The average global enterprise wastes more than $370 million annually due to being unable to efficiently modernize outdated legacy systems. Mainframe modernization projects, meanwhile, delivered between 288% and 362% ROI in 2025, according to a major survey.
Understanding mainframe modernization, and particularly the options available for your business, then, could be vital to your bottom line. Let’s delve into the topic, covering traditional approaches, how AI and other technologies are driving a major strategic shift, and the help OpenLegacy can offer.
Mainframe modernization: key takeaways
- Mainframe modernization is the updating of legacy mainframe systems to adapt to new technology and overall digital transformation.
- The benefits of modernizing mainframes are varied, and include improved agility, reduced costs, and easier integration with cloud-native applications.
- Skills gaps in your organization, the complexity of legacy systems, and security and compliance concerns are among the most common challenges of mainframe modernization.
- Enterprises are increasingly adopting a strategic shift from “big bang” modernization approaches to more agile, phased modernization.
- With the help of AI-driven tools offered by AWS, IBM, and OpenLegacy, that kind of agile, hybrid modernization delivers an impressive ROI for enterprises.
What is mainframe modernization?
Mainframe modernization is when you update your old legacy mainframe system to meet the challenges posed by new technology and grasp the opportunities of digital transformation. It can involve migrating essential applications and data to the cloud or may mean adapting a hybrid model (where both legacy systems and the cloud co-exist).
Mainframe modernization has become a higher priority across various industries in recent years. It can help varied companies achieve their business goals and initiatives, improve customer experience and device management, and take advantage of newer technologies, such as artificial intelligence.
It often involves application development and the use of microservices, and increasingly leverages intelligent AI to support the process.
Mainframe modernization and mainframe application modernization: are they the same thing?
Mainframe application modernization focuses on updating software architecture and code. Mainframe modernization covers the entire ecosystem—hardware, middleware, databases, and processes. The two phrases, however, are often used interchangeably.
Why mainframe modernization matters to your business
If your legacy mainframe has had a long lifecycle and is outdated, mainframe modernization is how you adapt it to better cope with modern demands and new technologies.
There are numerous reasons why you should modernize your mainframe, from reducing costs to improving workflows and performance. It also means you can become cloud-native, and adapt more quickly to future changes in the market and new tech:
Improved agility
Your legacy systems built on COBOL, PL/I, Assembler, and other older languages can struggle to support modern workloads.
By leveraging modern APIs, your DevOps team can integrate existing applications into more modern (and distributed) cloud-native services—enhancing functionality, agility, and long-term innovation potential.
Reduced costs
Legacy systems are also notoriously expensive to maintain. In the financial services industry, for instance, 70-75% of IT spending can get consumed by legacy technologies (often COBOL-based platforms). Licensing, infrastructure, and labor costs only increase, too, as workloads grow.
Legacy modernization allows you to reduce these expenses through better resource distribution, smarter integration strategies, and AI-powered automation—delivering both immediate and long-term savings.
Integration with cloud-native systems
You’re probably generating and using more data than ever. In fact, the amount of data generated, captured, copied, and consumed worldwide is growing rapidly, and that growth is predicted to continue apace:
Modernizing your mainframe enables seamless integration with cloud architecture. That means you can scale storage, support virtualization, and unlock hybrid capabilities that combine the strengths of legacy systems with cloud flexibility.
What are the typical challenges of mainframe modernization?
Despite the benefits, modernization comes with its own set of challenges. Understanding them upfront allows for better planning and risk mitigation:
Skills gaps in your organization
You might be wary of mainframe modernization if you feel it will also require significant changes to your workforce. Perhaps, for example, your team lacks the expertise to operate or maintain a new system–a concern shared by 70% of enterprises. You might have to hire new staff or retrain existing ones, which can be expensive.
The other potential cost savings of modernization, however, can offset this. What’s more, as time passes, it’s increasingly the expertise to operate and manage older, legacy systems that’s in shorter supply than that related to more modern alternatives.
Complexity of legacy systems
Over years or decades, legacy systems accumulate customizations, patches, and workarounds that make them complex and fragile. While modernization can be daunting, moving toward an open, modular architecture is ultimately more sustainable and adaptable.
Downtime and business disruptions
Mainframes often support mission-critical operations, so the risk of disruption during modernization is a valid concern. However, platforms like OpenLegacy enable phased, low-risk transitions—keeping systems running while modernization progresses behind the scenes.
