Modernizing Infrastructure: A Key to Middle East’s Sustainable Growth

Pieter W. Bil, Senior Vice President and Managing Director for Kyndryl Middle East and Africa, highlights the pressing need for enterprises to replace legacy technology to mitigate security risks in a rapidly digitizing world. In the face of an increasingly volatile cyber threat landscape, resilience has evolved from being a strategic advantage to an essential capability. While much attention is given to cybercriminals’ sophisticated tactics, a less discussed but equally dangerous threat lurks in the form of outdated IT infrastructures. These aging systems pose significant risks, compromising not only security but also operational efficiency and competitiveness.

According to the latest Kyndryl Readiness Report, confidence in IT resilience is high, with 92% of business leaders in the UAE and Saudi Arabia expressing optimism. However, only 43% believe their systems are truly future-ready. This stark gap underscores the urgency of addressing legacy systems to meet the rising demand for cyber resilience. Outdated hardware and software are not only costly to maintain but also leave organizations vulnerable to cyberattacks—especially in today’s climate, where disruptions can have devastating consequences. To illustrate, relying on legacy infrastructure is akin to defending a fortress with crumbling walls; even the strongest security measures are rendered ineffective if the underlying foundation is weak.

Modernizing legacy systems offers enterprises an opportunity to achieve financial benefits, foster innovation, and build true cyber resiliency—the ability to protect, prevent, withstand, and recover from adverse events. However, as organizations advance their modernization efforts, certain threats remain unavoidable. Leaders must fortify defenses, much like securing doors and windows, while addressing the foundational cracks that can undermine the entire structure. The longer enterprises cling to outdated technologies, the greater the security risks become.

The risks of relying on outdated infrastructure are amplified by the rapidly growing Middle East ICT market, which Frost & Sullivan projects will reach $95.05 billion by 2025, driven by increased adoption of technologies like AI, machine learning, and IoT. During the swift pivot to remote work in recent years, many companies hastily migrated to the cloud without structured planning. This led to an accumulation of technical debt as organizations layered quick fixes on already complex IT estates, leaving legacy technologies neglected. Such practices expose businesses to unnecessary risks, as older systems often lack critical updates, including security patches. Like driving decades-old cars long after manufacturers have ceased making parts, companies face mounting vulnerabilities as these outdated assets reach end-of-life.

A McKinsey analysis highlights how legacy infrastructure can hinder competitiveness, delaying time to market and increasing operational costs. Conversely, the analysis found that modernized fintech platforms can reduce operating costs to as low as 10% of those for traditional banks. Beyond financial benefits, legacy systems also pose a threat due to their outdated encryption standards, especially with the advent of quantum computing, which could render traditional encryption obsolete. Additionally, legacy systems often rely on older programming languages, exacerbating the mainframe skills gap and further slowing modernization efforts.

Government regulations in the region are accelerating the push for modernization. In the UAE, the Telecommunications and Digital Government Regulatory Authority (TDRA) has implemented the UAE Information Assurance Regulation, establishing stringent security standards for information assets across all sectors. In Saudi Arabia, the SAMA Cyber Security Framework mandates comprehensive cybersecurity measures for banks and financial institutions, while the Cyber Threat Intelligence (CTI) Principles provide guidelines for identifying and mitigating cyber threats effectively. These regulations reflect a broader commitment to creating secure and trusted digital environments.

To address legacy technology challenges, enterprises must first identify and catalog outdated assets, assess their criticality to business operations, and determine acceptable levels of downtime. While modernization efforts may cause short-term disruption, the long-term benefits far outweigh the costs. Companies must prioritize hardware refresh cycles, as hardware failures are among the most common causes of business disruption. Enforcing strict patch management policies and conducting regular health checks on mainframe systems are essential steps.

Broader mainframe modernization can enable greater agility, especially for organizations that rely on these systems for mission-critical operations. Many companies are adopting a hybrid approach to modernization, balancing legacy infrastructure with modern solutions to achieve increased profitability and operational efficiency. While the path forward may seem daunting, legacy systems represent an opportunity to transform a liability into a strategic asset.

The time to act is now. Enterprises must proactively replace outdated systems to protect against emerging threats and secure a competitive advantage in a digital-first world. By modernizing legacy technologies, organizations can ensure resilience, drive innovation, and turn potential vulnerabilities into sources of strength, setting the stage for sustained growth and success in an increasingly complex digital landscape.