Application Modernization And Multicloud Managed Services

This category did not exist until Forrester merged two others into it. One Wave covered application modernization and migration services, meaning the work of changing software. Another covered multicloud managed services, meaning the work of running it afterwards.

They were combined because customers had already combined them. Forrester's client references preferred a single supplier across modernize and run by a four-to-one margin, which is not a marginal preference, and the market research followed the buying behaviour rather than the other way around.

What makes this interesting is that Forrester also documented why some customers resist that consolidation, and their objection is the most useful thing in the whole evaluation.

What the combined category covers

Three phases of a software estate's life sit inside the scope: build, modernize, and operate.

The modernization half is the work covered in the predecessor category. Portfolio assessment, deciding what to retire, replace, rehost, replatform, refactor, or rebuild, and then executing that across hundreds of applications while the business keeps running.

The managed services half is what happens next. Running the modernised estate across multiple clouds, handling incidents, managing capacity and cost, patching, monitoring, and maintaining the applications and data assets on an ongoing basis.

Forrester notes that suppliers increasingly handle that ongoing management themselves rather than handing off to niche managed service providers, which is the supply-side half of the same consolidation. The systems integrators wanted the run revenue, and customers wanted one throat to choke.

The lift-and-shift era has ended, in Forrester's framing, while the modernization journey continues. What changed is that modernization stopped being a project with an end date and became a continuous condition, which makes the separation between changing software and running it increasingly artificial.

The objection worth taking seriously

Forrester records two distinct customer fears about single-supplier scope, and they are not the same fear.

The first is straightforward supplier power. Giving one provider control across modernization and operations creates dependency, weakens your negotiating position at renewal, and makes exit expensive. That is a familiar procurement concern and organisations know how to think about it.

The second is subtler and more damaging. Some customers worry that an end-to-end supplier will optimise on the run side what it should have optimised on the build side.

Sit with that for a moment, because it describes a genuine misalignment of interest rather than a hypothetical one.

A provider that modernises an application and then runs it under a managed services contract has two ways to make money from operational complexity. It can engineer that complexity out during modernization, which costs it effort now and reduces its run revenue later. Or it can leave the complexity in place and bill for managing it indefinitely.

Nobody has to act in bad faith for this to bite. It is enough that the incentive is quietly pointing in one direction across a thousand small decisions about how much to simplify, how much to automate, and how much technical debt to actually retire rather than merely relocate.

The four-to-one preference for single suppliers is real and rational. So is this conflict. Both can be true, and the practical answer is to write the contract knowing about it, which is covered further down.

Inside The Forrester Wave: Application Modernization And Multicloud Managed Services, Q1 2025

Published in Q1 2025, the evaluation scored fifteen providers against twenty five criteria.

Six Leaders: Accenture, Tata Consultancy Services, Infosys, Capgemini, HCLTech, and Cognizant.

Six Strong Performers: IBM, Wipro, NTT DATA, EPAM, Deloitte, and Tech Mahindra.

Three Contenders: LTIMindtree, Virtusa, and Mphasis.

Capgemini's scorecard is the most publicly detailed, with the highest possible score in thirteen of the twenty five criteria including AI and machine learning, collaboration model, strategic advisory services, and modernization and migration services, alongside top marks on sustainability programme and talent strategy. Reference customers cited the quality of its solution engineers and proactive issue resolution.

Worth noting Forrester's own framing of the results, which is unusually permissive. Depending on your strategic goals, any of the participating suppliers is described as a viable choice, along with several that did not qualify for Wave participation at all. That is not how vendors present Wave positions, and it is a fair reflection of a market where fifteen large firms can all deliver competently and fit is the actual variable.

What separates the Leaders

Forrester identifies three differentiators, and each contains a warning aimed at buyers rather than a compliment aimed at vendors.

Scale with genuine end-to-end capability. Many types of supplier deliver modernization services, and the guidance is to find the right supplier type rather than the largest one, with attention to whether the provider can genuinely handle both modernization and ongoing management in a multicloud context.

A differentiating vision that suits your journey specifically. Forrester is explicit that no single vision fits everyone, that the vision may be technical or business-oriented and ideally both, and, pointedly, that buyers should look past incumbency when evaluating alternatives. The firm already running your application management is not automatically the right modernization partner, and inertia is the most common reason organisations never test that.

The resources and will to invest in emerging technology. Here the warning is sharpest: look past grandiose spending pronouncements to practical use cases and enabling intellectual property. Every provider in this market has announced a large AI investment number. Almost none of those numbers tell you anything about what will happen on your programme.

