The New U.S. Policy Landscape and Why It Matters to UK Business

“America First” Data Policies

President Trump’s return to office has brought an assertive America First approach to data and defense. U.S. law already permits broad government access to data held by American companies under laws like the CLOUD Act (2018), which allows U.S. authorities to reach into data centers abroad operated by U.S. firms . Now, with Trump emphasizing national security, one can expect even less hesitation in exercising those powers.

For UK companies, this raises a stark concern: if you use a U.S.-based SaaS (even if your data is hosted in Europe), that data could be accessed by U.S. agencies without you ever being notified .

In Trump’s first term, the CLOUD Act already put U.S. cloud providers at odds with European privacy laws. Notably, when Microsoft was ordered to hand over data stored in Ireland, U.S. law compelled compliance despite EU objections.

Under a Trump administration focused on security, the tension between U.S. surveillance demands and UK/EU privacy requirements will only grow. UK businesses must ask: can we trust that data stored with an American firm will remain under UK control?

Recent analysis by EU data protection experts goes so far as to state “Companies continuing to use cloud services from US providers can no longer ensure GDPR compliance” due to the CLOUD Act. In short, U.S. providers operate under a legal regime that may directly conflict with UK data protection obligations – a conflict likely to be exacerbated by Trump’s defense and intelligence priorities.

“Free Speech” vs. Content Compliance

President Trump has also made “free speech” a cornerstone of his policy, signing an executive order on Day 1 titled “Restoring Freedom of Speech and Ending Federal Censorship.”: asserting that the U.S. government will no longer pressure or partner with tech companies to moderate content, even under the guise of combating misinformation. Essentially, the U.S. government is now hands-off on content moderation – or even hostile to it.

While this is framed as protecting American citizens’ speech, it could have unintended consequences for enterprise platforms: if U.S. SaaS providers feel political pressure to prove they aren’t “censoring,” they may become reluctant to police harmful content or behavior on their platforms.

Trump’s push to rewrite Section 230 (the law that currently gives tech companies discretion to remove problematic content) further clouds the future – changes there could either cause platforms to allow all kinds of speech or, conversely, if liability increases, suddenly purge content with automated filters. Either scenario spells uncertainty for companies using U.S. platforms for sensitive internal dialogues. In contrast, a UK-based provider operates under UK norms and regulations – including the upcoming Online Safety regime – ensuring content moderation aligns with British legal standards and corporate ethics.

The bottom line: Trump’s “free speech” policies create a regulatory and cultural misalignment between U.S. tech providers and the safer environment UK businesses need for their employees and data.

Tariffs and Tech Trade Wars

Perhaps the most immediate pocketbook issue is Trump’s stance on trade. The previous Trump administration showed a willingness to use tariffs as a blunt instrument to protect U.S. commercial interests – and Big Tech was no exception. In fact, President Trump has explicitly threatened retaliatory tariffs on nations that impose digital services taxes or fines on U.S. tech companies. This is not hypothetical saber-rattling; it’s on record: in late February 2025, the Trump administration issued a memorandum suggesting tariffs on countries that “dare” to tax Big Tech, considering such taxes a violation of U.S. sovereignty.

The UK’s own 2% Digital Services Tax on large tech firms (enacted in 2020) could easily trigger such ire. We saw a precursor of this in 2021: the U.S. (under the ostensibly more diplomacy-minded Biden administration) threatened to slap 25% tariffs on British exports – including clothing, ceramics, and furniture – in retaliation for the UK’s digital tax on Amazon, Google, and others . While that dispute cooled with negotiations, Trump’s return greatly increases the likelihood of trade conflict rather than compromise.

For UK companies, reliance on U.S. SaaS could turn into an unexpected liability in a tech trade war. How so? Consider if tariffs target cloud or software services – perhaps via “digital tariffs” or reciprocal fees. This could directly increase the cost of your subscriptions or lead your U.S. vendor to charge UK customers more to offset U.S. penalties.

Even if digital services themselves aren’t tariffed, a broader trade dispute could weaken the pound or hurt the UK economy, indirectly impacting IT budgets and service stability. Moreover, if relations truly sour, one could imagine extreme scenarios where data flows are disrupted. At the very least, Trump’s confrontational trade posture injects uncertainty: any UK firm’s IT strategy that hinges on U.S. platforms now carries a geopolitical risk premium. CEOs and CFOs typically abhor uncertainty – yet using U.S. tech under these conditions is exactly that: an unpredictable variable that is outside your control.

Diversity and Inclusion Rollback

One of the starkest shifts under Trump has been a full-scale rollback of diversity, equity, and inclusion (DEI) initiatives within the U.S. federal government – with spillover effects on the private sector.

On inauguration day 2025, President Trump signed orders revoking key DEI policies (including protections for transgender workers and programs like Biden’s Justice40 environmental justice initiative) and terminating government-wide DEI programs as “illegal discrimination” . He didn’t stop at government: another decree outright prohibited affirmative action by federal contractors and directed federal agencies to identify publicly traded companies with “illegal” DEI policies for potential investigation . This aggressive stance has created a chilling effect across many U.S. corporations. According to Reuters, major firms like Alphabet (Google’s parent) and McDonald’s have already been scaling back or rebranding their DEI initiatives in anticipation of Trump’s actions . Public companies are scrambling to determine what diversity efforts might put them on the radar of regulators, given the “huge uncertainty” about what might be deemed impermissible under the new orders .

