Market Overview

The UK cloud computing market size was valued at USD 27.48 Billion in 2024 and is projected to reach USD 97.21 Billion by 2033, exhibiting a CAGR of 14.92% during the forecast period 2025-2033. London is the leading regional hub, driven by growing demand for elastic and affordable IT infrastructure, remote work, and ongoing digital transformation. The development of hybrid and multi-cloud architectures and supportive government investments further contribute to market growth. For more details, visit the UK Cloud Computing Market. 

Study Assumption Years

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

UK Cloud Computing Market Key Takeaways

The UK cloud computing market size was USD 27.48 Billion in 2024 with a CAGR of 14.92% during 2025-2033.
The Software as a Service (SaaS) segment held the largest market share, accounting for 55.9% of the market in 2024.
Large enterprises dominated with 58.6% market share in 2024 due to higher investments and complex IT needs.
The BFSI sector accounted for 21.7% of the market in 2024, driven by digital transformation and regulatory compliance demands.
London is the dominant regional market hub for cloud computing in the UK, benefiting from a dense financial and technological ecosystem.

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Market Growth Factors

The key drivers for the UK cloud computing market are mainly about increasing focus on data sovereignty and regulatory compliance. With the enforcement of UK General Data Protection Regulation or UK GDPR, organizations are compelled to store and process data in compliance with national laws. Cloud providers, in turn, have responded through the establishment of data centers within the UK to ensure that data residency lays a foundation of transparency and trust both from customers and regulators. Specific sector regulations, on the other hand, have driven health and finance sectors, as well as public administration, to adopt compliant cloud infrastructures equipped with encryption, access control, and auditing capabilities.

Another major growth driver can be attributed to the full-scale dissemination of AI and ML. Clouds provide elastic computational resources necessary for real-time data processing, training, and deployment of AI models without the need for any investments into capital on-premise systems. In September 2024, AWS announced that it would invest £8 billion over the next five years to further expand UK data centers, which supports the wide-scale adoption of AI across leading businesses and government agencies. Integrating AIaaS into a cloud environment enhances cost-efficient deployment of analytics applications by fostering use cases such as predictive maintenance and customer behavior analytics.

The growing demand for scalable and affordable IT solutions is also fuelling the market. Further confirming the role of cloud computing in economic and technological development, the UK government pledged an additional £25 billion investment in national data centre infrastructure in 2024. The elastic, pay-as-you-go model of cloud computing allows businesses to dynamically scale operational resources, avoiding unnecessary capital expenditures and therefore minimizing operational costs. Such flexibility provides both small and large enterprises with opportunities to minimize excess capacity and streamline their financial performance better. Digital transformation efforts and the rise of remote work further consolidate the important position occupied by cloud computing in the UK's IT landscape.

Market Segmentation

By Service:

Infrastructure as a Service (IaaS): Noted as a primary cloud service offering.
Platform as a Service (PaaS): Provides cloud platforms for deploying applications.
Software as a Service (SaaS): Leading segment with 55.9% market share in 2024; enables subscription-based software models reducing up-front costs. SaaS supports CRM, ERP, and collaboration applications and is favored across sectors like education, healthcare, retail, and professional services.

By Deployment:

Public Cloud: Most prevalent deployment mode due to cost-effectiveness and scalability. Supports rapid resource scaling and on-demand computing for businesses and public sector organizations. Especially utilized by SMEs to automate processes and maintain competitiveness. Facilitates integration of AI, ML, and big data analytics.

By Workload:

Data Storage and Backup: Major segment emphasizing data security, disaster recovery, and compliance. Provides scalable storage capacity and rapid recovery solutions vital for regulated sectors such as healthcare and finance.

By Enterprise Size:

Large Enterprises: Controlled 58.6% market share in 2024, reflecting robust investments and complex infrastructure needs. Early adopters of AI, ML, and data lakes through cloud.

By End-Use:

Banking, Financial Services, and Insurance (BFSI): Accounted for 21.7% market share in 2024. Drivers include automation, customer experience improvement, regulatory requirements, fintech technology adoption, and cloud-native architecture.

Regional Insights

London dominates the UK cloud computing market, driven by its concentration of financial institutions, multinational firms, and government bodies. The city benefits from extensive investments in data center infrastructure, a robust regulatory framework, and skilled IT professionals. London leads in cloud adoption, digital innovation, and demand for hybrid and multi-cloud solutions, cementing its position as the nation's technology and economic hub.

Recent Developments & News

May 2025: EY launched its Integrated Finance Managed Service in the UK, combining SAP S/4HANA Cloud with AI features to enable scalable, compliant business operations.
March 2025: Google Cloud introduced "Gemini for the United Kingdom," delivering advanced AI models with UK data residency and up to GBP 280,000 in cloud credits for AI startups.
January 2025: CoreWeave inaugurated UK data centers in London Docklands and Crawley, equipped with NVIDIA H200 GPUs and Quantum-2 InfiniBand networking, backed by a GBP 1 billion investment to enhance AI infrastructure.

Key Players

Wiz
Amazon Web Services (AWS)
EY
Google Cloud
CoreWeave

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