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U.K. Firms Move to AI-Native, Sovereign Cloud Infrastructure

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Enterprises in the U.K. are rethinking infrastructure strategies as AI workloads, energy constraints and evolving regulations change the conditions under which they operate, according to a new research report published today by Information Services Group (ISG) (Nasdaq: III), a global AI-centered technology research and advisory firm.

The 2026 ISG Provider Lens® Private/Hybrid Cloud — Data Center Services report for the UK finds that changing economic conditions, tightening sustainability requirements and expanding AI deployments are reshaping enterprise infrastructure priorities. Organizations increasingly expect providers to deliver resilient, modular and sovereign infrastructure that supports evolving business requirements.

“AI is fundamentally changing how enterprises evaluate cloud infrastructure,” said Mathew Hannon, director and U.K. public sector lead, ISG. “Organizations increasingly expect providers to combine operational resilience, sustainable infrastructure and AI-enabled automation to support long-term business priorities.”

U.K. enterprises are seeking providers that can modernize legacy environments into containerized, AI-integrated platforms rather than maintaining them in a steady state. As official support ends for most legacy systems, organizations are implementing AI-ready foundations that reduce technical debt and accelerate innovation. These investments help enterprises support increasingly data-intensive, AI-driven workloads and overcome the limitations of legacy environments.

As generative AI moves from experimentation to production, companies are placing greater emphasis on sovereign infrastructure, secure data governance and private AI deployments. Organizations increasingly want to keep sensitive data and AI models within the U.K. to comply with evolving regulatory requirements and reduce cross-border risk. When making infrastructure decisions, they are balancing governance, jurisdictional control and performance.

U.K. enterprises are strengthening operational resilience by adopting FinOps practices and migrating from traditional disaster recovery to continuous availability across hybrid cloud environments. As workloads shift between public clouds, hosted infrastructure and edge systems, organizations are seeking greater visibility and cost control while addressing skills shortages. At the same time, providers are embedding AI for IT operations (AIOps) and machine learning operations (MLOps) into managed services and investing in sustainable infrastructure capable of supporting increasingly dense, GPU-intensive AI workloads.

“Organizations are evaluating infrastructure providers on their ability to support long-term transformation rather than isolated technology upgrades,” said Meenakshi Srivastava, lead analyst, ISG Provider Lens Research, and lead author of the report. “AI-ready capabilities, sovereign operations and sustainable infrastructure have become essential considerations in complex hybrid environments.”

The report also explores other trends shaping the U.K. market, including the growing role of regional edge infrastructure and the emergence of agentic IT, where AI agents automatically carry out Level 1 and Level 2 support tasks.

For more insights into the private/hybrid cloud and data center services-related challenges facing enterprises in the U.K., plus ISG’s advice for addressing them, see the ISG Provider Lens Focal Points briefing here.

The report evaluates the capabilities of 67 providers across four quadrants: AI-ready Infrastructure Managed Services — Large Accounts, AI-ready Infrastructure Managed Services — Midmarket, Managed Cloud Hosting and Resilient Infrastructure Services and Sustainable Colocation Services.

It names Claranet, Deutsche Telekom/T-Systems, DXC Technology, Hexaware, Kyndryl, NTT DATA, Pulsant and Rackspace Technology as Leaders in two quadrants each. Accenture, Atos, Capgemini, Coforge, Cognizant, Computacenter, CyrusOne, Digital Realty, Ensono, Equinix, Global Switch, HCLTech, Infosys, LTM, TCS, Telefónica Tech, Telehouse, Unisys, VIRTUS and Wipro are named as Leaders in one quadrant each.

In addition, Colt Tech Services, Kao Data, Microland and NTT DATA are named as Rising Stars — companies with a “promising portfolio” and “high future potential” by ISG’s definition — in one quadrant each.

In the area of customer experience, CS Global IT is named the global ISG CX Star Performer for 2026 among private/hybrid cloud and data center service providers. CS GLOBAL IT earned the highest customer satisfaction scores in ISG’s Voice of the Customer survey, part of the ISG Star of Excellence™ program, the premier quality recognition for the technology and business services industry.

A customized version of the report is available from Rackspace.

The 2026 ISG Provider Lens Private/Hybrid Cloud — Data Center Services report for the U.K. is available to subscribers or for one-time purchase on this webpage.

About ISG

ISG (Nasdaq: III) is a global AI-centered technology research and advisory firm. A trusted partner to more than 900 clients, including 75 of the world’s top 100 enterprises, ISG is a long-time leader in technology and business services that is now at the forefront of leveraging AI to help organizations achieve operational excellence and faster growth. The firm, founded in 2006, is known for its proprietary market data and research, in-depth knowledge and governance of provider ecosystems, and the expertise of its 1,500 professionals worldwide working together to help clients maximize the value of their technology investments.

Contact

Press Contacts:

Sarah Ye, ISG
+44 7833 567868
[email protected]

Laura Hupprich, ISG
+1 203-517-3132
[email protected]

Abstract

U.K. firms are rethinking infrastructure strategies as AI, energy constraints and regulations change the way they need to operate, ISG says.

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AI is fundamentally changing how enterprises evaluate cloud infrastructure. Organizations increasingly expect providers to combine operational resilience, sustainable infrastructure and AI-enabled automation to support long-term business priorities.

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