Confidence has long been the defining factor for UK businesses making investment decisions. When it comes to technology, the ability to trust hardware, software, infrastructure and even the services within an ecosystem, has been hard won.

In a marketplace saturated by vendor hype around issues such as cloud, it is easy to forget that as recently as the early 2000s, businesses predominantly relied on their own physical servers and data centers.

Within two hectic decades, by 2023, the UK reached a tipping point as more than two-thirds (69 percent) of UK firms used cloud-based computing systems and applications. And now, the array of possibilities for businesses looking to capitalise on their data is beguiling.

In an age of AI, the options that range from on-premise facilities to colocation, or public, private and hybrid clouds, are business-critical decisions.

These decisions are so important because such choices impact the compliance, cost efficiency, scalability, security, and agility that can make or break a business.

In the face of such high stakes, it is hardly surprising that confidence is the battleground on which deals for digital infrastructure are fought.

The problems of choice

So how does a business assess the right option? What are the key factors in securing confidence in investing in a given technology?

One of the current – and dominant – factors is compliance with data sovereignty laws. Regulations such as the UK GDPR and the Data Protection Act 2018 mandate that data collected from UK residents must adhere to domestic law, regardless of where it is processed or stored.

This has led to "data residency" (where data is physically located) and "data localization" (ensuring certain types of data is stored and processed entirely within the UK) becoming key factors in infrastructure investment decisions. It has already led to a resurgence in repatriating data back to the UK.

Commercially, Total Cost of Ownership (TCO) has become another key factor. Public cloud was heavily promoted on the basis of lower upfront costs. However, businesses have seen the "pay-as-you-go" model lead to escalating operational expenses.

In contrast, businesses have seen the cost of colocation and private cloud become more predictable and attractive for long-term investment. Some reports suggest that at scale, colocation can offer significant savings over public cloud, while private cloud can also reduce costs by eliminating hardware procurement and management.

Another shift in confidence has been that public cloud no longer guarantees the easiest path to growth. Public cloud has traditionally excelled in rapid, on-demand scalability. This agility was a key driver for adoption, as businesses sought to expand quickly.

However, as infrastructure providers have delivered greater choice, the hybrid approaches they offer are increasingly popular. Businesses now leverage public cloud for variable workloads and private infrastructure for stable, performance-critical applications. This has provided a better base for more sustainable growth.

This hybrid nature defines the current UK digital infrastructure market. In the face of choice around different infrastructure models, businesses are voting with their budgets.

Satisfaction and confidence

A recent Gartner report highlighted that not only is cloud dissatisfaction real, but that as much as a quarter of organizations ‘will experience significant disappointment over the next few years’.

One example of this disappointment, and the subsequent search for a confidence-inspiring alternative is LinkPool, a smart contract infrastructure provider. As the business grew, it encountered scalability issues and rising costs with existing infrastructure providers.

By colocating in Pulsant's Rotherham and Milton Keynes data centers, LinkPool not only witnessed significant improvements, including memory, CPU, and disk performance, but also realized cost savings of up to 85 percent compared to the previous cloud provider.

Such examples show the challenges to confidence in the decisions around infrastructure investment. These are the costs of meeting operational demands, realizing potential growth, and remaining compliant.

Across the UK, as businesses make these choices, they are shaping a diverse digital infrastructure market that will feature everything from resolutely on-premise to experimental cloud blends.

We recently commissioned market research leaders Vanson Bourne to capture an accurate snapshot of this market. We have sought to explore the shape of the confidence that UK businesses have when it comes to their data strategies – taking on board everything from AI and the Internet of Things to sovereignty regulation and skills availability.

Over the coming weeks, we will be releasing figures from the research, spanning vertical markets, geographical regions, as well as making some bold claims on the shape of the digital infrastructure market in the UK. Stay tuned for more!

Learn more at the upcoming Pulsant broadcast.