For UK businesses, this U.S. DEI backlash poses two problems. First, if you are relying on an American HR tech or culture platform, you have to wonder: will that vendor continue to innovate and support DEI features moving forward? Or will they quietly deprioritize diversity-related analytics, surveys, or training tools to avoid political heat in their home country?

A platform like Culture Amp, for example, offers DEI survey modules and analytics – but if U.S. societal winds are blowing against DEI, a U.S.-influenced company might invest less in those areas or alter them in subtle ways. Even more troubling, if that vendor’s leadership or workforce is demoralized or divided over DEI, service quality and ethos could suffer.

Secondly, there’s a values and reputation alignment issue: UK organizations, by and large, remain committed to diversity and inclusion. A 2023 survey found 57% of UK businesses consider DEI a strategic priority in recruitment , and UK regulators (like the FCA) are adding diversity disclosure requirements, not removing them. It would be a bitter irony to champion inclusion within your company, while paying for a platform from a country whose government calls diversity efforts “immoral.”

Indeed, British leaders from government and business have openly disagreed with the U.S. anti-DEI turn – recognizing that inclusive workplaces are not just a social goal but an economic advantage (with one analysis suggesting that reducing the UK’s disability employment gap alone could add £17 billion to the economy) . Partnering with a vendor that doesn’t share or support those values can undermine authenticity. Furthermore, consider employee perception: your staff are aware of these issues. Relying on a U.S. survey tool that becomes publicly known for watering down its diversity commitment could send the wrong signal to your employees, who expect consistency between what you preach and what you practice (and the tools you use).

In summary, Trump’s war on “woke” is not confined to U.S. borders – it creates a cultural divergence. UK companies risk finding their U.S.-based SaaS providers out of step with (or even hostile to) the very values that UK businesses and regulators are working hard to advance.

Cybersecurity and Geopolitical Risks

Lastly, we must address the often unseen risk: cybersecurity and operational resilience in a bifurcating world. Trump’s approach to defense and international alliances differs from his predecessor’s, and that extends to cyber cooperation. Early signs indicate a more insular stance. For instance, the incoming administration dissolved the U.S. Cyber Safety Review Board (CSRB) – an expert advisory panel formed under the previous administration to investigate major cyber incidents – as part of cost-cutting and a focus on “national security” priorities .

The CSRB was in the middle of probing a state-sponsored hacking campaign when its members were dismissed . What does this mean for UK firms? It suggests the U.S. might handle cybersecurity events with less transparency and less collaboration. If a cloud or SaaS provider is hit by a breach, will U.S. agencies promptly share information with allies and affected foreign clients? Or will they clamp down and focus internally?

A less predictable U.S. cyber posture makes it harder for UK companies to rely on timely, frank disclosure from American partners when incidents occur. Additionally, a more aggressive global stance increases the chance that U.S. tech infrastructure becomes a prime target in geopolitical conflicts.

Already, we’ve seen nation-state hackers target U.S. cloud services – e.g., the Microsoft Exchange hack attributed to China, which affected organizations worldwide. With Trump’s hardline positions on adversaries (and even allies on occasion), one could foresee more cyberattacks aimed at U.S. companies, potentially compromising data of UK customers on those systems.

Finally, consider the possibility of U.S.-China tech decoupling accelerating: if Trump were to sanction or restrict Chinese data centers or networks, global services might fragment, causing outages or degraded service for international users. While these scenarios are speculative, they underscore a principle: the more globally entangled and politically conspicuous your tech provider, the more external risk you inherit.

UK executives typically conduct risk assessments across supply chains – now IT systems merit the same scrutiny. Using a UK-based provider dramatically simplifies that risk profile: your data stays within UK jurisdiction (less attractive to foreign spies than troves in Silicon Valley), and your provider operates in a country with strong cyber defenses and alignment through NATO/GCHQ with U.S. on threats but without being the primary target.

Risks of Using U.S.-Based SaaS Providers: Lessons of Culture Amp and SurveyMonkey

The policy shifts above aren’t just theoretical. They translate into concrete operational and compliance risks when UK companies use U.S.-based SaaS platforms. Let’s break down the primary areas of concern – data security & sovereignty, compliance, and ethics – and illustrate them with well-known tools many UK firms use: Culture Amp (an employee experience and analytics platform) and SurveyMonkey (an online survey and feedback tool). Both are popular, feature-rich products that have delivered value – yet both exemplify the hidden risks of foreign dependency in today’s climate.

Data Sovereignty and Security: Who Controls Your Data?

When you use a SaaS platform, you are entrusting that provider with your data – often sensitive personal data about employees or customers. Where that data lives and who can access it are fundamental questions for data security. UK and EU data protection law (UK GDPR) requires that personal data be protected to standards equivalent to those in Europe, even when transferred abroad. This is where U.S.-based SaaS providers run into a wall. The United States, lacking an EU-style privacy law and due to its surveillance statutes, is not considered an “adequate” jurisdiction by EU authorities. In 2020, the EU’s highest court (in the Schrems II case) struck down the EU-U.S. Privacy Shield agreement specifically because U.S. law allows government agencies broad access to data for national security – which Europeans found incompatible with their privacy rights.