Compliance and data protection
Enterprises—especially those in industries such as healthcare and financial services—rightly view compliance and data protection as vitally important. Any process that involves updating systems or moving data held within can pose potential risks in this area. It’s crucial, therefore, that cybersecurity and the protection of sensitive data is a cornerstone of any mainframe migration strategy.
Mainframe modernization techniques and approaches
Many legacy systems are powered by COBOL or other older programming languages. That means you need to look at how to make them work with newer applications and languages such as Java. You must also consider the increasing use of AI and machine learning and how they fit within your business model.
Choosing the right modernization approach depends on your organization’s needs, risk tolerance, and long-term digital strategy. Here are three of the most common traditional approaches:
Modernize in place
Modernizing in place allows organizations to retain their core legacy systems while enhancing them with modern capabilities. It’s a cost-effective, low-risk strategy that provides immediate improvements in agility and integration.
OpenLegacy plays a key role by exposing legacy business logic as modern, secure APIs—unlocking core system functionality without invasive code changes. This allows companies to connect legacy systems directly to cloud-native applications and services, enabling continuous innovation with minimal disruption.
Rehost/re-platform
This approach involves migrating workloads to a new environment—such as the cloud or a distributed infrastructure—while retaining core business logic and workflows.
OpenLegacy supports this phased, hybrid model by generating integration-ready APIs that allow legacy and cloud environments to operate in parallel. This enables gradual migration, reduces risk, and ensures legacy capabilities remain accessible during and after the transition.
Replace/rewrite
Replacing or rewriting your legacy systems from the ground up is the most comprehensive—but also the most resource-intensive—modernization strategy. It often involves completely decommissioning the mainframe and rebuilding business processes in a new, cloud-native architecture.
Even in full-replacement scenarios, OpenLegacy accelerates success by serving as a transitional integration layer. Our platform helps organizations extract critical logic and data from legacy systems and expose it in modern formats—ensuring continuity during redevelopment, reducing risk, and streamlining the path to full modernization.
Agile phased modernization: the strategic shift to hybrid approaches
Enterprises are rapidly shifting away from traditional “big bang” approaches to mainframe modernization. According to Kyndryl’s 2025 State of Mainframe Modernization survey, 80% of enterprises shifted their modernization strategies in the past year. What they’re now favoring are more pragmatic, phased approaches.
These agile, hybrid strategies allow organizations to begin modernization efforts more quickly and reduce the risk of downtime or business disruption. They can blend so-called “modernize on” and “integrate with” strategies, and take an iterative approach which is delivering significant ROI, as mentioned earlier.
One of the principal driving forces behind this strategic shift is a dramatic proliferation of AI-driven modernization tools available to enterprises. In the course of 2024 and 2025, major players such as IBM and AWS launched new AI solutions for modernization.
AI-driven tools for mainframe modernization
Initially launched in late 2023, IBM further enhanced their IBM watsonx Code Assistant for Z in June 2025. Reflecting the desires behind the overall shift to AI-powered modernization, IBM described the enhanced solution as being designed to “accelerate mainframe modernization with lower risk, reduced cost and full lifecycle support.”
In May 2025, meanwhile, AWS announced broad availability of AWS Transform Mainframe, their own AI-powered solution to accelerate modernization. That particular service aims to do so by automating processes such as code analysis, migration planning, and more.
Leading players in legacy modernization aren’t going it alone, either. IBM Consulting and AWS have a deep partnership aimed at accelerating mainframe modernization. AWS, too, is partnering with OpenLegacy in a strategic collaboration to help enterprises achieve the incremental modernization that delivers such impressive results while ensuring business continuity.
The collaboration combines OpenLegacy’s leading AI-driven modernization platform with AWS comprehensive cloud services. That helps empower organizations to take the now-favored hybrid approach to mainframe modernization, while benefiting from OpenLegacy capabilities, like:
- Intelligent analysis - Gain a full understanding of modernization environments by visualizing interdependencies and finding safe decoupling points.
- Risk-free roadmapping - OpenLegacy’s AI-powered Modernization Planner helps ensure full coexistence between legacy and modern systems, for zero disruption.
- Effective execution - OpenLegacy Hub’s prebuilt mainframe connectors mean you can generate and deploy modernization-ready APIs, automatically–no need for middleware or rewriting applications.
