U.K. Digital Transformation Market Size, Share & Trends Analysis Report By Solution, By Service, By Deployment, By Enterprise Size, By End-use, And Segment Forecasts, 2023 - 2030

Market Size & Trends

The U.K. digital transformation market size was valued at USD 35.11 billion in 2022 and is expected to grow at a compound annual growth rate (CAGR) of 27.7% from 2023 to 2030. The outbreak of the COVID-19 pandemic positively impacted the market. The COVID-19 pandemic encouraged U.K. government departments to accelerate digital transformation and implement a policy within weeks instead of months or years. The pandemic has impelled businesses to adopt cloud technology for remote working. This has resulted in the increased adoption of cloud services to ensure business continuity. The Government Digital Service (GDS), a Government of the U.K.'s Cabinet Office unit, has built services and a central hub of coronavirus information on GOV.UK to help vulnerable people.

Digital transformation helps organizations enhance their customer retention ratios, customer experience, and brand reputation through the implementation of software. This software also helps organizations in educating and training their internal teams on numerous aspects of their organizations. Furthermore, digitally transformed businesses can become accustomed to the surging technological landscape and confront sudden industry shifts. More importantly, a substantial part of the market growth is expected to be driven by companies investing in cloud platforms, mobility, and big data technologies to build Digital Experience Platforms (DXP).

Advanced technologies such as cloud, big data, IoT, and analytics, mobility, and social media have sparked innovation and transformation in the business environment, resulting in increased revenue. Digital transformation is the adoption of digital technologies across business processes to transform the way technology and resources are used to deliver improved value to customers. In the U.K., companies have accelerated their digital transformation through cloud migrations, IoT, and by modernizing older IT infrastructure, among others. For instance, key cloud providers such as Microsoft Azure, Google Cloud, and Amazon Web Services (AWS) have invested Billions of dollars in upgrading their cloud infrastructure, from improving redundancy and security to expanding capabilities.

The widespread use of mobile devices and apps has transformed many facets of modern life. Owing to the staggering rise in the customer base of smartphone and tablet users, opportunities for employing mobile technologies have significantly increased in the U.K. in recent years. Advancements in the U.K. market include the increasing adoption of healthcare bio-sensing wearables, such as glucose sensors and digital blood pressure monitors, and patient and provider access to real-time healthcare data and information. Consumers now have access to different types of applications apps provided under digital transformation solutions due to increasing smartphone adoption.

While implementing digital technologies, the security and privacy of critical business data is a major concern, which is compounded further when businesses invest in new technologies. As IoT becomes more pervasive, organizations are demanding more robust security and privacy to prevent breaches. Challenges faced in managing digital security and privacy risks are expected to hinder the adoption of digital transformation efforts across several businesses. Security issues, including cybersecurity risks, rigid technical infrastructure and legal environments, risk management, and/or compliance problems, can jeopardize the digitization plans of a business.

Solution Insights

The analytics segment accounted for a revenue share of 35.1% in 2022. Analytics-based solutions have a broad scope of applications across various industries. For instance, they can be utilized for predictive maintenance systems in the manufacturing sector to help reduce downtime and increase production. The growing deluge of data, including structured, unstructured, and raw, with enormous velocity or volume, is encouraging enterprises to digitize their processes. Businesses need to focus on the idea of harnessing organizational data to enhance business value. They can implement analytics for faster and more intelligent decision-making, thereby boosting business performance largely.

The cloud computing segment is expected to grow at a CAGR of 27.6% during the forecast period. The need for faster deployment, development, delivery, and higher flexibility increases the demand for cloud computing. Companies adopt the digital transformation process to add value to the business, upgrade the IT infrastructure, and be competitive. Beyond implementing cloud solutions, a company should add new technologies that automate, speed up, and improve the business, such as machine learning, artificial intelligence, big data analytics, and the internet of things. Considering that these technologies need higher storage space and computational power, cloud computing provides an easy solution to integrate these technologies.

Service Insights

The professional service segment accounted for a revenue share of 76.04% in 2022. This section offers consultancy and managed services to organizations of all sizes operating in numerous sectors. Businesses that are digitizing require expert services to address problems like vendor selection or cultural transformation. As professional service providers aid in utilizing and deploying the proper resources at the proper moment, this industry is anticipated to grow.

The implementation & integration segment is expected to grow at a CAGR of 27.3% during the forecast period. It is projected that organizations will contact implementation service providers for the smooth deployment of digital solutions. Due to the difficulty of integrating and implementing digital transformation within an existing framework, it is anticipated that businesses will require appropriate help. This will fuel the segment's expansion.

Deployment Insights

The on-premise segment accounted for the highest revenue share of 51.1% in 2022. Several businesses choose on-premise solutions due to the ease of customizability presented during implementation. These solutions provide high-end data security and enable easy compliance with several government regulations. The on-premise deployment offers large organizations better control over confidential data. Furthermore, on-premise deployment allows organizations to install a personalized network of digital transformation that suits the organizations’ needs most efficiently and accurately.