What about now? The Biden administration did patch together a new EU-U.S. Data Privacy Framework, and the UK in 2023 created a “UK-U.S. Data Bridge” to facilitate transfers. However, these arrangements rely on American executive promises that could be undone or unenforced under Trump. If those fall apart, any UK company sending data to a U.S. provider could suddenly be in legal limbo, facing the prospect of unlawful transfers. Even if the frameworks hold, the core risk remains: data stored by a U.S. company is ultimately subject to U.S. jurisdiction. A stark example: Microsoft admitted it “cannot guarantee” that UK government data stored in its UK cloud servers would never leave UK borders – an implicit acknowledgement that U.S. law could demand that data. If even Microsoft, with its UK data centers and promises of “local” cloud, can’t ensure data sovereignty, one must be wary of smaller SaaS vendors’ claims.

SurveyMonkey, for instance, states it is GDPR-compliant and even offers a EU data center option for some customers. But independent analysis reveals that “(SurveyMonkey)... stores most of its European customer data on servers in the US,” raising significant questions about GDPR compliance . SurveyMonkey’s own help pages acknowledge that personal data may be processed in the U.S., relying on mechanisms like standard contractual clauses. Post-Schrems II, those mechanisms are under intense scrutiny. In fact, transferring EU (or UK) personal data to the U.S. without additional safeguards may violate GDPR outright . For any UK firm using SurveyMonkey to gather employee feedback or customer insights, this should set off alarm bells. If regulators or courts determine those safeguards aren’t enough – something privacy activists are actively pursuing – you could be forced to suspend use of the service or face penalties. The legal risk is real: GDPR fines can reach up to 4% of global turnover. It’s telling that many German and French organizations have begun shunning U.S. cloud and SaaS providers in favor of local “sovereign cloud” solutions .

Culture Amp, originally founded in Australia, is another platform widely adopted by UK HR teams for engagement surveys and analytics. While Australia is friendlier from a legal standpoint (it has an adequacy arrangement with the UK for data), Culture Amp has a large U.S. presence and uses global cloud infrastructure. Its privacy policy notes that data may be transferred to the U.S., Australia, and Ireland, among other locations . In practical terms, if you deploy Culture Amp in London, your data could bounce between continents. Moreover, Culture Amp has introduced AI-driven features (like AI-generated comment summaries for survey feedback). Many HR tech providers implement such features by integrating with American AI models (such as OpenAI’s GPT-4 or Anthropic’s Claude). If Culture Amp (or similar vendors) are leveraging OpenAI under the hood, then even if your survey data is stored in Europe, when you click that “AI Analysis” button your text could be sent to OpenAI’s servers in the U.S. for processing – a backdoor data transfer that brings all the same sovereignty issues and more potential exposure. There’s a reason Italy’s data protection authority temporarily banned ChatGPT and fined OpenAI €15 million for GDPR violations : uncontrolled export of personal data to a third country for AI processing is a compliance nightmare.

Beyond legalities, consider security: U.S. SaaS firms are huge targets for cyberattacks. If a hacker wants to steal corporate data en masse, they are more likely to hit a platform that aggregates data from thousands of companies worldwide (like a SurveyMonkey) than to target a single UK-based provider serving a smaller market. And when breaches do happen, U.S. breach notification laws differ from the UK’s. A U.S. company might delay disclosure for law enforcement or PR reasons, whereas UK law (and EU law) demands prompt reporting to authorities and affected customers. By the time you hear about a breach from your U.S. vendor, your data could have been for sale on the dark web for weeks. All of these factors explain why over half of UK organizations now see data sovereignty as crucial to their strategy, according to industry surveys . It’s not just a fad – it’s recognition that control over data geography equals control over data security and compliance.

In summary, using U.S.-based SaaS for data-intensive functions is increasingly a high-risk proposition for UK companies. You might be exposing your crown jewels (employee data, proprietary analytics) to foreign government access and putting your company on a potential collision course with UK regulators. As Mark Boost, CEO of UK cloud provider Civo, warned: “The inability to ensure data remains within UK borders underscores the risks of depending on [foreign] hyperscalers… if we keep outsourcing critical data infrastructure, we lose more than just technical control, we lose national independence.” . Strong words – and they ring truer with each transatlantic policy divide.

Compliance and Regulatory Divergence: Avoiding the Legal Quagmire

Hand in hand with data sovereignty is the broader compliance challenge when using U.S. SaaS. Even if a security breach never occurs, the act of transferring and processing data across jurisdictions creates a complex web of regulatory obligations. Under Trump, the divergence between U.S. and UK/EU regulations is set to widen, making compliance ever more convoluted for companies straddling the fence.

Consider privacy laws: The UK currently mirrors EU GDPR, which is stringent about cross-border data transfers, individual consent, and data minimization. The U.S., by contrast, has a patchwork of laws (like California’s CCPA) but nothing as comprehensive – and Trump’s administration is unlikely to prioritize privacy regulation (indeed, it may roll back some federal agency guidances to favor business flexibility).

If a UK company entrusts a U.S. SaaS with personal data, it effectively has to maintain dual compliance – adhering to UK laws in its operations but also ensuring its vendor’s practices meet those standards despite being under a different regime. This often means heavy paperwork: Data Processing Agreements, Standard Contractual Clauses, Transfer Impact Assessments – and even those may not suffice if political winds shift. The UK government has introduced the Data Protection and Digital Information Bill (DPDI) to update our data laws, but it has not indicated any lowering of standards for foreign transfers. In fact, the UK’s proposed Data Use and Access Bill will require that overseas jurisdictions have data standards “not materially lower” than the UK’s for transfers to be allowed.

