Market Overview

The UK cloud computing market size was valued at USD 27.48 Billion in 2024 and is expected to reach USD 97.21 Billion by 2033, exhibiting a CAGR of 14.92% during the forecast period 2025-2033. This growth is mainly driven by the rising demand for scalable and affordable IT infrastructure, the widespread adoption of hybrid and multi-cloud architectures, and ongoing digital transformation. The market is further supported by government investments and cloud-friendly policies fostering operational efficiency and agility in the UK digital economy. 

Study Assumption Years

• Base Year: 2024
• Historical Year/Period: 2019-2024
• Forecast Year/Period: 2025-2033

UK Cloud Computing Market Key Takeaways

• The market size in 2024 was USD 27.48 Billion.
• The market is projected to grow at a CAGR of 14.92% from 2025 to 2033.
• The forecast period is 2025-2033.
• London currently dominates the UK cloud computing market due to high demand for elastic IT infrastructure and digital transformation.
• Government investments and cloud-friendly policies significantly support market expansion.
• Growing focus on data sovereignty and compliance with UK GDPR drive cloud adoption.
• The spread of AI and ML technologies increases the demand for scalable cloud infrastructure.
• SaaS leads the market with 55.9% share in 2024, driven by flexibility and ease of deployment.

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Market Growth Factors

In the UK, a key driver for the cloud computing market growth has been the increasing importance of data sovereignty and regulations․ The UK General Data Protection Regulation (UK GDPR) requires organizations to store and process personal data in compliance within national boundaries․ Some cloud vendors have responded by setting up data centers in the UK, so that a business has control over data residency, compliance, transparency, and ultimately the trust its customers and regulators have in its use of data․ In addition, sector-specific regulations in health care, finance, and government administration advance the use of secure cloud architectures using encryption, access controls, and auditing․

AI and ML development is also helping to drive the UK cloud computing services market․ There is a growing need for high-performance computing as data-driven decision-making becomes commonplace and organizations need to access and analyze large amounts of data․ Due to their ability to support real-time data processing, model training, and the hosting of AI/ML applications without the need for large capital expenditures, cloud datacentres have become popular․ For example, in September 2024, AWS announced that it is investing £8 billion over five years to expand its datacentres in the UK․ AI-as-a-Service embedded in clouds allows organizations to utilize powerful capabilities for predictive maintenance, customer behavior, and operations optimization at a fraction of the cost․

Growing demand for scalable, flexible and cost-effective IT solutions is driving cloud computing growth in the UK․ At the 2024 Global Investment Summit the UK Government announced a further £25 billion investment in the national data center network, taking investment to £39 billion in six months according to the government․ Similar to other forms of cloud computing, cloud-based IT services involve less capital expenditure than on-premises IT equipment․ As organizations tend to pay for what they use, cloud migration has become attractive to organizations of all sizes, from small and medium-sized businesses to big corporations, in order to achieve technological innovation and competitive advantage․

Market Segmentation

Analysis by Service:

• Infrastructure as a Service (IaaS)
• Platform as a Service (PaaS)
• Software as a Service (SaaS): Held a 55.9% share of the UK market in 2024, leading due to demand for flexible, subscription-based software models which reduce initial expenditure and simplify management. SaaS supports essential applications like CRM, ERP, and collaboration tools, favored across education, healthcare, retail, and professional services sectors.

Analysis by Deployment:

• Public: The most prevalent deployment model due to cost-effectiveness, versatility, and accessibility. It is favored by public sector organizations and businesses that require rapid resource scaling without heavy capital expenditure. Public cloud promotes agility, innovation, and easy deployment, and is particularly used by small and medium businesses for automation and competition.
• Private
• Hybrid

Analysis by Workload:

• Application Development and Testing
• Data Storage and Backup: A significant segment as businesses prioritize data security, disaster recovery, and compliance. Cloud storage offers scalable capacity and redundancy, critical for regulated sectors like healthcare and finance. Providers enhance features with encryption, tiered storage, and automated backups.
• Resource Management
• Orchestration Services
• Others

Analysis by Enterprise Size:

• Large Enterprises: Accounted for 58.6% of the market share in 2024, reflecting their substantial IT requirements and investment. Large firms utilize cloud platforms for managing vast data processing, international operations, and advanced analytics, including AI and ML deployments.
• Small and Medium Enterprises

Analysis by End-Use:

• BFSI: Constituted 21.7% of the market in 2024, driven by the sector's ongoing digital transformation. Cloud technology aids in automating operations, enhancing customer experience, meeting compliance, and supporting fintech innovations. Regulatory acceptance encourages migration from legacy systems.
• IT and Telecom
• Retail and Consumer Goods
• Manufacturing
• Energy and Utilities
• Healthcare
• Media and Entertainment
• Government and Public Sector
• Others

Regional Insights

London dominates the UK cloud computing market, supported by a dense concentration of financial institutions, multinational corporations, and government bodies. The city’s extensive investments in data center infrastructure, robust regulatory environment, skilled IT workforce, and high-speed connectivity create an ideal ecosystem for cloud providers. London leads technology adoption, digital transformation, and cloud usage across multiple sectors, emphasizing hybrid and multi-cloud solutions for resilience and agility.

Recent Developments & News

In May 2025, EY launched its Integrated Finance Managed Service in the UK, combining SAP S/4HANA Cloud with AI functions for scalable, compliant business operations. In March 2025, Google Cloud introduced "Gemini for the United Kingdom," featuring the Gemini 1.5 Flash model with UK data residency, an AI enterprise platform, and up to GBP 280,000 in cloud credits for AI startups. January 2025 saw CoreWeave open its first UK data centers in London Docklands and Crawley, equipped with NVIDIA H200 GPUs and Quantum-2 networking, aligned with a GBP 1 billion UK AI infrastructure investment.

Key Players

• Wiz
• AWS
• EY
• Google Cloud
• CoreWeave

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