AI shifts public sector strategies on mainframes

State and local governments in the U.S. are reassessing mainframes as strategic assets, looking toward Artificial Intelligence (AI) models to manage sensitive data effectively, according to a report by Information Services Group. The report highlights that AI advancements are making mainframes easier and more cost-effective to maintain and run workloads, particularly in the public sector. The 2025 ISG Provider Lens™ report indicates a resurgence of interest in mainframes due to AI capabilities, with agencies considering whether to reengineer their systems or migrate to cloud solutions. Nathan Frey, ISG partner, noted that agencies often revisit their roadmaps when weighing potential AI benefits against the risks of transitioning long-standing data systems. Public sector agencies are exploring how to optimize mainframe applications and access data efficiently for AI implementations. AI technologies, including Generative AI (GenAI), can facilitate software development and documentation processes, potentially alleviating the skills gap within mainframe maintenance by assisting developers with code and testing. The report outlines rising demand from public sector agencies for mainframe services, prompting more provider engagement in the market. As government agencies face budget constraints, AI could aid in automating various functions, increasing mainframes' appeal as robust processing systems. Enhanced policies regarding data management and offshoring are in development. Hybrid cloud architectures are evolving, allowing for more flexible data management strategies while adhering to compliance regulations. DevOps methodologies now offer opportunities to segregate sensitive data, providing safer offshore storage options for less critical information. The growing number of service providers specializing in mainframe solutions signifies increasing investment in modernization strategies across U.S. state and local agencies. The report also identifies partnerships among agencies to tackle mainframe challenges together and discusses the emerging training initiatives by service providers to help organizations manage transitions effectively. The report evaluates the capabilities of 29 providers across four categories in mainframe services and identifies Wipro as a leader in all quadrants. Other notable mentions include DXC Technology, Kyndryl, and Thermal Control Subsystem (TCS), each recognized for leadership in three categories, while UST received accolades for high customer satisfaction in mainframe services.