With U.S. privacy protections being materially lower in certain respects (no blanket rights to opt-out, broad surveillance allowances), one could foresee a future where UK regulators or courts crack down on routine transfers to U.S. cloud services. The Competition and Markets Authority (CMA) is already investigating cloud market practices that “could lock customers into foreign providers,” with an eye towards boosting data sovereignty . The CMA’s findings in 2025 may well lead to new rules that mandate UK data storage or easier switching from U.S. providers . Companies that proactively shift to UK-based solutions will be ahead of the compliance curve; laggards might be forced to scramble later.

Beyond privacy, look at industry-specific compliance. Many sectors – finance, healthcare, defense – have regulations around data handling. For example, UK financial services firms under FCA oversight must manage operational risk and protect customer data rigorously. If an American SaaS is part of your critical operations (say, an online survey tool gathering customer feedback that might include complaints data), you need to assess whether that vendor meets UK standards like ISO 27001, whether data stays in approved locations, and whether using it could violate any sectoral guidelines. Now add Trump’s tariffs and export controls to the mix: could using a U.S. service become an issue if the U.S. declares certain data (or algorithms) a national security asset? It sounds far-fetched, but recall that the U.S. has previously had export restrictions on strong encryption software. Under a hawkish defense posture, rules might emerge restricting foreign access to some AI services or requiring licenses – potentially ensnaring UK companies that rely on U.S. AI-driven SaaS. Or if the UK, for instance, decided to mandate data localization for critical infrastructure sectors (something India and others have done), companies will wish they weren’t tethered to an overseas provider.

In essence, the regulatory environment is in flux, and divergence between the U.S. and UK is likely to grow in areas like privacy, AI governance, and digital trade. When you choose a SaaS provider, you’re not just buying a product – you’re entering a long-term relationship that must survive under evolving laws. With a U.S. provider, you face a moving target of ensuring both sides of the Atlantic are satisfied. With a UK provider, compliance is more straightforward: one jurisdiction, one set of laws, and typically clearer accountability if things go wrong. As techUK (the UK’s technology trade association) defines it, “data sovereignty refers to the principle that data is subject to the laws and governance structures of the country in which it is stored” – so why voluntarily subject your data to two countries’ laws when you only need one?

Ethical and Cultural Concerns: When Values Clash

Modern businesses don’t operate in a moral vacuum. Corporate values, ethical standards, and ESG commitments influence decisions from hiring to partnerships. If your company prides itself on ethical conduct, diversity and inclusion, and social responsibility, you must consider whether your technology vendors reflect and support those values – or undermine them. Here, again, the contrast between U.S.-based and UK-based SaaS providers has grown sharper in light of recent events.

We’ve already detailed how U.S. companies are pulling back on DEI efforts under political pressure. Let’s put it bluntly: A SaaS provider’s culture will inevitably seep into its product. If you rely on a platform like Culture Amp to gauge and improve your own workplace culture, you need that vendor to be a champion of progressive workplace practices, not an entity being forced to tone down its own diversity programs. Culture Amp itself has been a vocal proponent of DEI in the past – but if it, or any U.S. HR tech firm, has to worry about being branded “too woke” by stateside investors or officials, their boldness may fade. Features that, for example, allow employees to self-identify gender beyond the binary, or survey questions that probe sensitive areas like experiences of discrimination, might get watered down to avoid controversy in the U.S. market. Yet those very features are what give such tools value in promoting inclusion. UK businesses have far fewer qualms in this area; our discourse around DEI is different. The UK has the Equality Act 2010 enforcing non-discrimination and is considering mandatory ethnicity pay gap reporting. The expectation is that companies increase their DEI transparency, not decrease it.

There’s also the matter of free expression vs. harassment in workplace platforms. Trump’s free speech doctrine, which celebrates an absolutist view, might embolden some U.S. tech companies to adopt a more hands-off approach to moderation. Imagine an enterprise social network or survey tool that takes an American-style view that all speech by employees (no matter how offensive) is just an opinion. In the UK, that same speech could violate harassment laws or at least company codes of conduct. If an employee uses a survey’s comment box to spew hateful remarks, will your U.S. platform immediately remove or flag it? Or will it cite “open debate” principles? The ethical stance of your provider matters – especially when that provider is effectively mediating communication within your organization. A UK-based SaaS provider, rooted in UK norms, is more likely to understand the line between healthy debate and harmful speech, and to build their product features accordingly (for instance, providing filters for profanity or slurs, which a U.S. provider might not enable by default if it’s worried about appearing to censor).

Then consider transparency and trust. UK consumers and employees are protected by robust rights – e.g. the right to request your data (Subject Access Requests) or to know how algorithms make decisions about you. If a U.S. SaaS used by your HR department is not geared up to handle those UK-specific rights (perhaps such features are low priority for them), you could find yourself unable to meet obligations to your staff. This becomes an ethical issue as well as legal: respecting user rights is a value many companies espouse.

Finally, supporting the local community and economy can be seen as an ethical choice. The pandemic reinforced the importance of resilient local supply chains. Similarly, in tech, there is growing sentiment for “digital sovereignty” not just for security, but to ensure we are not empowering monopolies at the expense of home-grown innovation. By continuing to send pounds across the Atlantic to U.S. SaaS giants, UK businesses might inadvertently be starving the next generation of British tech companies of opportunities. There’s an ethical dimension in investing in the society that you operate in – something many execs have acknowledged in ESG commitments. Working with UK-based SaaS aligns with the “Social” and “Governance” prongs of ESG: you are strengthening local tech talent and demonstrating good governance by mitigating overseas risks.

