UK Cybersecurity Market Size & Share Analysis - Growth Trends & Forecasts

UK Cybersecurity Market Trends and Insights

Escalating Digitalisation and Hybrid-Work Attack Surface

Hybrid operating models now prevail across 68% of UK businesses, dispersing endpoints and pushing identity-centric security to the foreground. ^{[1]National Cyber Security Centre, “Zero Trust Architecture Design Principles,” ncsc.gov.uk} The attack surface widens further as Industry 4.0 intersects operational technology, prompting 80% of manufacturers to log material security incidents during 2024. ^{[2]Department for Science, Innovation & Technology, “Cyber Security Sectoral Analysis 2025,” gov.uk} Secure Access Service Edge adoption accelerates in this context, enabling policy enforcement independent of location and underpinning the growth trajectory of the UK cybersecurity market.

Surge in Ransomware and Nation-State Threats

Forecasts indicate 341 ransomware strikes in the 12 months to August 2025, reflecting a shift toward double-extortion tactics that threaten critical supply chains. Healthcare breaches, such as the Synnovis laboratory outage, illustrate systemic risk and catalyse new supplier charters mandating multifactor authentication. The heightened threat climate is driving wider adoption of Extended Detection and Response, reinforcing the centrality of the UK cybersecurity market for sovereign resilience.

Growing UK Compliance Mandates (Telecom Security Act, DORA Alignment)

The Telecommunications Security Act, the Digital Operational Resilience Act linkage, and the incoming Cyber Security and Resilience Bill collectively broaden regulatory coverage to roughly 1,000 additional service providers, enforcing 24-hour incident notifications. Financial institutions face steep compliance costs—47% spent over EUR 1 million in the past two years—which is reshaping vendor roadmaps and fuelling automated reporting investments across the UK cybersecurity market.

Rapid Adoption of AI-Driven Security Analytics

AI now permeates threat-hunting, behaviour analytics, and autonomous response. The government’s January 2025 AI Cyber Security Code of Practice lays out 13 principles to counter data-poisoning and model-obfuscation risks. Cross-sector organisations integrate machine learning to triage alerts, cutting mean time to detect and strengthening long-term competitiveness within the UK cybersecurity market.

Acute Cyber-Skills Deficit

The domestic talent pool contracted 4.9% to 349,360 practitioners in 2024, widening a capability gap that now spans cloud security, AI governance, and incident response. ^{[3]ISC2, “Cybersecurity Workforce Growth & Skills Gap Insights,” isc2.org} Government initiatives such as CyberFirst have generated measurable social value yet fall short of the 11,600 new specialists required annually, constraining deployments and lifting salary inflation within the UK cybersecurity market.

High Total Cost of Ownership for Advanced Platforms

Comprehensive security suites often exceed SME budgets, with firms earmarking up to 40% of IT spend to retire technical debt rather than fund next-generation controls. Managed Detection and Response subscriptions partly offset capital barriers, but platform integration complexity still slows adoption across price-sensitive tiers of the UK cybersecurity market.

Segment Analysis

By Offering: Services Drive Innovation Despite Solutions Dominance

Solutions held 67.2% of 2024 revenue, underlining their foundational role in endpoint, network, and data protection. However, services—led by Managed Detection and Response—are projected to climb at a 13.1% CAGR as organisations outsource monitoring to overcome talent shortages. The UK cybersecurity market size for the services slice is thus poised to outpace product revenue growth to 2030. Vendors are bundling consultancy and integration with licences, generating annuity streams and cementing customer lock-in.

In parallel, hybrid monetisation models blur lines between hardware, software, and ongoing support. Sophos’s USD 859 million Secureworks acquisition exemplifies how scale vendors absorb service specialists to deepen threat-hunting capabilities and raise switching costs, increasing consolidation momentum inside the UK cybersecurity market.

By Deployment Mode: Cloud Accelerates Security Transformation

Cloud deployments represented 64.1% of the UK cybersecurity market share in 2024 and are set for a 12.2% CAGR, riding the surge in SaaS, IaaS, and zero-trust edge migrations. SASE architectures merge WAN optimisation with cloud-native security, enabling dynamic policy enforcement for remote work and shaping demand curves across the UK cybersecurity market.

