UK Cloud Computing Market Size & Share Analysis - Growth Trends And Forecast (2025 - 2030)

UK Cloud Computing Market Trends and Insights

Cloud-First procurement and G-Cloud framework

The Crown Commercial Service awarded cloud contracts worth GBP 6.5 billion under G-Cloud 14, shifting from 12-month to 36-month terms to reduce administrative burden and encourage supplier investment.^{[2]Crown Commercial Service, “G-Cloud 14 – CCS,” crowncommercial.gov.uk} Flagship deals such as the Department for Work and Pensions’ GBP 710 million Oracle-IBM agreement consolidate HR and finance systems, paving a template for cross-departmental data sharing. Mandatory science-based carbon targets embedded in these contracts align public spending with sustainability, setting de-facto standards later mirrored by private buyers.

AI/ML, 5G and IoT workload growth

The government’s AI Opportunities Action Plan targets a 20-fold increase in public compute capacity by 2030, spurring hyperscalers to deploy GPU-rich clusters across new local zones.^{[3]Data Center Frontier, “UK Government’s Bold AI Plan,” datacenterfrontier.com} Edge-ready 5G networks slash latency for autonomous systems and industrial automation, while NHS pilots show ambient-voice documentation working three to five times faster than keyboard input. Nebius’s Blackwell Ultra deployment illustrates the specialised hardware profile required for next-gen AI services.

Hybrid / multi-cloud compliance push

Financial-services and healthcare boards increasingly embrace multi-vendor strategies to meet data-sovereignty and operational-resilience mandates. Legal and General cut total cost of ownership by 50% after migrating core workloads to Azure SQL Database while meeting FCA security thresholds.^{[4]Microsoft, “Legal and General increases safety, security, and business agility with Azure SQL DB,” microsoft.com} The Data (Use and Access) Act 2025 further accelerates API-first architectures to support real-time data portability.

Hyperscale data-center build-out

Amazon’s planned GBP 40 billion UK investment from 2025-27 marks the largest tech-infrastructure outlay in national history. Critical-national-infrastructure status has streamlined approvals, catalysing projects such as CloudHQ’s GBP 1.9 billion Didcot campus and Microsoft’s GBP 106 million Leeds facility. Regional local-zone roll-outs bring compute closer to end-users, supporting latency-sensitive trading and manufacturing workloads.

Escalating cyber-attacks and data-sovereignty worries

Forty-three percent of UK firms reported cloud-related breaches in 2024, heightening caution around sensitive workload migration. A GBP 2.3 million fine on a genomics platform underscored tougher enforcement under updated privacy rules, prompting enterprises to insist on UK-resident data stores. Pending “Secure-by-Default” requirements for public-sector clouds could limit vendor options and elongate procurement cycles.

Cloud-skills gap and FinOps cost pressures

Research from the University of Birmingham warns that 380,000 job-equivalent positions could remain unfilled, risking a GBP 27.6 billion economic hit by 2030. Wage inflation for certified engineers and rising multi-cloud complexity elevate operating costs, especially for SMEs lacking dedicated FinOps expertise. Government spending of GBP 1.1 billion on advanced-skills training will ease long-term shortages but offers little near-term relief.

Segment Analysis

By Cloud Type: Hybrid Solutions Drive Enterprise Transformation

Public environments captured 70.20% of the UK cloud computing market share in 2024, reflecting faith in hyperscale security baselines and regulatory certifications. Hybrid architectures, however, are accelerating at a 20.0% CAGR as regulated industries retain sensitive data on-premises while flexing burst workloads to the cloud. This shift supports the UK cloud computing market’s pivot toward resilient multi-cloud governance. Vodafone’s USD 1.5 billion ten-year partnership with Microsoft shows large telcos closing legacy data centers while embracing Azure regions for core operations.

Hybrid adoption also benefits from vendor concentration scrutiny: the CMA’s portability-remedy proposals are expected to lower switching friction, encouraging boards to hold dual or triple cloud contracts. Large banks now routinely tier workloads to balance latency and compliance, while NHS trusts use edge gateways to synchronise anonymised research datasets with public-cloud analytics. Together, these patterns entrench hybrid as the de-facto enterprise default inside the UK cloud computing market.

