AI-driven mainframe modernization delivers up to 3X ROI, finds Kyndryl survey

The report highlights that organizations are achieving a remarkable 288% to 362% ROI on mainframe modernization projects, with 80% updating strategies recently to adapt to changing market conditions, geopolitical shifts, and evolving regulations

Kyndryl, a leading provider of enterprise technology services, has released the findings of its third annual State of Mainframe Modernization Survey, revealing that businesses are accelerating mainframe modernization efforts with a strong focus on hybrid cloud integration and AI adoption. The report, based on responses from 500 global business and IT leaders, shows that companies are rethinking how they use mainframes amid technological evolution, regulatory demands, and talent shortages.

One of the report’s standout insights is the dramatic return on investment (ROI) organizations are now achieving from modernization projects. Respondents report between 288% and 362% ROI, depending on their approach—whether modernizing directly on the mainframe, integrating it with the cloud, or migrating workloads to other platforms. Furthermore, 80% of surveyed organizations have updated their modernization strategies in the past year to better align with shifting market conditions, geopolitical developments, and regulatory frameworks.

AI becomes a central driver of modernization

The use of AI—particularly generative AI—has shifted from a future consideration to an operational necessity. Nearly 90% of surveyed companies said they have already implemented or plan to implement generative AI on their mainframes. Over the next three years, these initiatives are projected to save $13 billion and generate $20 billion in new revenue.

AI is also playing a critical role in addressing talent shortages, with 56% of organizations reporting increased mainframe usage as AI enables new, high-value business functions within hybrid environments.

“The mainframe has become the AI-fueled catalyst of hybrid enterprise strategies, delivering billion-dollar returns while powering innovation for customers,” said Hassan Zamat, Global Practice Leader for Core Enterprise at Kyndryl. “Organizations 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.”

Skills gap and security still key challenges

Despite these advances, 70% of businesses say they are struggling to find talent with both legacy and modern tech expertise. To bridge this gap, 74% are relying on third-party providers for support. Moreover, 94% of respondents report that regulatory compliance heavily influences their modernization plans, with security remaining a foundational concern.

As enterprises future-proof their IT strategies, the survey shows that the mainframe remains a vital part of innovation—especially when tightly integrated with AI and cloud technologies.