SYDNEY, October 13, 2026 – Kyndryl (NYSE: KD), a leading provider of mission-critical enterprise technology services, released its first global Modernisation Report, which found that as organisations expand investments across legacy and modern platforms, modernisation increasingly requires business orchestration, not technology consolidation.
“AI is creating new possibilities and raising expectations for the business outcomes technology should deliver,” said Martin Schroeter, Chairman and CEO, Kyndryl. “Modernisation is about preparing for what comes next, and the leaders making the most progress are investing across their technology environments—strengthening resilience and putting those investments to work where they deliver the greatest value.”
Based on insights from 2,000 business and technology leaders across five continents and 12 industries, the research shows how AI is reshaping investment priorities across infrastructure and applications, while also challenging organisations’ operating models.
According to the report’s findings, the need to adopt AI now outranks priorities to reduce spending, replace legacy systems, or address a shrinking pool of legacy systems expertise. AI is the top driver of increased mainframe and edge computing use, the second-biggest driver for SaaS and private cloud expansion, and the leading reason organisations are upgrading their networks and application portfolios. Every organisation with a mainframe now reports plans to deploy AI to the platform.
Together, these trends are creating more complex technology environments and new operational challenges for technology leaders.
Nearly half of respondents said they are behind schedule on their modernisation goals. Agentic AI, which can autonomously plan and execute tasks, is emerging as a way to modernise faster. Ten percent of organisations have deployed agentic AI in production for modernisation, applying it to typically time- and skills-intensive tasks of dependency mapping, code conversion, and generating documentation. Early adopters reported stronger outcomes, with 67% saying they are ahead of or on track with modernisation goals, compared with 51% of other organisations.
The research also highlights what is slowing organisations down. Just 9% said they fully understand their applications’ dependencies, and one-quarter say they have large numbers of undocumented applications.
Among other findings, Kyndryl’s study shows that:
Modernisation has become a business-wide priority, not just a technical one
The findings underscore the growing demands on CIOs, who must advance several priorities at once: AI adoption, cyber resilience, regulatory compliance, operational efficiency, and business growth. Respondents named nine distinct stakeholder groups with control over modernisation, from CIOs and CTOs to boards of directors and finance and compliance teams. Modernisation has outgrown the IT department and become a board-level business decision. Its growing importance also requires organisations to coordinate decision-making across more stakeholders without sacrificing speed.
Global events shape technology decisions alongside cost and performance
Sovereignty considerations are a growing factor in modernisation strategies. While 65% of organisations address sovereignty selectively or primarily through a compliance lens, 63% expect sovereign cloud usage to increase and 55% expect sovereignty and regulatory requirements to place greater demands on their network architectures. The findings suggest that the geographic location of where technology runs is increasingly being shaped by governance and geopolitical considerations alongside performance, cost and innovation.
Complexity keeps compounding
The findings challenge the long-held assumption that digital transformation would lead organisations to gradually migrate toward a single preferred technology environment. Instead, their technology environments are becoming more distributed and complex as they prepare for AI. Mission-critical applications are distributed almost evenly across public cloud, private cloud, mainframe and on-premises environments, creating an increasingly hybrid enterprise. As digital transformation extends across the business, it must be underpinned by strategic, governance, and operational coordination—including a more integrated approach to cyber resilience as AI-driven threats accelerate and broaden.
Read more about Kyndryl’s 2026 Modernisation Report.
About Kyndryl
Kyndryl (NYSE: KD) is a leading provider of mission-critical enterprise technology services, offering advisory, implementation and managed services across thousands of customer environments in more than 60 countries. The company designs, builds, manages and modernises the complex information systems that the world depends on every day. For more information, visit www.kyndryl.com.
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