Four Tech Trends UK SMEs Can’t Ignore in 2026

For UK SMEs, 2026 isn’t about chasing the next big thing in tech. It’s about working smarter, staying lean, and securing your business when every pound and every minute matters.

From AI and automation to cloud migration and cybersecurity, four trends are shaping the IT priorities of UK SMEs in 2026.

1. Cloud-first becomes non-negotiable as windows server 2016 nears end of life

Windows Server 2016 reaches end of support in January 2027. For SMEs still relying on ageing on-premises infrastructure, cloud migration is now critical.

Businesses are retiring legacy servers, moving to SaaS, adopting Entra ID (Azure AD), and implementing cloud-based backup and disaster recovery.

“For SMEs cloud isn’t just a technical decision anymore, it’s a strategic one. Moving away from aging on-prem servers reduces risk, improves security, and unlocks modern capabilities our customers now expect. 2026 is the year businesses stop postponing cloud migration and finally make it their default.”

Lee Johnson, Chief Technology Officer

Cloud-first strategies are now business strategies – enabling better security, predictable costs and the flexibility SMEs need to grow.

2. AI moves from experiment to everyday essential

AI adoption has accelerated sharply: A YouGov poll found 31% of UK SMEs already using AI and another 15% planning to adopt it. British Chambers of Commerce research showed AI use rising from 25% in 2024 to 35% in 2025. Globally, adoption jumped to 48% in 2024, up from 35% the year before.

For SMEs running Microsoft 365, Copilot is becoming the most accessible route into meaningful AI productivity gains. Early studies suggest potential ROI well above 130% through reduced administration time, improved document quality, and faster decision-making.

“2026 is the year AI becomes fundamental – not a separate project or innovation lab topic, but simply the way people get work done. Tools like Copilot are levelling the playing field for SMEs, giving every employee the ability to work faster, write better and make decisions with more confidence.”

Peter Pendlebury, Chief Automation and AI Officer

The shift now is from trying AI to making AI a daily part of work – embedding it into everyday workflows, training staff, and redesigning processes around new capabilities.

3. Using automation to scale output without scaling headcount

With tight budgets, rising costs and ongoing labour shortages, SMEs are under pressure to do more with the same teams. Automation has therefore risen to the top of the investment list: UK SMEs plan over £60bn in technology investment, with automation among the top three priorities. 44% of SMEs already invest in automation, and 58% plan to expand into AI-driven automation. (Beaming, 2024)

The most impactful areas include finance workflows (invoice processing, approvals), HR processes (onboarding, reminders), customer service triage, and sales follow-up sequences.

“At Air, we don’t just embed AI into our IT support offering; we use it widely across the business. From automating finance workflows to streamlining customer service handoffs, AI and automation are central to how we operate. We automate to free people from repetitive work, not to replace them. Every hour we automate is an hour given back to our staff to focus on higher-value work.”

James Healey, Chief Commercial Officer

In 2026, automation is less about huge projects and more about practical, incremental gains that reduce operational drag and free time across every team.

4. The rise of ITDR, as identity becomes the primary attack surface

Cyber-attacks against SMEs continue to rise, with nearly 60% of small UK businesses experiencing an incident in the past year. Microsoft’s latest Digital Defense Report confirms that identity compromise is now the most common attack vector.

This is why ITDR (Identity Threat Detection and Response) has become a foundational security capability, even for smaller organisations.

Key security priorities for 2026 include:

MFA for every user

Conditional access to block risky or unusual sign-ins

Continuous monitoring of identity risk signals

Clear response playbooks for account compromise

Regular validation of cloud and SaaS backups

“Attackers aren’t breaking the door down anymore, they’re simply logging in. That’s why ITDR is essential for SMEs. Strong identity controls, continuous monitoring and clear response playbooks are no longer ‘enterprise features’. They’re the minimum bar for staying secure in 2026.”

Guy Liu, Head of Cyber Security

Cybersecurity must now centre on identity, as attackers increasingly target credentials rather than infrastructure.

Consolidation, maturity and measurable gains

2026 is about delivering better outcomes – whether that’s adopting AI and automation for the first time or getting more value from the technology you already have:

AI becomes an everyday assistant

Automation removes the operational friction

Cloud-first replaces legacy risk with resilience

ITDR secures the modern identity-centric perimeter

SMEs that focus on these four areas will become faster, safer and more competitive – not just in 2026, but well into the future.

Two emerging priorities to watch

A) Sustainable, cost‑smart IT

Cloud, consolidation and automation aren’t just about saving money – they’re helping businesses cut their carbon footprint too. Boards are increasingly linking ESG goals with IT modernisation, with over 60% of businesses now prioritising ESG goals as a core focus in their digital transformation strategy (BCG, 2025)

Where to start:

Rationalise toolsets and retire underused services

Choose providers with clear sustainability reporting

Factor energy efficiency into your IT roadmap

B) Cyber insurance readiness

With cyber‑attacks rising, insurers are tightening their requirements. Meeting controls like Cyber Essentials Plus, enforcing strong MFA and Conditional Access, and validating backups can reduce premiums and improve insurability.

Recent data shows that achieving Cyber Essentials certification can reduce cyber-related insurance claims by as much as 80%, with insurers offering better terms.

Where to start:

Run a readiness assessment to identify gaps

Strengthen identity security and backup testing

Document incident response and supplier risk processes

Download our 2026 IT Strategy Pack

A clear IT strategy is the foundation for business growth, helping you align technology with your goals, control costs, and strengthen security; our IT Strategy Pack makes planning straightforward, with an IT Strategy Planning Document, Strategic Roadmap Tool, and IT Budget Planner that give you confidence and clarity for the future.

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