Amid slower economic growth, Europe’s
enterprises favoring smaller modernization projects that
demonstrate clear ROI, ISG Provider Lens™ report says
Facing cost pressures, skills shortages and increasing
regulation, European enterprises are leveraging service providers
to modernize their mainframes and integrate them with cloud
platforms to drive AI innovation, according to a new research
report published today by Information Services Group (ISG) (Nasdaq:
III), a global AI-centered technology research and advisory
firm.
The 2025 ISG Provider Lens™ Mainframe – Services and Solutions
report for Europe says the region’s slow or near-stagnant economic
growth has made enterprises more cautious about IT investments.
Many favor smaller, high-impact modernization projects that
demonstrate clear ROI.
Meanwhile, the need for innovation is spurring more companies to
invest in upgrading their mainframes and adopting hybrid models
that blend the reliability of mainframes with the agility and
scalability of the cloud. Companies, in particular, are looking to
harness data across platforms for AI and analytics.
Service providers in Europe are responding with novel tools and
platforms that enable more incremental, service-based approaches to
modernization. Generative AI (GenAI) has become increasingly
viable, assisting organizations with code refactoring,
documentation and skills transfer.
“Some 28 percent of mainframe clients tell us they lack the
in-house skills to be able to modernize their mainframe systems
effectively,” said Dr. Matthias Paletta, director and ISG lead for
technology modernization in EMEA. “With up to 30 percent of
Europe’s IT workforce retiring by 2030, and with universities
having already transitioned to teaching cloud-native and web-based
development, the talent pool for mainframe positions is shallower
than ever before.”
Over the past 18 months, the use of GenAI in mainframe
environments has progressed from niche pilot tests to structured
deployments, particularly in industries like banking, insurance and
public administration that rely heavily on mainframes, the report
says. Providers say GenAI is enabling faster discovery of code
dependencies and helping bridge knowledge gaps for younger
developers. Yet it still requires domain-specific tuning and
subject-matter experts to validate output.
Strict European data protection laws add complexity to mainframe
modernization, as organizations must handle code and correlated
data carefully to avoid breaching GDPR or sector-specific
regulations, the report says.
Expected improvements in the use of GenAI in mainframe
modernization include the development of more precise
domain-focused models to handle COBOL variants and legacy data
structures, integrated compliance features that log and audit AI
use, and deeper ties to DevOps pipelines for automated testing.
Many providers, the report says, are working on capabilities
supporting hybrid cloud architectures, where modern and legacy
systems interconnect seamlessly.
“Enterprises’ mainframe teams are shrinking,” said Jan Erik
Aase, partner and global leader, ISG Provider Lens Research. “So,
more and more, they’re turning to outsourced and managed services
to maintain their mission-critical systems. This frees those teams
from having to constantly monitor their systems and respond to
incidents, so they can focus on innovation.”
The report also explores other trends, including the
continuingly low availability of Mainframe as a Service (MFaaS)
options for Europe. Although the MFaaS model has gained more
visibility among potential customers in the last 18 months,
adoption remains measured, and the number of providers offering
MFaaS is still minimal.
For more insights into the landscape for Europe’s mainframe
service providers, see the ISG Provider Lens™ Focal Points briefing
here.
The 2025 ISG Provider Lens™ Mainframe – Services and Solutions
report for Europe evaluates the capabilities of 46 providers across
five quadrants: Mainframe Optimization Services, Application
Modernization Services, Mainframe as a Service, Mainframe
Operations and Mainframe Application Modernization Software.
The report names Atos, DXC Technology and TCS as Leaders in four
quadrants each. Capgemini, HCLTech, Infosys and Kyndryl are named
Leaders in three quadrants each. Cognizant and Wipro are named
Leaders in two quadrants each. Accenture, Avanade, AWS, Google,
Heirloom Computing, LTIMindtree, Rocket Software, TmaxSoft and TSRI
are named Leaders in one quadrant each.
In addition, Kyndryl and NTT DATA are named as Rising Stars —
companies with a “promising portfolio” and “high future potential”
by ISG’s definition — in one quadrant each.
In the area of customer experience, UST is named the global ISG
CX Star Performer for 2025 among mainframe services and solutions
providers. UST earned the highest customer satisfaction scores in
ISG's Voice of the Customer survey, part of the ISG Star of
Excellence™ program, the premier quality recognition for the
technology and business services industry.
A customized version of the report is available from TSRI.
The 2025 ISG Provider Lens™ Mainframe – Services and Solutions
report for Europe is available to subscribers or for one-time
purchase on this webpage.
About ISG Provider Lens™ Research
The ISG Provider Lens™ Quadrant research series is the only
service provider evaluation of its kind to combine empirical,
data-driven research and market analysis with the real-world
experience and observations of ISG's global advisory team.
Enterprises will find a wealth of detailed data and market analysis
to help guide their selection of appropriate sourcing partners,
while ISG advisors use the reports to validate their own market
knowledge and make recommendations to ISG's enterprise clients. The
research currently covers providers offering their services
globally, across Europe, as well as in the U.S., Canada, Mexico,
Brazil, the U.K., France, Benelux, Germany, Switzerland, the
Nordics, Australia and Singapore/Malaysia, with additional markets
to be added in the future. For more information about ISG Provider
Lens research, please visit this webpage.
About ISG
ISG (Nasdaq: III) is a global AI-centered technology research
and advisory firm. A trusted partner to more than 900 clients,
including 75 of the world’s top 100 enterprises, ISG is a long-time
leader in technology and business services that is now at the
forefront of leveraging AI to help organizations achieve
operational excellence and faster growth. The firm, founded in
2006, is known for its proprietary market data, in-depth knowledge
of provider ecosystems, and the expertise of its 1,600
professionals worldwide working together to help clients maximize
the value of their technology investments.
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version on businesswire.com: https://www.businesswire.com/news/home/20250326112103/en/
Press Contacts:
Will Thoretz, ISG +1 203 517 3119 will.thoretz@isg-one.com
Philipp Jaensch, ISG +49 151 730 365 76
philipp.jaensch@isg-one.com
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