In summary, when U.S. policy and cultural trends diverge from British values, choosing a U.S. vendor becomes more than a technical decision; it’s a statement of whose values you endorse. The good news is that UK alternatives exist (and we’ll discuss one shortly) that allow you to live your values through your choice of tech partner, without compromising on functionality.

The Benefits of Working with UK-Based SaaS Providers

We’ve painted a picture of the risks tied to U.S. SaaS – but risk avoidance is only one side of the coin. The flip side is the positive advantage that UK-based SaaS providers bring. It’s not just about dodging negatives; it’s about actively benefiting from what a local partner offers. Let’s detail the key benefits for UK companies that choose SaaS providers with 100% UK-based infrastructure, AI, and workforce:

1. Legal and Regulatory Peace of Mind

When your SaaS provider is fully UK-based, compliance becomes significantly simpler. Your data is stored on UK soil, subject only to UK laws (and any EU laws retained in UK). This means no more agonizing over international data transfer rules – in most cases, data isn’t leaving the UK in the first place. You no longer need to monitor the fate of Privacy Shield or the UK-U.S. Data Bridge, because your risk is contained. By keeping data under UK jurisdiction, you also ensure that oversight and enforcement, if needed, are done by UK authorities (ICO, etc.) with whom you can directly engage, rather than foreign regulators.

Moreover, a UK provider is likely to be intimately familiar with UK-specific regulations relevant to your sector. They will build compliance into their service. For instance, if new guidelines from the ICO or a piece of legislation comes out, a UK SaaS can quickly adapt and update contract terms or features for all customers (who are mostly UK-based) to comply. Contrast that with being just one segment of a global customer base for a U.S. provider – you might have to advocate for UK-specific compliance features that are not on their radar. Legal protection is also stronger: your contracts will be under UK law, enforceable in UK courts. If disputes arise or if the vendor fails to meet obligations, you’re not pursuing a company overseas or dealing with unfamiliar foreign courts. This local accountability is invaluable.

Finally, by using UK SaaS, you protect your company from becoming collateral damage in U.S.-EU or U.S.-UK legal tussles. We mentioned that the CMA is considering mandating UK data storage guarantees from cloud providers – a UK vendor by design meets that criterion, so you wouldn’t be forced to re-architect anything. If the EU (and by extension possibly the UK) were to invalidate the new data transfer deal with the U.S. (a real possibility if Trump’s policies on surveillance don’t satisfy European watchdogs), many firms will scramble to localize data. If you’ve already partnered with a UK provider, you’re ahead of the game, turning compliance into a competitive advantage rather than a scramble.

2. Data Sovereignty and Security Enhancements

Keeping all data and infrastructure within the UK’s borders is not just a compliance win; it’s a security boost. UK-based SaaS providers typically host in UK data centers that adhere to our national standards and can even be part of our critical national infrastructure. The UK government in 2024 designated data centers as critical infrastructure , which underscores how vital and protected these facilities are. By using a UK SaaS, your data could reside in a data center benefiting from those heightened protections (power resilience, cybersecurity focus, etc.). Additionally, local hosting means lower latency and more reliable performance for your UK users, simply because of geographic proximity – a technical but tangible benefit.

From a sovereignty perspective, you eliminate the risk of a foreign power unilaterally reaching into your data. Only UK law enforcement, with proper UK warrants, could access your data – and that process is bound by strict necessity and proportionality under UK law, with oversight. You’re effectively shielding your information from extraterritorial reach. In a time where data is often called the “new oil,” keeping that asset under national jurisdiction ensures you maintain ultimate control. It’s akin to storing your company’s gold in a local bank vault versus a foreign one; the former is subject to your home rules and security apparatus.

We should also mention resilience. Political events or decisions in the U.S. can’t disrupt a UK-based service as directly. For instance, if U.S.-China tensions escalate and cause issues for cloud regions in Asia or restrictions on certain tech exports, a UK service operating in UK zones remains steady. Likewise, Brexit showed how regulatory changes can complicate cloud setups (UK and EU had to negotiate data flows); by localizing with a UK vendor, you sidestep international fallout. In short, UK SaaS gives you control, clarity, and continuity – crucial elements for a solid risk management strategy.

3. Economic and Operational Advantages

Every pound spent on a foreign service is a pound that leaves the UK economy. Conversely, spending on a UK provider recirculates in our economy – funding local jobs, local innovation, and local tax revenue. For large enterprises, this can amount to millions invested in the domestic tech sector, rather than enriching Silicon Valley. There is a growing recognition that supporting a homegrown digital ecosystem is in the long-term interest of UK PLC. It fosters competition and keeps prices fair. If UK businesses default to U.S. vendors, we risk a future where only a handful of American firms dominate, and they can charge monopoly prices. By nurturing UK alternatives, you help maintain a healthy market. Some CFOs might ask, “But is there a cost difference?” In many cases, UK SaaS providers are very competitively priced – often because they avoid the massive marketing overheads of U.S. giants, and because they understand local price sensitivity. They may also offer more flexible contracts (monthly, cancel anytime) versus the annual lock-ins common with big U.S. SaaS contracts.

Operationally, working with a provider in your time zone, who works during the same business hours, speaks the same language (not just English, but the language of UK business culture) can streamline support and development. If you need a new feature or have a concern, you can likely get stakeholders on a call immediately. Perhaps you even meet the vendor’s team in person on occasion – building a true partnership rather than a faceless transactional relationship. This can yield bespoke solutions or early access to features tailored to UK needs. Additionally, there’s no dealing with currency fluctuations or foreign transaction fees – you pay in GBP, with no surprises.