Combining those capabilities with AWS cloud offerings, furthermore, ensures:
- Immediate value delivery - Deploy modernized workloads to AWS within weeks, rather than suffering months’ of “analysis paralysis”.
- Universal compatibility - Effective and impactful modernization across all major mainframe platforms including z/OS, AS/400, Unisys, Hitachi, and Tandem.
- Flexible modernization patterns - Support for all modernization approaches, from adding new capabilities to extend existing systems to complete re-architecture on AWS.
Security considerations in mainframe modernization
Cybersecurity and digital modernization are two areas that go hand-in-hand. Any enterprise considering modernizing or otherwise changing crucial infrastructure, must always keep security and privacy concerns top of mind. That’s perhaps even more true in the area of mainframe modernization.
Cybersecurity and data protection during modernization
Mainframes typically store and manage the most sensitive data businesses are responsible for, including customer information, finance reports, proprietary material, and more.
That data is often subject to stringent data protection legislation, so it’s little wonder that 94% of enterprises say regulation impacts their modernization decisions. That’s unlikely to diminish any time soon, with newer legislation like the EU’s 2025 Digital Operational Resilience Act (DORA) only just starting to have an impact.
With hybrid approaches to mainframe modernization proliferating, it’s no longer a simple case of ensuring all sensitive data is under lock and key in on-premises environments. Instead, mainframe modernization must bake in data management and governance at every stage. Otherwise, data–and its corporate owner–may become exposed to breaches.
Done right, however, mainframe modernization can have a significantly positive impact on cybersecurity and data protection. For example, around ¼ of organizations that deploy AI tools on the mainframe report improved security testing (26%) and advanced threat detection (24%) as key use cases.
The key takeaway, then, is that data protection and cybersecurity aren’t peripheral concerns when it comes to mainframe modernization, rather they’re a central foundation.
Mainframe modernization case studies and success stories
OpenLegacy specializes in helping organizations unlock their legacy systems and achieve effective modernization. Here are just a few examples of how businesses across industries have benefited from OpenLegacy’s agile, structured approach to mainframe modernization:
Citibanamex: exposing core banking applications for successful digital transformation
Citibanamex processes over 40% of total banking transactions in Mexico. In order to keep up with the dynamic Mexican consumer banking market, it needed to leverage and extend its core technology, which had a proprietary mainframe system at its heart.
Over a number of years, the bank attempted to achieve this by layering new services and applications onto this technological core. The result was an overly complex web of in-house tools, mainframe gateways, ESBs, middleware, dispatchers, routers, and messaging queues.
Citibanamex turned to OpenLegacy to expose all of their core banking applications for true mainframe modernization. This gave the bank the ability to automatically generate, test, and deploy standard APIs driven by business needs. By deploying over 300 services as part of this modernization project, Citibanamex were able to continually improve their mobile banking app and see its user rating in the app store soar from 2.0 to over 4.5.
“After years of mainframe modernization projects that didn’t realize their full potential, OpenLegacy’s API integration platform is the light at the end of the tunnel. Within an hour, we went from nothing to a working API connected to our payments app, powered by OpenLegacy—80% of the work comes right out of the box.”
Legal & General: phased mainframe modernization with AWS
Legal & General, a leading financial services group, wanted to safely separate their “softcore” and “hardcore” applications. The objective was to migrate the softcore applications to modern platforms such as Microsoft Dynamics and AWS-hosted services and leave mission-critical workloads on the mainframe.
For success, they needed a gradual, low-risk way to decouple legacy systems, expose mainframe functionality via APIs, and transition workloads to AWS. That’s why they turned to OpenLegacy for help.
The OpenLegacy Hub helped Legal & General automatically generate microservices and APIs that exposed existing mainframe business logic without changing the core COBOL programs. The company now runs a true hybrid architecture, with the mainframe remaining the trusted system of record and modern services running across private cloud, SaaS, and AWS.
Achieve successful mainframe modernization with OpenLegacy’s help
Mainframe modernization is a complex journey, but it doesn’t have to be a risky one.
OpenLegacy provides an AI-driven platform built specifically for agile, structured, secure, and scalable modernization. Our automation-first approach allows you to analyze your existing systems, plan integration points with clarity, and execute transformation with AI-ready APIs—reducing risk at every step.
From legacy system visibility to cloud deployment, OpenLegacy helps you modernize with confidence—keeping critical systems running while you move toward a future-ready architecture.
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