved time to market. Traditionally, companies were using cloud for developing applications and rehosting 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 accelerate the market adoption among large enterprise segment in the near future. However, small and medium enterprises segment is likely to register highest CAGR te over the forecast period owing to the flexible pricing models offered by CSPs, improvement in collaboration and innovation, and a 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. Moreover, these solutions are likely to benefit enterprises in managing and optimizing costs, setting up policies for utilizing particular service, and deciding the type of cloud service to run specific applications.

Regional Insights: Application Transformation Market

North America accounted for the major revenue share of over 30% in 2019 owing to early adoption of application transformation solutions. Presence of numerous vendors in the region such as Oracle Corporation, Microsoft Corporation, and IBM Corporation, actively promoting modernization 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 a hub for cloud technology development that is encouraging small and medium enterprises in the region to adopt application transformation solutions. Asia Pacific region is likely to witness fastest growth in terms of revenue over the forecast period 2021-2027. In 2018, Alibaba Cloud launched a digital transformation initiative in the region with new products and a partnership program known as ASEAN Partner Alliance Programme, which is anticipated to boost regional growth. 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 HCLTechnologies Ltd. are instrumental in provisioning application transformation services in and outside the country.

Key Companies & Market Share Insights: Application Transformation Market

IBM Corporation, Accenture Plc., Microsoft Corporation, and Oracle Corporation, are the prominent players present in the market. Application transformation vendors are likely in demand owing to their consulting and integration expertise. Enterprises are also looking for vendors that have an extensive portfolio, which includes application flexibility options such as containerization and in-house service capabilities. In addition, the vendors are likely to leverage upgradation and product differentiation to gain an edge over other competitors in the market. Moreover, the growing startup culture and market 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 IBM 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 organizations in regulated sectors 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 the IBM Cloud. Moreover, Infosys will also offer its users access to Red Hat’s range of open source offerings. The partnership and offerings are likely to provide enterprises a greater level of scale, capabilities, and resources to accelerate their cloud-driven transformation. Some of the prominent players in the application transformation market include:

Key companies Profiled: Application Transformation Market Report

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 2016 to 2027. For the purpose of this study, Trusted Business Insights has segmented the global application transformation market report on the basis of type, enterprise size, end use, and region:

Type Outlook (Revenue, USD Million, 2016 - 2027)

  • Application Integration
  • Cloud Application Migration
  • Application Portfolio Assessment
  • Application Replatforming
  • UI Modernization
  • Others

Enterprise Size Outlook (Revenue, USD Million, 2016 - 2027)

  • Large Enterprises
  • Small & Medium Enterprises

End-use Outlook (Revenue, USD Million, 2016 - 2027)

  • BFSI
  • Retail
  • Healthcare
  • IT & Telecom
  • Government
  • Manufacturing
  • Others

Table of Contents
Chapter 1 Methodology and Scope
  1.1 Research Methodology
  1.2 Research Scope and Assumptions
  1.3 List of Data SourcesChapter 2 Executive Summary
  2.1 Application Transformation Market- Industry Snapshot & Key Buying Criteria, 2016 - 2027
  2.2 Global Application Transformation Market, 2016 - 2027
      2.2.1 Global application transformation market, by region, 2016 - 2027
      2.2.2 Global application transfor
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