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Industry Landscape
The legacy system modernization market is experiencing significant growth, driven by enterprises' need to reduce technical debt, improve agility, and leverage cloud technologies. COBOL remains critical for core operations, but skill shortages and maintenance costs are pushing demand for AI-driven solutions to automate understanding and transformation. The industry is focused on extracting business value from existing assets.
Total Assets Under Management (AUM)
Legacy Modernization Market Size in United States
~$15.4 billion (2023)
(15.0% (CAGR 2023-2028) CAGR)
- Driven by cloud adoption and digital transformation initiatives.
- Enterprises seeking to improve agility and reduce operational costs.
- Increased focus on data integration and API-led connectivity.
Total Addressable Market
15.4 billion USD
Market Growth Stage
Pace of Market Growth
Emerging Technologies
Generative AI for Code Generation
Generative AI models are evolving to directly generate, refactor, and translate COBOL code, potentially automating significant portions of modernization efforts.
Cloud-Native Mainframe Emulation
Advanced cloud platforms are offering improved capabilities to emulate mainframe environments natively, enabling faster migration and reducing reliance on on-premise hardware.
AI-driven Business Process Discovery
AI is increasingly used to automatically discover and map complex business processes embedded within legacy code, aiding in re-engineering and documentation.
Impactful Policy Frameworks
NIST AI Risk Management Framework (AI RMF 1.0, 2023)
The NIST AI Risk Management Framework (AI RMF 1.0), published in January 2023, provides voluntary guidance to manage risks of artificial intelligence technologies.
This policy will encourage responsible AI development and deployment within the industry, potentially increasing the demand for transparent and 'deterministic AI' solutions like Phase Change Software's.
Cybersecurity and Infrastructure Security Agency (CISA) 'Shields Up' Initiative (Ongoing from 2022)
CISA's 'Shields Up' initiative, ongoing since early 2022, urges organizations to enhance their cybersecurity postures in response to evolving global threats.
This initiative drives enterprises to prioritize secure modernization, benefiting solutions that improve visibility and control over legacy codebases for security auditing.
General Data Protection Regulation (GDPR) - extraterritorial impact (Effective 2018, ongoing enforcement)
The GDPR, effective May 2018, is a comprehensive data protection law that regulates the processing of personal data of individuals in the EU and applies extraterritorially to organizations handling such data.
While not new, its ongoing and stringent enforcement compels businesses with COBOL systems handling personal data to ensure data flow and processing within legacy applications are clearly understood and compliant, increasing the need for precise code analysis tools.
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