Let’s not forget public relations and procurement ease. For companies that have commitments to “buying local” or supporting UK SMEs, choosing a UK SaaS ticks that box. If your company ever touts its contribution to the UK economy or its alignment with government’s digital strategy, being able to say your software infrastructure is UK-based solidifies that claim. There might even be tax incentives or grants in the future for companies emphasizing digital sovereignty (as governments encourage local tech growth) – by switching now, you’re ahead of that curve as well.

4. Cultural Alignment and Stronger DEI Commitments

One of the most compelling reasons to choose UK-based SaaS is the cultural alignment and understanding that comes built-in. UK providers share the context of British business values – they operate under UK employment laws, equality laws, and societal expectations. This often translates to features and services that inherently consider things like inclusivity, accessibility, and fairness. For example, a UK-based HR tech platform will be well-versed in the nuances of the UK’s Equality Act protected characteristics (age, disability, race, gender reassignment, etc.) and might offer more nuanced options to address them. They are also more likely to design with UK demographics in mind (like multi-ethnicity categories that mirror our census, options for traditional vs. simplified Chinese for UK Chinese communities, etc.). These details matter when engaging your workforce or customers – people notice when a tool “speaks their language” vs. when it feels imported.

We’ve also discussed DEI at length. Let’s underline a positive aspect: UK-based SaaS companies can be unabashed about supporting DEI initiatives, because there’s broad-based support here and no government directive to avoid “woke” practices. In fact, many UK tech firms are proud of their diversity and advertise it. As a client, this means the product will continue to evolve with inclusion in mind. You’ll get enhancements that help you, say, measure belonging or identify bias in survey responses, rather than a creeping fear that such features might be removed. Furthermore, a UK workforce at your vendor likely undergoes training and operates in a culture that values inclusion (often more so than the U.S. tech sector, which has been criticized for lack of diversity in Silicon Valley). Indirectly, this reduces the chance of insensitive design or algorithmic bias in the software – because a diverse UK team is building it and will catch issues early.

There’s also alignment on free speech vs harm: UK tech providers understand the libel laws, harassment laws, and general politeness standards (sometimes jokingly referred to as British reserve) that shape user expectations here. They will be more inclined to include moderation tools, content filters, and admin controls that UK companies find necessary to maintain a respectful environment. And they won’t frame it as censorship – they’ll frame it as professional norms. This is exactly what UK execs want to hear.

A concrete example of cultural alignment can be seen in how quickly a provider adapts to local societal shifts. During the COVID-19 pandemic, UK SaaS providers rapidly updated products to accommodate furlough schemes, NHS Test and Trace integrations, and new health and safety requirements in workplaces. U.S. providers, unless they had UK teams, were often slower to account for these UK-specific needs. In the future, if the UK implements, say, a four-day workweek trial or new holiday mandates, a UK-based HR platform would likely support those configurations out-of-the-box sooner. These things add up to better employee experiences and less custom workaround that your HR or IT has to do.

In short, a UK provider is operating in the same reality as you are, and rowing in the same direction. That synergy reduces friction and builds trust – a priceless asset when relying on cloud software for core business functions.

5. Local Innovation and AI Independence

Finally, a point often overlooked: by choosing UK-based tech, you encourage local innovation and AI development. The narrative that “all the best AI comes from the U.S.” is changing. The UK has a vibrant AI research community (DeepMind being a prime example, though now owned by Alphabet). There are emerging British AI startups and an increasing push for sovereign AI capabilities. When you choose a UK SaaS that has its own AI baked in, you are supporting the growth of that competence on UK soil. This has a compounding effect: revenue stays here, which can be reinvested in R&D, which creates better products for you in the future. Moreover, UK AI is likely to be developed with UK and European ethical frameworks in mind – like ensuring transparency and avoiding biases that would be unacceptable under EU AI regulations that are on the horizon.

Another aspect of AI independence is data. Often, when using a U.S. AI service (like an OpenAI API), you might be concerned about your data being used to train someone else’s model. OpenAI says it doesn’t use client API data for training by default now, but these policies can change. With a UK provider such as Divrsity using our own AI models on our own servers in our own datacenters in the UK, you can often get assurances that your data stays in the UK and is only used to serve your outcomes, not to feed a big American AI that might someday be sold back to you in another product. The UK government has been advocating for secure and privacy-preserving AI – something a domestic provider is more likely to prioritize in order to comply with UK norms and any upcoming AI regulations.

Let’s illustrate the benefit: Suppose you use a UK-based analytics SaaS that has an AI engine to identify trends in employee feedback. Because everything is UK-run, you feel safe enabling it on sensitive comments. The AI flags that, for example, employees in one office are mentioning “overtime” frequently in a negative context. This insight helps you address a work-life balance issue. You got the insight quickly, without compliance worries. Meanwhile, a competitor of yours using a U.S. tool might hesitate to even turn on an AI analysis feature for fear of where that text is going, or they turn it on and cross their fingers that nothing leaks. You have acted, they have not – that’s a competitive edge directly born from having a trustworthy, local AI.

