Report:
The Forrester Wave™: Application Modernization And Multicloud Managed Services, Q1 2025
How does Forrester define the Application Modernization And Multicloud Managed Services market in 2025?
Since 2012, major services partners and cloud-specific startups have delivered 'build' (migration and modernization services) and 'run' (multicloud management services). As direct lift-and-shift cloud migration recedes, clients require modernization and multicloud managed services to obtain necessary skills and know-how to modernize and manage day-two environments. Increasing automation, including generative AI, along with advanced team-based approaches and platform-based delivery, are transforming the market. GenAI is recognized as the principal disruptor, though its impact on modernization remains in early phases. The market encompasses 15 significant providers evaluated on their ability to deliver end-to-end capabilities, differentiated vision for application modernization, and resources to invest in emerging technologies and practices.
Key Facts for The Forrester Wave™: Application Modernization And Multicloud Managed Services, Q1 2025 in 2025
- Publication Date: 04-Mar-2025
- Document ID: 001a000001XF4QyAAL | ac5e6e3c
- Summary: In our evaluation of application modernization and multicloud managed services providers, we identified the 15 most significant ones and researched, analyzed, and scored them. This report shows how each provider measures up and helps you select the right one for your needs.
- Authors: Bill Martorelli, Lauren Nelson, Faith Born, Marissa Fritz
How did the Application Modernization And Multicloud Managed Services market evolve in 2025?
- Direct lift-and-shift cloud migration is receding; clients require modernization and multicloud managed services for necessary skills and know-how
- Increasing levels of automation, including generative AI (genAI), are transforming the market
- GenAI is recognized by virtually every provider as the principal disruptor in the market
- Impact of genAI on modernization remains in early phases, primarily in proof-of-concept stage for vertical industry applications
- Advanced team-based approaches and platform-based delivery are transforming service delivery
- Suppliers increasingly handle ongoing management of applications and data assets after modernizing them
- Market has evolved from basic migration services to comprehensive modernization and multicloud management capabilities since 2012
- 15 providers evaluated in this assessment with varying scales from under $2 billion to $64 billion in revenues
- Employee counts range from approximately 34,000 to 800,000 globally among evaluated providers
What product features are required to be included in this year's evaluation?
- Capabilities in application modernization and multicloud managed services. The supplier must have strong capabilities and client acknowledgement in application modernization services as evidenced by significant revenues and market presence. It must also have at least moderate capabilities and client acknowledgement in multicloud management capabilities as evidenced by current service offerings.
- Strong presence in the North American market. The supplier must derive at least 35% of its revenue from customers based in North America.
- Participation in multiple industries. The supplier must serve multiple industries with major customers in at least three industries. It cannot serve a single industry, such as government.
- Substantial application modernization and multicloud managed services revenues. The supplier has at least $1 billion in annual revenue from the application modernization and multicloud managed services market in the past four quarters.
- Mindshare among Forrester's enterprise clients. Forrester clients frequently mention the supplier as one they are considering or shortlisting prior to engagement. We have heard about the product from our clients in the form of inquiries, advisories, consulting engagements, and other interactions over the past 12 months. Other suppliers frequently mention this supplier as a competitor in the market.
What are the common features of top products in the Application Modernization And Multicloud Managed Services space?
No common features specified.
Scope Exclusions
- Vendors serving a single industry (such as government only)
- Suppliers with less than $1 billion in annual revenue from application modernization and multicloud managed services
- Vendors deriving less than 35% of revenue from North American market
- Suppliers lacking strong capabilities in both application modernization services and multicloud management capabilities
- Vendors without significant mindshare among Forrester's enterprise clients
Inclusion Criteria
Vendors must, among other requirements:
- Capabilities in application modernization and multicloud managed services with strong market presence
- At least 35% of revenue from North American market
- Participation in multiple industries with major customers in at least three industries
- Minimum $1 billion in annual revenue from application modernization and multicloud managed services
- Strong mindshare among Forrester's enterprise clients
Offering Strengths — Relative Weighting
- Major cloud platforms supported — 10%
- Hyperscaler competencies — 5%
- Other cloud platforms supported — 10%
- Strategic advisory services — 5%
- Modernization and migration services — 5%
- Infrastructure modernization — 5%
- Cloud-native development — 5%
- Managed services: applications — 5%
- Managed services: cloud infrastructure — 5%
- Database migration and modernization services — 5%
- AI/ML — 10%
- Collaboration model — 5%
- IP solutions and tooling — 5%
- Extended scenarios — 5%
- Customer experience — 5%
- Customer experience: supplier performance — 5%
- Case histories — 5%
Strategy Strength — Relative Weighting
- Vision — 15%
- Innovation — 15%
- Partner ecosystem — 10%
- Pricing flexibility and transparency — 15%
- Community — 10%
- Supporting services and offerings — 10%
- Talent strategy — 10%
- Global delivery strategy — 15%
FAQs
Q: What does this research cover?
