Top 5 Cloud Trends U.K. Businesses Should Watch in 2024

As business data demands increase, cloud providers and their customers find themselves having to consider the implications of increasing storage costs, security risks and environmental footprint. Such impacts are of particular importance to U.K. organisations, as it is the largest cloud market in Europe.

TechRepublic spoke to U.K. cloud experts to identify the top five industry trends emerging from the country’s burgeoning reliance on the fundamental IT infrastructure. These cloud trends are:

• Premiumisation of cloud packages.
• Movement towards hybrid multicloud models.
• Influx of sustainable cloud solutions.
• Continuous quest for data sovereignty.
• Focus on cloud security.

1. Premiumisation of cloud packages

Adrian Bradley, the head of cloud transformation at KPMG U.K., explained the rising costs of cloud providers’ most premium services are forcing companies to choose their packages more carefully. According to research from Dark Matter, 90% of U.K. businesses have noted their cloud costs rising.

The reduction in demand for best-in-class offerings is also pushing cloud providers to improve their ability to switch from public cloud and diversify the bundles they offer. Bradley referred to this concept as premiumisation.

He told TechRepublic in an email, “Rising public cloud prices are mostly a result of high energy prices, a shortage of computer chips and increased demand caused by the growing use of generative AI. While expensive, the premium services provided by public cloud are extremely valuable, as organisations use them to drive maximum efficiency into their enterprises.

“But where enterprises cannot get that value (from the premium services), some workloads can be placed elsewhere more economically. Non-public cloud offerings are proving to be an attractive alternative, providing a cost-effective option for less premium services.

“As a result, UK businesses will need to review their enterprise and cloud strategies to become more adaptable and value-oriented. This means that their use of public cloud will focus on higher-value, premium services like generative AI, which will enable more complex and intelligent solutions for data analysis, automation and decision-making. Simple storage and compute will gravitate to the lowest-cost platform.”

2. Movement towards hybrid multicloud models

According to a December 2023 Enterprise Cloud Index from cloud platform provider Nutanix and reported on Cloud Next, 46% of U.K. businesses are set to utilise multiple public clouds in the next one to three years, while globally this figure is predicted to be just 26%. Hybrid multicloud models are also set to be used by 26% of U.K. businesses, compared to 19% today. The main factors cited by U.K. respondents behind this pronounced shift towards hybrid multicloud models are performance, cost, data sovereignty, malware protection and flexibility.

Jake Madders, the co-founder of U.K.-based cloud hosting provider Hyve, says that partnering with different cloud providers is more cost-effective as the price of services increase. He told TechRepublic, “Companies can optimise their expenditure based on workload requirements and price differences among providers, thereby reducing total cloud expenses.”

The issues associated with vendor lock-in are also becoming more apparent. In April 2024, documents seen by The Register revealed the U.K. government was concerned its current cloud model, dominated by AWS and Azure, put its “negotiating power over the cloud vendors” at risk. Distributing workloads across multiple providers can reduce such risks, as well as the potential impacts of outages and data breaches.

Madders added, “This type of cloud infrastructure also allows for greater resilience and performance by providing redundancy and enabling workload distribution across geographically dispersed data centres. This ensures high availability and minimises latency for improved user experience.”

3. Influx of sustainable cloud solutions

“Businesses today do not just want power; they want sustainable power and accessibility,” Lars Nyman, chief marketing officer of U.K.-based cloud computing platform CUDO Compute, told TechRepublic in an email. “They also want to contribute to a greener future while not losing out on high-performance computing.”

SEE: Top UK Sustainability Trends in 2024: 4 Key Challenges & Insights

While the term “cloud” may conjure images of fluffy white puffs in blue skies, the reality is the technology is not inherently environmentally friendly. Many data centres are still reliant on fossil fuels, while the applications and databases hosted there are not optimised to use the resources efficiently. Research from Intel predicts infrastructure and software inefficiency count for more than 50% of greenhouse gas emissions in the data centre.

Madders added, “Environmental concerns around hosting and data centres are still one of the major technology drivers in the cloud industry. As a result, we are likely to see new cutting-edge technology in cooling systems and computing power.”

Such new technologies might include energy-efficient liquid cooling systems and processors that use dynamic voltage and frequency scaling. There could also be developments towards reusing the excess heat from data centres; the U.K. government recently announced it would channel it to provide low-cost heating for more than 10,000 homes.

Nyman added that these new technologies could work to democratise sustainability in the area. “Previously, only large enterprises could afford to pursue meaningful sustainability goals,” he told TechRepublic. “Startups (needed) to focus on keeping the lights on.

“Dirty energy-guzzling data centres may eventually become a thing of the past.”

4. Continuous quest for data sovereignty

Jason Van der Schyff, chief operating officer at London-based private cloud provider SoftIron, told TechRepublic in an email, “We see little to suggest that 2024 will be any less turbulent in terms of geopolitics than we have seen in years past.” Earlier this month, the payroll system used by the Ministry of Defence was hacked, and ministers reportedly suspect the involvement of China.

“With regard to its impact on IT, we expect that we will see this accelerate plans by nation-states to boost their own sovereign resilience,” Van der Schyff added. He predicted this will manifest as governments investing in infrastructure and IT skills to build out “true sovereign clouds.” In January 2024, The Times reported that the U.K. government would support the growth of the country’s data centre infrastructure. Then in March, the government announced it would invest more than £1.1 billion to train in AI, quantum and other future tech.

SEE: Top IT Skills Trends in the UK for 2024

Prakash Pattni, the managing director of Financial Services Digital Transformation at IBM Cloud, says organisations will take meaningful steps towards achieving their own data sovereignty to aid them in compliance with new regulations.

He told TechRepublic in an email, “As regulations evolve, enterprises are finding that they need to be prepared to navigate geographic-specific requirements to remain competitive and the cloud can play a pivotal role in helping enterprises to achieve data sovereignty.

“This is especially critical now as AI grows – and with it – comes an influx of data. While AI will fuel tremendous business innovations, it also requires strategic considerations around where data resides, data privacy and more.

“Organisations throughout the U.K., and especially those in highly regulated industries, are embracing sovereign cloud capabilities to help them manage their regulatory obligations and will continue to do so in the coming years.”

5. Focus on cloud security

Neil Templeton, the senior vice president of network-as-a-service platform provider Console Connect, told TechRepublic in an email, “Cyberattacks are inevitable, and their frequency will only increase, especially as hackers employ AI to boost their efforts.” In January 2024, the U.K.’s National Cyber Security Centre ruled that generative AI may increase the risk of cyber threats as it provides “capability uplift.”

SEE: Report Reveals the Impact of AI on Cyber Security Landscape

Templeton added, “Network security and infrastructure should be a top priority this year, and part of the assessment should be to determine if businesses should avoid the risks of the public internet by moving to a private network environment.”

IBM Cloud’s Pattni added that, this year, many U.K. companies are prioritising their cyber security when it comes to their cloud services. He said, “Enterprises across highly regulated industries dealing with sensitive data – such as healthcare, telco, financial services and the public sector – are increasingly adopting risk management solutions that can help them gain visibility across their entire IT estate including third and fourth parties.”

“It’s critical that enterprises have the right foundation in place to truly enable trusted performance and security for enterprise AI and other data-intensive workloads.”