Divrsity: A Best-in-Class UK Alternative for DEI Insights

To ground this discussion, let’s see how Divrsity embodies these benefits: Divrsity is the UK’s leading diversity and inclusion survey platform, offering companies a way to measure and improve workplace culture through tailored surveys and advanced analytics. It has emerged as a compelling alternative to U.S. platforms like Culture Amp or SurveyMonkey for several reasons:

100% UK Infrastructure

All of Divrsity’s data storage and servers are UK-based. When you run a Divrsity survey, the data is stored in the UK and never transmitted abroad. This means your respondents’ information (which can include sensitive opinions on workplace issues, demographic data, etc.) is kept under UK jurisdiction at all times. You can confidently tell your employees that their anonymous feedback isn’t leaving the country, adding an extra layer of trust to the process. It also means Divrsity can act as the data controller processing on your behalf, shielding you from GDPR concerns by ensuring compliance end-to-end – they’ve built the platform with GDPR in mind, purging or anonymizing individual responses as needed to protect privacy .

UK-Based AI Capabilities:

Divrsity leverages AI to enhance its analytics – for example, automatically flagging areas of concern or “poisoned” responses (deliberately skewed answers) . Crucially, these AI features do not rely on sending data to OpenAI or Anthropic in the U.S. Divrsity has developed its AI models in-house (or sourced them from UK/European providers), meaning the analysis happens within the same UK environment. The benefit is twofold: no AI compliance worries about data export, and AI tuned to UK workplace language and norms. If someone comments “This place has a very laddish culture,” an American AI might miss the nuance; a UK-tuned AI is more likely to catch that this indicates a possibly exclusionary atmosphere. By keeping AI development local, Divrsity also aligns with the UK’s push to build sovereign capabilities and reduce reliance on the U.S. tech giants.

All-UK Workforce

Divrsity’s team is entirely UK-based. Why does this matter? Firstly, all support and client service are during UK business hours – if you need help launching a survey or interpreting results, you’ll talk to someone who understands the context of a UK workplace instantly. Secondly, the team’s composition reflects the diversity of the UK labor market they serve, which helps ensure the product is culturally competent. Thirdly, from a data handling perspective, UK-based staff are subject to UK laws (Data Protection Act, etc.) and are in a single jurisdiction. No handing off data to a subcontractor’s team in, say, California or Bangalore where oversight is harder; the chain of custody stays in one legal area. This significantly lowers the risk of insider threats or mistakes leading to breaches – a point often overlooked when considering offshore support teams some providers use. With Divrsity, even the people building and maintaining the system are bound by UK confidentiality and cybersecurity standards.

Feature Set Tailored to UK DEI Needs

As the name suggests, Divrsity is purpose-built for diversity, equity, and inclusion insights. Its survey templates cover not just generic engagement questions, but dive into nuanced areas like neurodiversity, caring responsibilities, menopause, social mobility, educational background, and work background among others . These are topics particularly resonant in the UK context – for example, menopause support has gained traction as a workplace issue in the UK recently. A U.S.-centric platform might not offer content around that at all. Divrsity’s questions are constantly evolving with expert input, and crucially, designed to not offend UK sensibilities . This means language is reviewed to be appropriate and inclusive as per UK cultural standards. As UK businesses strive to create inclusive cultures, using a tool that’s inherently aligned to those goals amplifies the effectiveness of their efforts.

High Participation and Trust

Divrsity boasts response rates often between 70–90%, far above typical survey benchmarks . One reason is employees recognize the platform’s commitment to anonymity and UK-based data handling, making them more willing to participate honestly. The platform never shows results for groups so small that individuals could be identified, and it avoids tracking cookies that could make respondents feel watched . This focus on anonymity and privacy isn’t just ethically right; it drives better data for the company because people are more candid. If you’ve struggled with low engagement in surveys, it might not be “survey fatigue” – it could be a lack of trust. Divrsity’s model addresses that head on.

Prepared for UK Regulations and Reporting

A very timely advantage – Divrsity is already aligned with upcoming UK regulatory requirements. For example, the Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA) have put out consultation proposals to boost diversity and inclusion in financial services firms, including potentially mandating D&I data collection and reporting. Divrsity has proactively added support for all the FCA/PRA proposed metrics and requirements . If you’re in finance (or any regulated industry likely to follow suit), using Divrsity means you can easily collect the data points regulators want and generate reports to demonstrate compliance. That kind of forward-thinking adaptation is less likely from a U.S. vendor with mostly non-UK clients. It illustrates how a UK partner like Divrsity helps you stay ahead of local compliance needs.

Cost-Effective and Flexible

Divrsity’s pricing is set in GBP with a simple per-survey model, no long-term subscriptions or hidden fees . This is very attractive for many UK organizations, including SMEs and public sector bodies, who may not have large budgets or who operate project-by-project. You pay for what you use. In contrast, many U.S. SaaS require annual licenses or charge for a minimum number of users, etc., which can lead to over-buying or wasted spend. Especially in uncertain economic times, that flexibility can save money. And knowing the cost in pounds ensures no nasty surprises from currency shifts or foreign taxes.

In evaluating Divrsity as an alternative, it becomes a microcosm of the broader theme: UK-based SaaS can now compete head-on with the American incumbents, offering equal or better functionality with far greater assurance on the risks we’ve discussed. Divrsity delivers the analytics and AI-driven insights that an HR team craves (turning qualitative comments into quantitative insights and suggested actions) , but it does so with a foundation of trust – every layer from software to storage to staff is under UK governance.

It’s worth noting that Divrsity is not alone; the UK tech scene is producing strong SaaS players in various domains (from fintech to martech to healthtech). What sets Divrsity apart is its clear focus on values (diversity and inclusion) as well as tech – and that’s precisely the combination many UK companies are seeking in their partners today.

