AI overtakes legacy replacement as top modernisation priority: Kyndryl

BENGALURU, Oct 6 : Artificial intelligence is reshaping enterprise modernisation priorities, with business outcomes increasingly taking precedence over simply replacing legacy technology, according to Kyndryl’s first global Modernization Report.

The report, based on insights from 2,000 business and technology leaders across five continents and 12 industries, found that organisations are increasing investments across both legacy and modern platforms. This indicates a shift towards orchestrating business and technology rather than focusing solely on consolidating or replacing systems.

“AI is creating new possibilities and raising expectations for the business outcomes technology should deliver,” Kyndryl Chairman and CEO Martin Schroeter said.

He said organisations making the most progress were investing across their technology environments, strengthening resilience and deploying investments where they could generate the greatest value.

The report found that the need to adopt AI has overtaken reducing technology spending, replacing legacy systems and addressing the shrinking pool of legacy technology expertise as the top modernisation priority.

AI has emerged as the leading driver of increased use of mainframes and edge computing, while ranking second as a driver of expansion in software-as-a-service (SaaS) and private cloud.

The technology is also the leading reason organisations are upgrading their networks and application portfolios, highlighting a shift from modernisation as a technology-replacement exercise to one driven increasingly by business requirements.

The report noted that every organisation with a mainframe now plans to deploy AI on the platform, signalling growing efforts to extend the value of existing technology infrastructure rather than simply retire it.

Kyndryl said the findings point to a broader change in enterprise operating models, with organisations increasingly seeking to integrate AI capabilities across existing and modern technology environments to improve resilience, efficiency and business performance.