AI drives mainframe modernisation with USD $33 billion impact

Kyndryl has released the results of its 2025 State of Mainframe Modernisation Survey, highlighting trends in how organisations are updating mainframe systems to maximise returns, support AI initiatives and manage ongoing skills and compliance challenges.

Survey findings

The findings are based on responses from 500 business and IT leaders in enterprise and mid-market organisations, representing an average global revenue of USD $3.8 billion. The results indicate that costs associated with mainframe modernisation projects have declined, whilst the return on investment has risen significantly. Depending on the approach – whether retaining, integrating with cloud or migrating workloads – respondents report ROI figures between 288% and 362%.

Four out of five organisations have altered their mainframe modernisation strategies in the previous year, responding to shifts in the market, geopolitical changes, regulatory requirements and the emergence of new technologies.

AI adoption and expectations

The survey shows widespread and accelerating use of artificial intelligence within mainframe environments. Nearly 90% of organisations surveyed have implemented or intend to implement generative AI on the mainframe. Respondents expect these technologies to generate cost savings of USD $13 billion and new revenues of USD $20 billion over the next three years, for a total combined impact of USD $33 billion. AI is also playing a role in mitigating workforce gaps caused by the shortage of specialist skills.

Over half of the organisations (56%) surveyed indicated that their use of the mainframe has increased over the past year, with many identifying new, valuable applications for the platform as part of their hybrid IT strategies.

Business outcomes and strategies

"The mainframe has become the AI-fueled catalyst of hybrid enterprise strategies, delivering billion-dollar returns while powering innovation for customers. Organisations are taking a much more pragmatic approach to modernization to drive better business outcomes and incorporate new technologies. Working with the right partners can help them build a resilient and future-ready platform," said Hassan Zamat, Global Practise Leader for Core Enterprise at Kyndryl. 

Modernisation projects, as described by survey respondents, are not only contributing to direct financial returns but also enabling enterprises to deploy AI capabilities efficiently within secure and regulated environments.

Skills and regulatory compliance pressures

The survey highlights that finding employees with expertise in both traditional mainframe and new digital technologies remains a significant barrier. Seventy percent of organisations report challenges in hiring multi-skilled staff to support their efforts. As a result, reliance on third-party service providers is high, with 74% of respondents indicating ongoing use of external support for mainframe modernisation.

Regulatory compliance and security considerations also feature prominently in decision-making, with 94% of respondents stating that regulations strongly influence their modernisation strategies. Security remains a primary concern when making infrastructure changes or adopting new solutions.

Mainframe's ongoing role

The findings reinforce the mainframe's importance as central to the digital infrastructure supporting businesses' critical operations. As organisations adapt to market challenges and regulatory frameworks, the mainframe continues to underpin their most vital technological capabilities.