Recommendations: Future-Proofing Your SaaS Strategy for the UK

The world of 2025 presents new challenges for UK businesses in managing their technology stack. The resurgence of Trump-era policies in the U.S. has thrown into sharp relief the vulnerabilities of an IT strategy overly dependent on overseas providers. However, this challenge is also an opportunity. By reassessing and reorienting your SaaS partnerships now, you can not only mitigate risks but also strengthen your organizational resilience and integrity.

Here are some clear recommendations for UK executives based on the insights discussed:

Audit Your SaaS Ecosystem for Sovereignty Risks

Conduct a thorough review of all cloud software and SaaS applications your company uses. Identify which are U.S.-based or rely on U.S. infrastructure (including hidden dependencies like analytics or AI plugins). For each, evaluate what type of data is involved and how sensitive or regulated it is. This will help you prioritize which tools pose the greatest risk under the new geopolitical conditions. You may find some quick wins – e.g., a survey tool or file-sharing service that can be swapped out easily for a UK-based one – and some longer-term projects (like migrating from an American cloud platform to a UK or European alternative). Treat this like a supply chain audit; involve your CIO/CTO, Data Protection Officer, and compliance/legal teams. The goal is to map exposure and then plan for reducing it.

Prioritize Providers with UK-Based Infrastructure and Operations

When selecting new SaaS solutions or renewing contracts, make data residency and jurisdiction a key criterion. Insist that data related to UK employees or customers is stored in the UK (or at least in jurisdictions with adequacy decisions in place). Prefer vendors that guarantee UK/EU-only processing. Many global companies won’t contractually promise that, whereas a UK-local vendor will because that’s their default. Additionally, favor providers who have their support and development teams in the UK, which ensures easier communication and that any data you share for support stays onshore. Make it a question in your RFPs: “Do you rely on any U.S.-based technology (cloud platforms, AI services, etc.) as part of your solution?” – you might be surprised how many “Europe-based” software companies actually send data to U.S. sub-processors. Those that don’t will happily confirm it in writing. By building this requirement into your procurement, you send a message to the market and you gradually build a more self-reliant IT environment.

Engage with Legal and Stay Ahead of Regulatory Changes

Keep close tabs on evolving regulations in both the UK and U.S. The moment the UK’s data transfer regime to the U.S. looks in doubt (e.g., if there’s a legal challenge to the UK-U.S. data bridge similar to Schrems II), be prepared to pivot away from tools that depend on it. Monitor the CMA’s investigation outcomes – if they suggest remedies like easier switching or onshore data requirements, be ready to act or even participate in those discussions. Also watch for UK-specific rules like the FCA diversity measures or upcoming Online Safety Act provisions for corporate platforms; using compliant UK vendors like Divrsity can give you a head start . It’s wise to have a contingency plan: for critical U.S. SaaS that you can’t replace overnight (say, a major ERP system), pressure the vendor for a roadmap to offer UK hosting or isolation, and internally strategize how you would respond if suddenly transfers were halted (e.g., could you restrict certain data fields, encrypt content client-side, or in extreme case, exit the platform?). This kind of scenario planning is part of good governance in the current climate.

Embrace “Values-Based IT” – Align Tech Choices with Company Values

Start viewing your tech vendor decisions as an extension of your corporate values and ESG goals. If sustainability is a core value, ask whether your SaaS provider’s data centers are green and locally efficient. If diversity is a core value, ask for diversity stats of your vendor’s team or how their product supports inclusive practices. Many UK SaaS SMEs are led by passionate founders solving a specific problem (like inclusion with Divrsity) – partnering with them reinforces your own narrative around these issues. It becomes a virtuous circle: you live your values by example, your employees see consistency (they’re more likely to trust a D&I survey run by Divrsity than one run by a firm tangentially associated with anti-DEI sentiment abroad, consciously or not), and you differentiate yourself in the market as a company that truly walks the talk on supporting local and ethical tech. From an executive perspective, this alignment also simplifies decision-making. No longer is it just about feature A vs. feature B; it’s about a holistic fit with what your company stands for. That often makes the choice obvious.

Leverage the Strength of Local Partnerships

When you work with UK-based SaaS providers, don’t just be a customer – be a partner. Often these firms are more willing to co-develop features, take feedback, and even shape their roadmap around key clients’ needs. This is a stark contrast to being one of thousands of customers of a U.S. giant where your voice is a drop in the ocean. Take advantage of this closeness. For example, if there’s a reporting capability you need to meet a UK regulation, a UK vendor can likely build or tweak it rapidly (as Divrsity did for FCA reporting needs ). Offer to be a beta tester for new features. Perhaps even explore co-marketing opportunities – showcasing that you as a British firm improved outcomes by using British tech (it reflects well on both parties). By fostering these relationships, you not only get better service, you also help create an ecosystem of solutions tailored to UK businesses. In time, this network of tech partnerships can become a strategic asset – enabling faster innovation and response than competitors shackled to inflexible global vendors.

Communicate the Change

If you decide to switch from a U.S. SaaS to a UK one, communicate the why to your stakeholders. Explain to your board or budget holders that this is a strategic move to manage risk and uphold values (backed by all the evidence of risks we’ve covered). Explain to your employees, if it’s a tool they use or interact with, that you made this choice to better protect their data and respond to their needs. This can actually boost trust and morale – employees appreciate when leadership takes stands that favor their privacy and the company’s principles. From a customer perspective, if relevant, you can mention in security certifications or RFP responses that you keep data in-country and use locally compliant providers – which can be a selling point. Turning this into part of your brand story (if your brand is about trust, reliability, patriotism, etc.) can yield reputational dividends.