ISG: UK Enterprises Accelerate AI-Native Multicloud Adoption Amid Regulations

Enterprises across the U.K. are rapidly embracing AI-native multicloud environments to enhance business agility, strengthen regulatory compliance and gain greater cost transparency, according to a newly released research report by Information Services Group (ISG). As regulatory scrutiny intensifies and economic uncertainty persists, organizations are rethinking how they design and manage cloud ecosystems to support long-term resilience and innovation.

At the same time, British enterprises are carefully balancing governance, cost optimization and digital innovation as they refine their cloud strategies. In particular, digital sovereignty requirements and the growing adoption of generative AI (GenAI) are emerging as critical drivers of productivity and operational efficiency across industries.

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The 2025 ISG Provider Lens Multi Public Cloud Services report for the U.K. reveals that enterprises have entered a pivotal phase of cloud transformation. This phase is shaped by the deployment of GenAI, the enforcement of sovereign infrastructure mandates and the adoption of automation-centric operating models. As a result, organizations especially in finance, healthcare and manufacturing are redesigning their cloud architectures to support next-generation workloads while maintaining strict jurisdictional data controls. Consequently, cloud platforms that emphasize governance, accountability and long-term flexibility are gaining priority.

“As British enterprises build their cloud strategies, they are striking a balance between governance, cost optimization and innovation,” said Rakesh Parameshwara B, director and head of U.K. Banking and Insurance at ISG. “Digital sovereignty and GenAI adoption are becoming key considerations in productivity and operational resilience.”

Moreover, the report highlights a growing shift toward agentic automation. An increasing number of U.K. enterprises are embedding autonomous AI agents into everyday workflows to improve operational efficiency. These organizations are using GenAI to automate documentation, resolve incidents faster and enhance knowledge retrieval. As agent-based automation matures, it continues to reshape expectations around productivity, observability and resilience, making AI an integral component of large-scale cloud operations.

Meanwhile, FinOps is evolving beyond basic cost management. According to ISG, it is now becoming a central governance discipline as enterprises grapple with unpredictable multicloud costs. To address this challenge, organizations are prioritizing cost transparency, financial accountability and predictive budgeting tied to service-level agreements (SLAs). This disciplined approach enables enterprises to scale AI-driven cloud initiatives while maintaining financial control.

In addition, digital sovereignty mandates are accelerating the adoption of jurisdictional controls across the U.K. market. Enterprises are implementing Hold Your Own Key (HYOK) models, deploying U.K.-specific cloud zones and enforcing strict data residency policies to meet regulatory and risk requirements. These measures are particularly critical for highly regulated sectors, including finance, healthcare and manufacturing.

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“Enterprises are moving away from transactional cloud sourcing toward long-term approaches focused on innovation,” said Meenakshi Srivastava, lead analyst, ISG Provider Lens Research, and lead author of the report. “They seek providers that are strategically investing in compliant architectures and outcome-driven engagement models.”

Beyond governance and automation, the report also examines emerging trends such as the growing influence of sustainability metrics and cross-industry convergence in shaping enterprise cloud transformation strategies. Collectively, these factors are redefining how U.K. organizations evaluate cloud service providers.

The 2026 ISG Provider Lens Multi Public Cloud Services report for the U.K. assessed 61 providers across seven quadrants. Computacenter and Rackspace Technology emerged as Leaders in four quadrants each, while Accenture, Capgemini, HCLTech, Infosys, LTIMindtree and Wipro led in three quadrants each. Several global technology providers, including AWS, Google and Microsoft, were recognized as Leaders in two quadrants. Additionally, Hexaware, Kainos, LTIMindtree, Mphasis and TCS were named Rising Stars for their strong future potential.

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