Once regarded as the "engine room" of many banking, healthcare, and manufacturing businesses, legacy applications are now struggling to meet modern demands like cost efficiency, scalability, and adaptability. As the application landscape evolves, enterprises look at application modernization to elevate their speed, agility, and resilience and upgrade to the cloud.

In 2025, cloud service providers, including MS Azure, will enable organizations to modernize with a cloud-first strategy. Azure's Well-architected framework delivers application modernization with its 5 foundational pillars – namely:

• Reliability
• 
  Security
• Cost optimization
• Operational excellence
• Performance efficiency

87% of technology executives recognize the importance of modernizing their legacy apps. In association with MS Azure, a 2024 IDC survey reported how cloud modernization has delivered the following benefits:

• Improved operational productivity (43%)
• Scalability (36%)
• Security (35%)

In 2025, here's a look at some of the latest trends transforming application modernization.

Application modernization trends to watch in 2025

In 2025, enterprises expect to accelerate their modernization process to the cloud platform. Here are some trends to watch for:

1. Cloud-native applications
   In 2025, 90% of all business applications will likely be cloud-native. Along with cost efficiency, cost-native applications offer greater flexibility and scalability. Cloud- native apps reduce the operational dependency on legacy infrastructure, thus facilitating a smoother transition to the cloud.
   With the mainstream adoption of cloud-native apps, there’s a renewed focus on the underlying cloud infrastructure. Along with seamless scalability, cloud-native appsdemand an infrastructure that makes it faster and easier to deploy modern applications.

2. AI and machine learning
   In 2025, AI-powered agents and multimodal models are poised to transform application modernization. Through capabilities like intelligent automation and
   predictive analytics, AI can make modern apps more innovative and more responsive.
   According to this IBM article, Generative AI can accelerate the modernization process by:
   
   • Discovering and understanding legacy applications, the underlying
     infrastructure, and the interactions between applications.
     ‍
   • Planning how to break down the portfolio of legacy applications into
     iterations for modernization.

AI-powered application performance monitoring (APM) tools can continuously
monitor key performance metrics and identify bottlenecks.

3. Big data and analytics modernization
   Companies are also modernizing the process of analyzing massive datasets. Using advanced modernization tools, organizations are accelerating data processing, thus extracting faster insights and accurate predictions. This also improves the scalability of cloud platforms, allowing companies to analyze growing volumes of data.
   For example, cloud architects can use MS Azure Data Explorer to implement big data analytics for high-volume, high-velocity data from disparate sources.

Benefits and use cases of application modernization

‍

88% of enterprises continue to be hindered by legacy systems. Merely maintaining a legacy application costs enterprises around $337 million each year. Individual enterprises can reduce this cost by 30-50% through application modernization. Among the main benefits, customer-centric enterprises can leverage modernized applications to improve their user experience and responsiveness (particularly in the case of mobile apps). Customers also always expect consistent app performance and efficiency facilitated by modernization.

Application modernization also accelerates product development and innovation. Product companies no longer have to focus their time and resources on maintaining their applications or managing their infrastructure. With cloud-powered tools, they can accelerate product development, thus reducing the time-to-market or gap between product releases.
With modernized cloud operations, companies can also upgrade their security capabilities for their applications and workloads. Companies can also leverage the security capabilities of cloud platforms like MS Azure – including their secure cloud infrastructure. This cloud- first approach also facilitates security-related features including:

• High application availability
• Improved disaster recovery
• Performance monitoring
• On-time data backups

Which technologies are enabling application modernization?

Cloud platforms and services are the driving force behind application modernization. For instance, companies modernizing their applications on MS Azure have reported a 228% ROI – with a payback period of just 15 months.
Azure-powered PaaS services like Azure App Service and Azure Spring Apps provide application developers with a wholly managed application platform to build and deploy apps on the cloud. These Azure PaaS services can deliver benefits like:

• 50% increase in the speed of application development
• 40% reduction in app-related infrastructure costs.

Besides cloud platforms, the microservices architecture also enables the development of modernized applications by independently building each app component. Microservices also help break down monolithic legacy apps into smaller manageable services. For instance, with the Azure Kubernetes Service (AKS), enterprises can build and deploy a fully functional microservices architecture.
Finally, AI technology is transforming the scale of application modernization by eliminating the need to rewrite app code or upgrade legacy systems. For instance, Generative AI is simplifying modernization by:

• Automatically updating application code.
• Identifying every code dependency.
• Provide intelligent recommendations on how to optimize code for better performance.

As an example, furniture brand IKEA improved its online sales by 300% after modernizing its eCommerce store with AI-powered recommendations.

Conclusion

Application modernization has emerged as a competitive tool for enterprises to thrive in 2025 and beyond. Hence, more enterprises are leveraging the latest tools to accelerate their modernization process.
As a Microsoft partner, Parkar has the necessary expertise to accelerate your cloud modernization process. With our Azure-powered migration services, you can transform your legacy applications and improve your business agility and scalability. Besides modernization, we can offer capabilities in:

• Application performance monitoring (APM)
• Cloud infrastructure optimization
• Application development
• Artificial Intelligence (AI)

Are you ready to embark on your cloud modernization journey with us? Contact our team today.

‍

‍