Note: Segment shares of all individual segments available upon report purchase

By Organization Size: SME Growth Outpaces Enterprise Adoption

Large enterprises held 68.70% revenue in 2024, underpinned by multi-year digital transformation roadmaps and deep IT benches. Yet SMEs are expanding faster at 20.90% CAGR, catalysed by simplified SaaS onboarding and government vouchers that cut entry costs. The SME Digital Adoption Taskforce advocates AI-powered helpdesks and standard e-invoicing to remove complexity, a blueprint that should unlock new subscriptions across the UK cloud computing market.

Cash-flow-aligned consumption pricing appeals to smaller firms, but skills shortages increase reliance on managed service partners. Hyperscalers have responded with SME-specific bundles that package infrastructure, productivity apps, and security monitoring. By diversifying channel partnerships, providers aim to embed themselves early in fast-growing businesses, deepening the customer pool that underpins the UK cloud computing market.

By End-user Industry: Healthcare Transformation Accelerates Digital Adoption

BFSI retained a 24.70% slice of the UK cloud computing market size in 2024, the outcome of early adoption and robust compliance frameworks. Healthcare is the breakout vertical, forecast to climb at a 23.50% CAGR through 2030 as every NHS trust races to meet the March 2026 electronic-patient-record deadline. Ambient-voice and AI triage systems ease clinician workloads, while strict residency rules keep diagnostic data inside sovereign zones, supporting vendor diversification.

Manufacturing, retail, telecom, and government follow close behind, each with sector-specific catalysts such as 5G network function virtualisation or omnichannel commerce analytics. Flexible PaaS tools let developers embed machine-learning models directly into line-of-business workflows, strengthening cloud stickiness. These sectoral dynamics collectively reinforce robust demand across the UK cloud computing market.

Note: Segment shares of all individual segments available upon report purchase

By Service Model: Platform Services Enable AI Innovation

SaaS accounted for 45.80% of 2024 spend, but PaaS is growing quicker at 23.70% CAGR as enterprises seek integrated data-engineering and model-training stacks. Microsoft Fabric’s addition of 21,000 paying UK customers highlights appetite for single-pane analytics workspaces. The rising dominance of developer-centric services is shifting value creation away from raw infrastructure toward higher-margin platforms, broadening monetisation options inside the UK cloud computing market.

IaaS remains critical for compute-intensive AI workloads, while BPaaS gains traction for back-office automation. Lloyds Banking Group cut mortgage-income-verification times from days to seconds after moving 80 machine-learning models onto Vertex AI, illustrating how sector leaders capture speed advantages via platform capabilities.

Geography Analysis

England dominated the UK cloud computing market in 2024 with an 84.90% share, driven by London’s finance cluster and a dense ecosystem of hyperscale data centers positioned near international fiber landing sites. High-consumption segments such as algorithmic trading and e-commerce anchor demand for sub-millisecond latency, reinforcing provider preference for London and the wider South-East. Nonetheless, land scarcity and power-availability constraints are prompting operators to favour satellite facilities in the Thames Valley and East Midlands.

Northern Ireland is the fastest-growing region, tracking a 19.90% CAGR to 2030 as renewable-energy availability and lower operating costs entice new builds. Government designation of AI Growth Zones channels incentives toward Belfast and Londonderry, attracting sovereign-cloud investments serving public-sector workloads. Scotland leverages abundant wind capacity and robust academic research to court energy-efficient data-center projects tied to its GBP 206 million NHS cloud-integration program.

Wales shows steady, if slower, expansion as Cardiff’s fintech hub matures and local councils migrate citizen-service portals to SaaS platforms. Across the four nations, streamlined planning laws and critical-infrastructure status reduce deployment barriers, while regional agencies compete on green-power tariffs and skills grants. This diffusion of capital supports national resilience and broadens addressable workloads across the UK cloud computing market.