The finding vendors would rather you skipped

Forrester's third market observation is the most quotable line in the research, and it goes directly against how every firm in this category markets itself.

Suppliers stress their investments in intellectual property. Customers yawn.

More precisely: clients continue to give mixed reviews on innovation and on pricing and contracting strategy, and despite sustained supplier effort to brand packaged IP as accelerators and platforms, clients seldom see much value in them. Forrester describes this as a potential disconnect between supplier and client perception.

Every one of these fifteen firms will show you a named platform in a first meeting. It will have a brand, a logo, and a slide describing how it compresses timelines. The customers who have actually used them report, in aggregate, that they were not the thing that mattered.

This is directly usable in a negotiation. When a provider prices in a premium justified by proprietary accelerators, the reasonable response is to ask for reference customers who will attribute specific outcomes to that specific tooling. Forrester's research suggests those conversations will be harder to arrange than the vendor implies.

It also reframes what you are buying. If the IP is not the differentiator, then the differentiator is people, delivery discipline, and how the relationship is run. Capgemini's strongest reference feedback was about engineer quality and proactive issue resolution, which is a compliment about humans rather than about platforms.

Generative AI as a slow burn

Forrester's assessment at the time of the Q1 2025 evaluation was measured in a way the market's marketing was not. Most participants had built platforms to accelerate results with generative AI, and the overall impact remained muted, though Forrester expected significant impact across modernization and multicloud managed services shortly.

That gap between capability announced and impact observed is worth holding onto, and it is now roughly eighteen months old.

The direction of travel since has been meaningful. Legacy code comprehension, test generation for untested code, and first-pass language translation turned out to be among the more credible applications of the technology, and they map almost exactly onto the most expensive human hours in a modernization programme. Forrester has since established separate categories covering agentic development platforms and the security tooling around them, which is what happens when a capability matures enough to warrant its own coverage.

The commercial consequence has not been settled. If a growing share of modernization effort is performed by tooling rather than by people, then a per-person rate card is measuring the wrong input. Forrester flagged pricing and contracting as an area of mixed client reviews in 2025. That has become a live negotiating position rather than a satisfaction score.

The practice signal

One detail in Forrester's guidance is easy to skim past and is a genuinely good diagnostic.

Look for modern practices, specifically platform engineering on the build and modernize side and site reliability engineering on the run side.

That pairing tests whether a provider has actually integrated the two halves of this merged category or is simply selling them from two organisations under one contract. Platform engineering means building an internal platform that development teams consume, rather than doing bespoke work per application. Site reliability engineering means running services with error budgets and engineering rigour rather than a ticket queue and a headcount ratio.

A provider doing both, with the same people talking to each other, has organised itself around the combined category. A provider doing neither is running a modernization factory and a managed services desk that happen to share a logo.

Ask which specific practices the provider will bring, who owns them, and whether the modernization team and the run team share tooling and telemetry. The answer separates firms faster than any capability matrix.

What to negotiate

Price the run contract before you commit to the build. This is the direct answer to the conflict described earlier. If the same provider modernises and operates, agree the operational cost model up front, ideally with committed reductions tied to the modernization delivering what it promised. A provider confident in its own engineering will accept that. One that expects to bill for complexity will find reasons why it is premature.

Split the decision even if you buy from one supplier. The four-to-one preference is for a single supplier, not for a single procurement. Evaluating modernization capability and managed services capability separately, then choosing to award both to the same firm, is a materially stronger position than bundling from the start.

Test the incumbency assumption deliberately. Forrester's own guidance says look past incumbency, which is a polite way of saying most organisations do not. If your application management provider is bidding, run the evaluation as though they were not, and see whether they win it.

Ask for outcome attribution on the IP. Given what reference customers reported, treat every named accelerator as a claim requiring evidence rather than a feature.

And clarify how tooling productivity flows through the price. If genAI-enabled delivery reduces the hours required, establish now whether that shows up in your invoice or in the provider's margin.

One note on the research

This Wave is the current evaluation for this market, and it superseded two earlier ones. If you are working from The Forrester Wave: Application Modernization And Migration Services, Q1 2024, or from a multicloud managed services evaluation, both were folded into this combined category in Q1 2025.

The Landscape report published in Q4 2024 covers additional providers that did not qualify for Wave participation, which is the relevant document if your programme is below the scale these fifteen firms typically serve. Forrester also published a companion Buyer's Guide in July 2025, which opens with the useful admission that you are unlikely to find a supplier that fully meets all your requirements.

Forrester does not endorse any provider named here, and tier placement should not be read as a recommendation to buy.