The hosted segment is anticipated to grow at the highest CAGR of 29.9% over the forecast period. The hosted deployment segment is anticipated to witness remarkable growth owing to the flexibility provided by this deployment type. It allows users to access tools through both mobile devices and desktop computers. Additionally, it offers benefits such as low cost, easy accessibility and deployment, and reduced maintenance and upgrading efforts.

Enterprise Size Insights

The large enterprise segment accounted for the highest revenue share of 58.4% in 2022. Large enterprises are observed making significant investments to enhance or maintain their market position in a competitive market. Additionally, they are readily adopting technological advancements to keep themselves upgraded in the industry. They are also undertaking various strategic initiatives such as partnerships and, mergers & acquisitions to acquire new technologies.

The Small and Medium Enterprises (SMEs) segment is expected to grow at a CAGR of 28.3% over the forecast period. Small & medium enterprises are becoming aware of the advantages gained by digitizing their business. Initially reluctant to invest in technologies, it is becoming necessary for them to provide customers with better services with the increasing levels of competition. This is making it essential for SMEs to implement innovative technologies to keep their businesses at par with competitors.

End-use Insights

The BFSI segment accounted for the highest revenue share of 28.3% in 2022. The significant growth of this segment can be attributed to the shifting focus of banking and financial services providers toward providing customers with a better experience as the products and services within the industry are becoming commoditized. BFSI companies are constantly looking for a customer-centric approach while striving to meet customers’ needs and offering seamless assistance with technical support. The COVID-19 pandemic has changed the way banks cooperate with all their stakeholders. The demand for remote functioning abilities has increased, driving the sector to adopt digital transformation, where all processes and systems are digitally integrated to deliver a better customer experience.

The healthcare segment is anticipated to grow at the highest CAGR of 28.6% over the forecast period. Digital transformation in the healthcare sector is expected to help improve the quality of care. It can be utilized in health mapping, which helps monitor diseases and prevent them. For instance, Electronic Health Records (EHR) facilitate analytics-based decisions and diagnoses. During the COVID-19 pandemic, the industry quickly altered its processes to respond to changing and emerging health situations. Digital transformation has been enabling companies in this industry to keep up with production and follow social distancing guidelines. All these factors are driving digital transformation in the healthcare industry.

Key Companies & Market Share Insights

The key players that dominated the market in 2022 include Accenture PLC; Adobe Inc.; Alvarez & Marsal; Broadcom Inc.; Dell Inc.; Equinix; Google LLC; HCL Technologies; Hewlett Packard Enterprise Development LP; International Business Machines Corporation; Microsoft Corporation; Oracle Corporation; Salesforce; SAP; and SmartStream Technologies Ltd. To broaden their product offering, industry companies utilize a variety of inorganic growth tactics, such as partnerships, regular mergers, and acquisitions.

For instance, in April 2021, Broadcom Inc. collaborated with Google Cloud to encourage innovation and improve the integration of cloud services across the company's major software businesses. The collaboration envisages the company distributing its enterprise and security operations software on Google Cloud for enterprises to implement DevOps, Broadcom security, and other solutions on Google Cloud's trusted global infrastructure. Some prominent players in the U.K. digital transformation market include:

• Accenture PLC

• Adobe Inc.

• Alvarez & Marsal

• Broadcom Inc.

• Dell Inc.

• Equinix

• Google LLC

• HCL Technologies

• Hewlett Packard Enterprise Development LP

• International Business Machines Corporation

• Microsoft Corporation

• Oracle Corporation

• Salesforce

• SAP

• SmartStream Technologies Ltd

U.K. Digital Transformation Market Report Scope

U.K. Digital Transformation Market Report Segmentation

This report forecasts revenue growth at the country level and provides an analysis of the latest industry trends in each of the sub-segments from 2018 to 2030. For this study, Grand View Research has segmented the U.K. digital transformation market report based on solution, service, deployment, enterprise size, and end-use:

• Solution Outlook (Revenue, USD Billion, 2018 - 2030)

  • Analytics

  • Cloud Computing

  • Mobility

  • Social Media

  • Others

• Service Outlook (Revenue, USD Billion, 2018 - 2030)

  • Professional Services

  • Implementation & Integration

• Deployment Outlook (Revenue, USD Billion, 2018 - 2030)

  • Hosted

  • On-premise

• Enterprise Size Outlook (Revenue, USD Billion, 2018 - 2030)

  • Large Enterprise

  • Small & Medium Enterprise

• End-use Outlook (Revenue, USD Billion, 2018 - 2030)

  • BFSI

  • Government

  • Healthcare

  • IT & Telecom

  • Manufacturing

  • Retail

  • Others