Cloudflare 2026 report on application modernisation

In their 2026 App Innovation Report, Cloudflare, a connectivity cloud solutions provider, identifies differences between companies that prioritise application modernisation and those managing technical debt. The report notes that businesses updating their tech stacks are advancing in artificial intelligence (AI) and cybersecurity, while others face increasing challenges in these areas.

Application modernisation is more than an IT goal; it plays a significant role in supporting competitiveness across industries. Enterprises that do not modernise may experience slower adoption of newer technologies. Legacy systems can limit AI development and increase exposure to cybersecurity risks.

The report finds that organisations performing well are investing in growth and talent acquisition. However, organisations with high maintenance expenses may spend a large portion of their IT budgets on operational upkeep rather than innovation.

Matthew Prince, CEO and co-founder of Cloudflare, emphasised, “In order to succeed with AI, having a modern and secure foundation is non-negotiable. This report made clear that organisations who prioritise modernisation are able to innovate at speed and scale, while those who don’t are likely to become a threat actor’s next target."

Key insights from Cloudflare's report include:

• Progressive Infrastructure: Companies that modernise their operational frameworks are three times more likely to witness a return on investment (ROI) for AI technologies. 93% of leaders attribute their AI success to software updates.
• Shift in AI Utilisation: While AI adoption remains imperative, emphasis is now on deeper integrations, with 91% of leading companies embedding AI into their existing systems and 74% planning increased integration initiatives.
• Security Integration: Aligning security practices with modernisation goals enhances AI maturity. Organisations prioritising this alignment are four times more likely to reach advanced AI maturity levels.
• Impact of Delaying Updates: Delaying tech updates is consequential. Non-modernised businesses reported 85% less confidence in their infrastructure, often reacting only post-security breaches.
• Consolidation of Tech Tools: Simplification is key. A prevalent challenge among 96% of companies is complex tech stacks which leaders are actively streamlining — 85% are eliminating redundant tools to drive efficiency.

Conducted in collaboration with Qualtrics, the report surveyed 2,351 leaders across NAMER, EMEA, and APAC regions. Using qualitative assessments from directors, and C-suite executives within IT and engineering, the findings present a snapshot of the tech landscape and the role of modernisation therein.