A: This research evaluates the 15 most significant application modernization and multicloud managed services providers based on their current offerings, strategy, and customer feedback. It covers vendors' capabilities across applications modernization, cloud-native development, multicloud managed services, AI/ML integration, strategic advisory services, and their ability to deliver end-to-end solutions in multicloud scenarios. The evaluation includes detailed scorecards assessing providers on criteria such as major cloud platform support, hyperscaler competencies, migration and modernization services, managed services for applications and cloud infrastructure, database migration, collaboration models, IP solutions and tooling, and customer experience.
Q: Who should use this research?
A: This research should be used by application modernization and migration services customers seeking to select the right provider for their needs. It is particularly valuable for enterprise clients evaluating suppliers for program-level initiatives requiring both modernization and migration skills, those seeking providers with scale and end-to-end capabilities, organizations looking for suppliers with strong differentiating visions that align with their journey, and companies prioritizing investments in emerging technologies like genAI and modern practices like platform engineering and site reliability engineering (SRE). Buyers can use the interactive provider comparison experience to adapt findings based on their specific priorities and requirements.
Q: What are the mandatory features of vendors included in this market?
A: Vendors must have strong capabilities and client acknowledgement in application modernization services as evidenced by significant revenues and market presence. They must also have at least moderate capabilities and client acknowledgement in multicloud management capabilities as evidenced by current service offerings. Additionally, vendors must derive at least 35% of revenue from North America, serve multiple industries with major customers in at least three industries, generate at least $1 billion in annual revenue from this market, and have strong mindshare among Forrester's enterprise clients.
Q: What are some reasons for not being included in this report?
A:
- Insufficient revenue (less than $1 billion annually from application modernization and multicloud managed services)
- Limited geographic presence (less than 35% revenue from North America)
- Single-industry focus (e.g., only serving government sector)
- Lack of demonstrated capabilities in both application modernization and multicloud managed services
- Insufficient mindshare among Forrester's enterprise clients
- Failure to meet client acknowledgement thresholds for modernization or multicloud management services
Q: What should buyers consider when evaluating products in this market?
A:
- Have the required scale and ability to provide end-to-end capabilities. Look for suppliers that can provide both modernization and ongoing management in the context of multicloud scenarios.
- Have a strong, differentiating vision for application modernization that suits you. Look for suppliers with a distinguishing vision that aligns with your journey, whether technical or business-oriented, and could be rooted in existing AMS relationships or independent of them.
- Have the resources to invest in and make use of emerging technologies and practices. Look past grandiose spending pronouncements to practical use cases and enabling IP. Evaluate suppliers that can deliver on genAI in the context of business and technology strategy and use modern practices like platform engineering and site reliability engineering.
Q: How has the Application Modernization And Multicloud Managed Services market evolved in 2025?
A:
- Direct lift-and-shift cloud migration continues to recede
- Generative AI (genAI) is the principal disruptor in the market today and for the foreseeable future
- Increasing levels of automation, including genAI, are transforming service delivery
- Advanced team-based approaches and platform-based delivery are becoming standard
- Shift from labor arbitrage to technology arbitrage in the era of AI
- Suppliers increasingly handle ongoing management of applications and data assets after modernizing them
- Growing focus on outcome-based relationships rather than staff augmentation
- Modern practices like platform engineering on the build/modernize side and site reliability engineering (SRE) on the run side
- AI-first future where enterprises use data insights to adapt quickly to business changes
Q: What differentiates Strength of Offering vs. Strength of Strategy?
A: Strength of Offering evaluates current capabilities including cloud platform support, modernization services, managed services, AI/ML capabilities, collaboration models, and customer experience. It focuses on what vendors can deliver today. Strength of Strategy assesses forward-looking elements including vision, innovation, partner ecosystem, pricing models, community engagement, supporting services, talent development, and global delivery approach. It evaluates how vendors are positioned for future market needs and their ability to invest in emerging technologies like generative AI.
Reference
- Forrester, The Forrester Wave™: Application Modernization And Multicloud Managed Services, Q1 2025, 04-Mar-2025, ID 001a000001XF4QyAAL | ac5e6e3c
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