A new Kyndryl-commissioned survey just dropped some numbers that aren’t surprising if you’re in the trenches: 78% of IT leaders now see modernization as a top priority for 2026. That’s a huge jump from a few years ago. This means companies are finally getting serious about moving past incremental updates and are now planning for wholesale transformation of their tech infrastructure, which has massive implications for how we actually execute IT strategy on the ground.
Key Takeaways
- A full 78% of global IT leaders are making modernization a top priority for 2026, a massive change in strategic direction.
- Cybersecurity and data management are the main reasons for these initiatives, with over 65% of leaders citing them.
- Hybrid cloud is the big one, it’s where everyone sees the most potential but also where they expect the biggest headaches.
- The skills gap is real: 55% of organizations say a shortage of talent in AI and cloud architecture is slowing them down.
- The money is finally showing up, with orgs planning to bump their IT modernization budgets by 15% on average in the next year.
Context and Background
The survey, which hit 1,200 IT decision-makers across 15 countries, confirms what we’ve all been feeling. For years, companies have been getting by with legacy systems, mostly by patching holes or bolting on new tech without fixing the underlying architecture. While that kept the lights on, it created these incredibly complex and brittle IT environments that can’t react to market shifts or integrate new stuff like generative AI.
It’s no real surprise that cybersecurity concerns are the main catalyst here, with 70% of leaders pointing to it as their primary driver for modernization. Data management and analytics are right behind at 65%. Of course they are. A fragmented IT field creates massive blind spots for security teams and turns any attempt at complete data analysis into a painful chore. When your data is spread across on-prem servers and a half-dozen different cloud platforms, good luck building a unified security front or getting any real insight out of it.
And it’s not just an internal feeling. A Reuters report projects global cybersecurity spending will hit record highs in 2025, thanks to an ever-growing threat field. That external pressure forces internal IT priorities to change, making modernization a core defensive strategy, with efficiency gains being a welcome bonus.
| Factor | Current State (Past) | Future State (2026) |
|---|---|---|
| Modernization Priority | Lower (Previous Years) | 78% of IT Leaders |
| Budget Increase | Not specified | 15% Average Increase |
| Key Drivers | Legacy system patching | Cybersecurity (70%), Data Management (65%) |
| Major Obstacle | Not specified | Talent Shortages (55%) |
| Environment Focus | Legacy systems, patching | Hybrid Cloud Environments |
Implications for IT Strategy
With IT modernization now at the top of the list, organizations are finally putting real money behind it. The survey shows a planned budget increase of 15% on average for these projects over the next year. That cash is going to flow into hybrid cloud adoption, application refactoring, and desperately needed data governance work. The biggest roadblock, though, is people. A staggering 55% of IT leaders admit that a shortage of skilled talent, especially in fields like AI development and cloud architecture, is holding them back.
The talent gap has been an issue for a while, but it’s becoming a crisis as the tech stacks we manage get more complicated. You can’t just buy new software. You need people who know how to implement, run, and optimize it properly. This forces a dual approach of upskilling your existing people while bringing in external experts or managed service providers for heavy lifting. Deciding whether to build that expertise in-house or buy it from a partner is a critical call that depends on project timelines, budgets, and how central the technology is to your business. I’m all for building internal expertise for core apps, but for specialized, one-off projects like migrating ancient mainframe workloads to the cloud, you’re usually better off bringing in people who’ve done it a hundred times before.
What’s Next
Going forward, the C-suite is going to demand measurable outcomes from these modernization projects. Leaders want to see tangible improvements in operational efficiency and a stronger security posture, plus the ability to actually innovate faster. The push toward hybrid cloud environments offers a lot of flexibility, but it also creates entirely new layers of complexity. Just trying to manage workloads across different platforms, keep data where it’s supposed to be, and maintain consistent security policies is a job that will stretch even the most experienced IT departments to their limits.
This is why enterprises will be looking for partners who can handle everything from strategy to execution and ongoing management. The integration of AI into IT operations (AIOps) will become more common, mostly as a tool to help teams get a handle on these sprawling environments. The goal is to augment your existing IT pros, freeing them up from routine maintenance and firefighting to focus on high-value strategic work. We’re about to find out which organizations can actually turn their modernization goals into a real competitive advantage over the next 12 to 18 months. If you don’t get the talent and complexity challenges sorted out, you’re going to get left behind. It’s that simple.
The Kyndryl survey is basically a wake-up call for every IT leader. You have to prioritize a smart, well-rounded modernization plan, get aggressive about solving your talent gaps, and prepare your teams for the real-world complexities of hybrid cloud and AI integration. These moves are essential for any company that wants to stay competitive, especially when you think about the ripple effects on things like global trade in 2026 and the need for businesses that can actually adapt.
What is the primary driver for IT modernization according to the Kyndryl survey?
Strengthening cybersecurity defenses against evolving threats is the main driver, with 70% of respondents citing it.
What percentage of IT leaders are prioritizing modernization in 2026?
A full 78% of global IT leaders say modernization is a top priority for their organizations in 2026.
What is the expected budget increase for IT modernization initiatives?
Organizations are planning to increase their IT modernization budgets by an average of 15% over the next 12 months.
What is a significant challenge hindering modernization efforts?
A major roadblock is the shortage of skilled talent, particularly in AI development and cloud architecture, which is a problem for 55% of organizations.
Which technology environment presents both opportunities and challenges for modernization?
Hybrid cloud environments. They’re seen as both the source of the greatest opportunities and the most significant challenges.
