A report found that neglecting technical debt in application modernization, which determines AI performance and security capabilities, increases risks and widens the gap with organizations leading the way in modernization.

Connectivity cloud company Cloudflare recently released its '2026 App Innovation Report,' which contains the results of a survey of organizational leaders around the world.

This report highlights that enterprises in APAC, North America, and EMEA, including Korea, are showing significant gaps in AI adoption performance and security capabilities depending on their level of application modernization.

According to the report, organizations that modernized their applications were three times more likely to achieve a clear ROI from AI, while those that relied on legacy systems faced a complex mix of challenges, including increasing technical debt, increased security vulnerabilities, and a shortage of development talent.

Cloudflare analyzed that “application modernization is no longer an option, but a core element of corporate competitiveness.”

The report notes that organizations that delay modernization risk not only experiencing technical inconveniences but also falling behind in the rapidly changing market.

Legacy systems make AI integration difficult and also reduce defenses against cyberattacks.

Meanwhile, leading organizations are rapidly expanding their AI capabilities based on cutting-edge infrastructure, securing growth momentum.

“A secure and modern foundation is essential for achieving real results with AI,” said Matthew Prince, CEO of Cloudflare. “Organizations that neglect modernization are more likely to be targeted by attackers, and ultimately, the Internet era will be decided by infrastructure.”

Key findings from the report include that organizations that modernized their applications were three times more likely to achieve ROI on AI-powered projects.

93% of leading organizations responded that "software updates are a key element in enhancing AI capabilities," demonstrating that up-to-date infrastructure is the foundation for maximizing AI performance.

Moreover, AI is evolving beyond simple adoption to focus on integration with existing systems.

According to research, 91% of leading organizations have already integrated AI into their existing portfolios, and 74% plan to double this level of integration within the next year. This reflects the growing adoption of AI across all business operations.

Security is not simply a defense; it's a growth engine that drives AI maturity. Organizations that simultaneously pursue security and modernization are four times more likely to reach advanced AI maturity. This demonstrates that a security strategy is an essential foundation for AI innovation.

Organizations that delayed updates experienced 85% lower infrastructure reliability and tended to modernize only after a security incident occurred. This suggests that a reactive approach increases costs and risks.

While 96% of organizations struggle with complex technology stacks, 85% of leading organizations are improving operational efficiency and speed by eliminating redundant tools and cleaning up shadow IT. The trend of simplification strategies leading to competitiveness was clearly evident.

In this report, Cloudflare emphasized that application modernization is a key strategy that determines overall corporate competitiveness, including AI adoption performance, security capabilities, and operational efficiency.