Hybrid, Multicloud Strategies Gain Traction in U.K – ISG - September 02, 2025

Enterprises across the U.K. are rapidly modernizing their cloud infrastructures, motivated by a surge in AI and ML workloads that demand scalable and secure cloud solutions, according to a new research report published today by Information Services Group (ISG), a global AI-centered technology research and advisory firm.

The 2025 ISG Provider Lens Private/Hybrid Cloud — Data Center Services report for the U.K. finds an upward trend in the adoption of hybrid and multicloud infrastructure models, with significant growth anticipated within the next three years. Performance, data sovereignty, security and regulatory pressures are the primary drivers of this growth. Hybrid cloud is now the preferred model for many U.K. enterprises, because it lets organizations align workloads with appropriate environments and improve data protection.

“U.K. enterprises are actively transitioning toward hybrid and multicloud platforms to support AI and ML workloads and safeguard sensitive data,” said Anthony Drake, partner at ISG. “These flexible platforms are crucial for protecting organizations against ransomware and malware threats and for achieving cost efficiency.”

Meenakshi Srivastava, lead analyst, ISG

Enterprises in the U.K. are using hybrid clouds to enhance security with private cloud resources while simultaneously gaining cost savings and flexible scalability from public clouds, ISG says. Increasingly, they are deploying real-time monitoring and ML within private clouds to strengthen data protection, particularly in highly regulated sectors such as healthcare and finance.

As organizations embrace cloud environments, they are engaged in large-scale migration of business applications. Most organizations in the U.K. have migrated applications between environments to improve efficiency, capacity, security and innovation, the report says. Companies are optimizing on-premises and private cloud environments by integrating graphics processing units (GPUs) and expanding storage capacities. This approach eases handling of AI and analytical tasks while improving efficiency and resource utilization.

Small and midsize enterprises (SMEs) in the U.K. are focused on developing customized cloud solutions to meet industry-specific demands. The uptake of modular data center designs is also on the rise, owing to their low total cost of ownership and accelerated deployment capabilities, ISG says. The U.K. government’s designation of data centers as critical infrastructure, coupled with streamlined planning laws, facilitates new data center projects and reinforces a national focus on data protection. The capacity of U.K. data centers is expected to increase twofold by 2028, mainly driven by growing demand for generative AI (GenAI), cloud computing and government-supported infrastructure.

“The U.K.’s cloud market is undergoing rapid transformation, with organizations seeking agility through tailored solutions and modular data center designs,” said Meenakshi Srivastava, lead analyst, ISG Provider Lens Research, and lead author of the report. “By 2025, 75 percent of enterprise data will be processed outside traditional data centers or cloud environments, indicating a shift in data management practices.”

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