AI helps agencies address talent gaps while keeping mission-critical operations secure, ISG Provider Lens^® report says

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STAMFORD, Conn. -- (Business Wire)

Organizations in the U.S. public sector are adopting AI-enabled solutions to modernize and sustain mainframe environments, according to a new research report published today by Information Services Group (ISG) (Nasdaq: III), a global AI-centered technology research and advisory firm.

The 2026 ISG Provider Lens® Mainframe ― Services and Solutions report for the U.S. Public Sector finds that agencies are rethinking mainframe strategies as the December 2026 deadline for liquidating pandemic-era funding approaches. Many organizations are balancing the need to maintain mission-critical systems with pressures to reduce costs, improve efficiency and ensure long-term sustainability.

“AI is helping public-sector organizations address longstanding mainframe challenges while preventing disruption of essential government services,” said Nathan Frey, ISG partner and lead, U.S. Public Sector. “It enables new strategies for extending the useful lives of critical systems while improving operational efficiency.”

U.S. public agencies seeking mainframe modernization are using AI to document legacy applications and extract business rules, the report says. This helps them understand complex, poorly documented systems that have been maintained for decades by staff members who, in many cases, are now retiring. Improved visibility into application logic reduces these organizations’ reliance on scarce expertise and paves the way to more efficient maintenance. By making legacy environments easier to navigate, AI tools also reduce training requirements for new staff.

Many organizations are adopting targeted modernization strategies that focus on business outcomes rather than broad transformation models, ISG says. Agencies are deciding which applications to keep on mainframes, integrate with cloud environments or remove from legacy systems. Secure APIs are enabling connections between mainframes and cloud platforms, providing access to critical data for analytics and AI training. This approach improves flexibility while maintaining strict security requirements.

Cost pressures and evolving security risks are shaping adoption decisions across the public sector, the report says. Agencies are embracing hybrid architectures and selective offshoring of non-sensitive workloads to improve efficiency. Modern technologies such as microservices and DevOps help them make this transition while preserving control over sensitive data. At the same time, organizations are strengthening defenses against growing cybersecurity threats, including those associated with AI and quantum computing.

“Public sector organizations are facing a disruptive funding environment and shrinking technical expertise,” said Peter Crocker, lead author of the report. “Service providers and AI offer a lifeline to help agencies avoid failures of their mission-critical systems.”

The report also explores other mainframe trends affecting the U.S. public sector, including the use of mainframes as platforms for AI processing and the growing role of AI in building test cases to evaluate application migration techniques. It includes one quadrant with a global scope, covering Mainframe Application Modernization Software providers.

For more insights into the mainframe-related challenges faced by the U.S. public sector, along with ISG’s advice for addressing them, see the ISG Provider Lens^® Focal Points briefing here.

The report for the U.S. Public Sector evaluates the capabilities of 48 providers across four quadrants: Mainframe Technology Consulting, Mainframe as a Service, Application Modernization Services and Mainframe Application Modernization Software (Global).

The report names DXC Technology, Ensono, TCS and Wipro as Leaders in three quadrants each. It names Accenture, Capgemini, Infosys, Kyndryl and NTT DATA as Leaders in two quadrants each.

Amdocs, Averisource, AWS, FNTS, Google, Heirloom Computing, mLogica, Rocket Software, TmaxSoft, TSRI and Unisys are named as Leaders in one quadrant each.

In addition, Amdocs, Atos, CloudFrame and Cognizant are named as Rising Stars — companies with a “promising portfolio” and “high future potential” by ISG’s definition — in one quadrant each.

In the area of customer experience, mLogica is named the global ISG CX Star Performer for 2026 among Mainframe Services providers. The provider earned the highest customer satisfaction scores in ISG's Voice of the Customer survey, part of the ISG Star of Excellence™ program, the premier quality recognition for the technology and business services industry.

Customized versions of the report are available from DXC Technology, FNTS and Karsun Solutions.

The 2026 ISG Provider Lens^® Mainframe ― Services and Solutions report for the U.S. Public Sector is available to subscribers or for one-time purchase on this webpage.

About ISG

ISG (Nasdaq: III) is a global AI-centered technology research and advisory firm. A trusted partner to more than 900 clients, including 75 of the world’s top 100 enterprises, ISG is a long-time leader in technology and business services that is now at the forefront of leveraging AI to help organizations achieve operational excellence and faster growth. The firm, founded in 2006, is known for its proprietary market data and research, in-depth knowledge and governance of provider ecosystems, and the expertise of its 1,500 professionals worldwide working together to help clients maximize the value of their technology investments.

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Contacts:

Press Contacts:

Laura Hupprich, ISG
+1 203-517-3100
laura.hupprich@isg-one.com

Eric Arvidson, Matter Communications for ISG
+1 978-518-4542
isg@matternow.com

Source: Information Services Group, Inc.