Market Trends Reshaping UK IT and Technology Services
by Toby Hurdle
Technology services is reshaping the way businesses approach growth, efficiency, and competitiveness. Private equity firms like Rockpool Investments are closely following these changes, identifying where innovation, demand, and investment potential intersect. Below is a snapshot of four market trends in the technology services landscape that we are following closely.
M&A CONSOLIDATION CONTINUES
The UK technology services sector shows robust M&A activity with completed transactions in H1 2025 representing the highest volumes on record. Private equity involvement remains with c. 70% of all deals, maintaining its position as the fundamental driver of consolidation. With an estimated 5,000+ technology service providers active in the UK market, significant consolidation opportunities remain. The fragmented landscape includes considerable small and micro MSPs that represent potential acquisition targets for PE-backed consolidators pursuing buy-and-build strategies. Rockpool tracks 1,200 of these technology services businesses, our data shows an ageing demographic for the owners of these businesses, with most not having appropriate succession plans, meaning the consolidation of the sector needs to continue.
AI-READY INFRASTRUCTURE TRANSFORMATION
UK businesses are prioritising AI readiness as a competitive imperative. The government’s £2.7 billion AI infrastructure commitment and prediction that the UK will require 6GW of AI-compute capacity by 2030 reflects this urgency.
Although AI is a common boardroom topic, there is still lots of unknowns about what AI will mean for most businesses, but for companies to get the most out of AI productivity benefits there will need to be lots of housekeeping improvements around data preparation and IT systems improvements so that companies have the infrastructure to support AI workload. The challenge extends beyond technology to encompass security, governance, and compliance frameworks that make AI deployments viable across businesses. Lots of this means that normal businesses will require expert support to realise these benefits, as such, we see strong market opportunity for consultative led businesses that can companies through this transition.
VENDOR DYNAMICS
Major vendors such as Microsoft, Google Cloud, and ServiceNow have raised and evolved partnership qualification thresholds. These are increasing barriers and pushing smaller firms towards being more vendor-aligned. We expect this will accelerate the emergence of specialist, mid-market groups with focused vendor expertise.
CYBER SECURITY
Cyber incidents are rising rapidly across the UK, making security and resilience a board-level priority. Major breaches this year affected brands such as Marks & Spencer, the Co-op, and Harrods, disrupting operations and exposing sensitive customer data. The Marks & Spencer ransomware attack caused significant business interruption, while supply chain breaches left the Co-op’s stores relying on manual systems for several days.
Government data shows that 43% of UK businesses have experienced a cyber-attack to some degree, with many incidents involving third-party suppliers. Regulators, including the FCA and ICO, are tightening oversight, pushing firms to treat cybersecurity as a fundamental aspect of good governance rather than a discretionary spend.
However, there is a growing gap between demand and supply for capable managed cybersecurity providers. Many smaller firms lack the expertise and scale to deliver comprehensive, 24/7 managed detection and response with lots of resellers in the market selling products with lower levels of protection. The UK’s cyber talent shortage, estimated at around 14,000 roles, further restricts capacity.This shortage presents an opportunity for some technology service companies with strong cybersecurity capabilities.