On-premise solutions persist in sectors with strict data-sovereignty rules or legacy dependencies. Hybrid models now offer granular workload placement, allowing regulated entities to retain sensitive processing on-site while consuming cloud-delivered analytics. This nuanced pattern ensures the UK cybersecurity market remains diverse in deployment preferences even as cloud leadership consolidates.

By Organisation Size: SMEs Embrace Managed Security Models

Large enterprises delivered 68.1% of 2024 spending, yet SMEs constitute the fastest-growing cohort at a 13.8% CAGR. Virtual CISO services, pay-as-you-go MDR, and modular cybersecurity mesh architecture collectively lower entry thresholds, broadening the addressable UK cybersecurity market. Government-backed Resilience Centres and new seed-stage funds—such as Osney Capital’s £50 million vehicle—further stimulate SME-tailored innovation.

Persistent skills gaps mean 43% of SMEs lack adequate internal security capacity, elevating the appetite for subscription-based offerings. As regulatory scrutiny now extends to their supply-chain roles, SMEs cannot defer investment, ensuring expanding depth and breadth within the UK cybersecurity market.

By End User Vertical: Healthcare Accelerates Digital Security Investment

Banking, financial services, and insurance captured 23.7% of 2024 turnover, driven by DORA alignment and high-value data protection. Conversely, healthcare will log the sharpest 12.3% CAGR as electronic health record expansion intersects with ransomware exposure. These twin verticals anchor baseline resilience spending that underpins the overall UK cybersecurity market size trajectory.

Manufacturing’s 80% incident rate underscores OT attack volumes and fuels adoption of specialised network-segmentation products. Telecom operators invest to secure 5G under the Telecommunications Security Act, while utilities harden grids against nation-state actors. Government and defence allocations rise in parallel with the new CyberEM Command, together expanding vertical diversification across the UK cybersecurity market.

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

By Security Type: Cloud Security Transforms Enterprise Protection

Endpoint and IoT security maintained a 21.11% share in 2024 due to device sprawl and the Product Security and Telecommunications Infrastructure Act’s ban on default passwords. Cloud security is forecast to notch a 12.8% CAGR, gaining momentum from containerised workloads, serverless adoption, and governance requirements.

Identity and Access Management underpins hybrid cooperation, and network security aligns with zero-trust segmentation guidance from the NCSC. Data security advances via Continuous Threat Exposure Management, giving enterprises proactive control as the UK cybersecurity market matures toward predictive risk management.

Geography Analysis

England remains the core of the UK cybersecurity market, supported by London’s finance cluster and accelerating regional hubs in Manchester, Liverpool, and Oxford. National Cyber Strategy funding and a EUR 100 billion infrastructure pipeline strengthen connectivity, with property advisors forecasting one million sq ft of new office uptake by cybersecurity firms over five years. ^{[4]Savills, “Cybersecurity firms set to take 1m sq ft of UK office space,” savills.je} This spatial diffusion drives employment while concentrating venture and M&A flows inside the UK cybersecurity market.

Scotland’s growth hinges on strong university programmes in Edinburgh and Glasgow, combined with devolved government grants targeting digital innovation. The region nurtures startups focused on AI threat analytics and sovereign cloud assurance, broadening geographic diversity.

Northern Ireland leverages dual UK-EU access; Belfast’s EUR 1 billion City Deal intends to create 20,000 new tech roles, many in security disciplines. Queen’s University’s Centre for Secure Information Technologies anchors R&D and spin-outs that address niche e-crime forensics and post-quantum encryption, reinforcing regional dynamism across the UK cybersecurity market.

Wales positions itself via the EUR 13.8 million Cyber Innovation Hub aimed at spinning out 25 startups by 2030, supported by Cardiff University’s recognised excellence in cyber-forensics research. Collaborative initiatives with European partners mitigate post-Brexit funding gaps and emphasise skills development, ensuring Wales contributes sustained volume to the UK cybersecurity market.