2026 IT Sourcing Study – UK & Ireland
The 2026 UK&I IT Sourcing Study is the most comprehensive assessment of IT service and cloud platform providers in the United Kingdom and Ireland. Based on input from nearly 400 of the region’s largest IT-spending organisations, the study evaluates more than 1,000 unique IT sourcing relationships and over 1,500 cloud platform relationships.
External IT spending continues to grow.
Nearly one-third of organisations (32%) expect to increase spending on external IT providers over the next two years, up from 30% in 2025, while 30% anticipate no change. At the same time, the share planning to reduce external spending has fallen from 22% to 18%. However, uncertainty is rising: 20% of respondents are unsure how their sourcing strategy will evolve, reflecting economic volatility, rapid technological change, and the growing impact of AI.
Public sector leads demand for external IT services.
The public sector is most likely to increase spending on external providers, with 49% planning to do so and only 11% expecting to bring IT activities back in-house. In contrast, financial services is the most cautious sector, with only 21% planning to increase external spending, 25% expecting reductions, and the highest level of uncertainty (25%).
AI and flexibility drive outsourcing decisions.
Access to emerging technologies, mainly AI, is the strongest driver of increased outsourcing, cited by 70% of respondents. Flexibility is the second most important factor, with 62% valuing the ability to scale resources up or down. Traditional drivers remain relevant, with 49% citing both cost reduction and the ability to focus on core business activities.
Drivers for Outsourcing More
Knowledge retention drives insourcing decisions.
Retaining critical knowledge and capabilities internally is the primary reason organisations plan to reduce reliance on external providers, cited by 62% of respondents. Cost considerations also play a role, with 38% viewing insourcing as more cost-effective than outsourcing and the same proportion planning to increase work within captive centres.
Drivers for Insourcing
Offshore delivery continues to grow.
Offshore delivery is the sourcing model most likely to grow, with 35% of organisations planning to increase its use compared with 14% expecting a reduction. Growth is strongest in manufacturing and chemicals (48%) and financial services (40%), reinforcing the continued importance of offshore delivery for accessing skills, scalability, and cost advantages.
Offshore Delivery Plans
AI adoption enters a more mature phase.
AI is now widely adopted across organisations, with only 3% reporting no AI usage and 43% relying on tools such as ChatGPT and Microsoft Copilot. The most notable shift is the growing impact of internally developed AI solutions. The proportion of organisations reporting significant business benefits has more than tripled, from 5% in 2025 to 16% in 2026, signalling a clear move from experimentation to delivering measurable business value.
Significant Business Impact of AI
16%
2026
5%
2025
Sovereign IT is emerging as a strategic consideration.
Sovereign IT is becoming an increasingly important factor in IT strategy, although its impact remains largely incremental. While only 6% of organisations report major changes to technology platforms or sourcing approaches, a further 34% report small or medium effects. Uncertainty remains high, with 35% still assessing the implications. The strongest impact is seen in the public sector, where regulatory, security, and compliance requirements are driving greater change.
Impact of Sovereign IT on IT Strategy
Client satisfaction continues to improve.
This year, survey respondents evaluated 1,006 unique IT sourcing relationships. Overall satisfaction improved, with 69% rated as “satisfied” or “very satisfied”, up from 66% last year. The largest change was in the share of “satisfied” evaluations, which rose from 48% to 52%.
Satisfied or Very Satisfied IT Sourcing Relationships
69%
2026
66%
2025
Competition intensifies among top-performing providers.
The 2026 general satisfaction ranking reveals an increasingly competitive provider landscape with just three percentage points separating the top seven providers. EPAM takes the top position with a satisfaction score of 85%, followed by TCS, HCLTech, Coforge, Hexaware, and Wipro, all at 83%, with Persistent at 82%.
General Satisfaction (Exceptional Performers)
Clients and providers disagree on vendor management priorities.
The findings reveal a significant gap between how clients and service providers perceive weaknesses in IT vendor management. The largest perception gap concerns business alignment: 53% of providers believe vendor management is disconnected from broader business priorities, compared with just 17% of clients. Providers are also far more likely to view an excessive focus on costs as a key weakness (71% versus 39%).
Disconnected from Business
Excessive Focus on Costs
Organisations expect greater strategic value from service providers.
The most frequently cited provider weakness is a lack of challenge and innovation, with 43% of respondents saying providers do not challenge them enough. Concerns around value for money (27%), insufficient business knowledge (24%), inexperienced resources (24%), and continued reliance on traditional staff augmentation models (23%) further suggest that organisations are looking for providers that deliver business outcomes, strategic insight, and innovation rather than simply resources and delivery capacity.
Top 3 Service Provider Weaknesses
AWS leads infrastructure cloud while software platform satisfaction rises.
AWS remains the highest-rated infrastructure cloud provider with a score of 78%, maintaining its lead over Microsoft Azure and Google Cloud Platform (both at 75%). Satisfaction across the infrastructure cloud market remains stable, with the average score unchanged at 72%. Among cloud software platforms, Microsoft Office 365 (78%) and Google Workspace (76%) lead the ranking. Overall market satisfaction increased by three percentage points to 70%.
IaaS/PaaS
SaaS
2026 Final Report – UK & Ireland
Whitelane’s final report offers key insights into IT sourcing and governance trends, featuring rankings of IT service providers across five IT service towers and three key performance indicators (KPIs). It also includes rankings of the leading cloud platform providers for both IaaS/PaaS and SaaS. For more information, contact info(@)whitelane.com
