Two-thirds of UK businesses want to switch cloud providers
UK organisations are paying a steep 'Sovereignty Tax' as an inability to break free from major US cloud providers creates significant financial, operational, and strategic risks. This is according to new research from UK sovereign cloud provider Civo, which highlights a growing crisis of control within the UK tech sector, where businesses' clear desire to change providers is being thwarted by restrictive ecosystem traps.
The 2026 iteration of The Digital Sovereignty Revolution, a survey of 1,000 UK IT leaders, reveals a strong and growing intent among British businesses to move away from dominant global cloud providers to protect core operations. In fact, an overwhelming 66% of UK IT leaders say they would consider switching cloud providers to regain control of their data and infrastructure.
Digital sovereignty is becoming a critical issue. Seventy-three per cent of UK organisations now consider sovereignty a strategic priority - a sharp 12-point rise since last year - and 64% believe that continued reliance on a small pool of global cloud providers is unsustainable. The urgency for change is becoming more acute as AI adoption accelerates, particularly for mission-critical and sensitive workloads. Fifty-eight percent are concerned about their AI provider's legal jurisdiction, and 43% say AI workloads must be within UK jurisdiction.
The desire to exit US hyperscalers is clear, yet companies face a complicated paradox - the fact that dependence deepens IT leaders’ best intentions. The number anticipating becoming more deeply entrenched in US hyperscalers' systems has more than doubled over the past year, rising from 12% to 28%.
“UK leaders clearly want to break free from Big Tech dependency, but find themselves trapped by an ever-tightening web. This is not a proactive investment or deliberate strategy. It is a symptom of organisations becoming increasingly ensnared in the same hyperscaler ecosystems they acknowledge to be a significant long-term risk.”
Mark Boost, CEO of Civo
The findings emphasise a widening gap between sovereign intent and operational execution. UK organisations increasingly recognise that overreliance on US hyperscalers is a significant risk, but technical lock-in, migration complexity, contractual barriers, and financial friction remain prohibitive to switching providers. Successful migration to a domestic alternative has stalled at 15%, and only one in four UK firms believes they could exit a major US provider entirely.
Remaining locked into foreign-owned infrastructure subjects UK firms to a dangerous loss of autonomy - effectively handing over a theoretical ‘kill switch’ where external jurisdictions or provider infrastructure failures can abruptly compromise domestic operations. This ‘Sovereignty Tax’ is influenced by factors such as outages, unpredictable costs, restricted portability, incomplete data visibility, legal exposure and the practical difficulty of extracting from providers subject to foreign jurisdiction.
“This is the reality of the ‘Sovereignty Tax’. It is no longer a hypothetical compliance issue; it is a financial, operational and strategic burden on British businesses. When organisations cannot easily move workloads, fully see where their data is governed, or predict the cost of exit, cloud dependency becomes a board-level risk.
This forced entrapment reflects the exact anti-competitive issues driving the Ofcom investigation into the cloud computing market, the designation of Strategic Market Status (SMS) for Microsoft, and growing regulatory alarm over dominant players stifling market freedom.”
Mark Boost, CEO of Civo
The cumulative cost of building critical systems on foreign-owned infrastructure, which sits beyond domestic control, is already materialising. In the past year, 39% of UK IT leaders experienced outages originating from US hyperscalers, with 15% experiencing them on several occasions. Among those affected, 29% reported a direct financial cost, 40% reported cloud dependency risk exposure exceeding £50,000, and 5% reported costs exceeding £1 million.
Sovereignty concerns have also become a national imperative, with strong demand for government action evident in the report findings. Ninety percent of UK firms are calling for a more proactive approach from the UK authorities to support homegrown cloud technology, up from 60% last year. Additionally, 72% of IT leaders believe that fostering true UK innovation requires domestic infrastructure.
“AI has raised the stakes for digital sovereignty. The issue is no longer just where data is stored, but also where systems are built, who controls the infrastructure and which legal jurisdiction it falls under. The UK must control the infrastructure on which AI is built to ensure long-term competitiveness in the field. Sovereign cloud is about resilience, choice and control, not digital isolationism.
Fortunately, the tides are beginning to turn, and the desire for change is finally gaining traction in Westminster, where the UK’s technological sovereignty is becoming a regular topic of discussion. The UK already has the foundations it needs to take control of its digital destiny, and if our political leaders continue to collaborate with UK tech leaders and provide commercial backing to homegrown suppliers, the future remains in our hands.”
Mark Boost, CEO of Civo
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