IONOS research reveals UK small businesses lead the way with AI adoption
The study found that over a third of UK SMBs are deploying AI, the highest rate of AI usage in Europe, yet challenges still exist for ongoing digitalisation
Manchester, April 15, 2025
New research from IONOS, the leading European digitalisation partner for small and medium-sized businesses (SMBs), has revealed that nearly 4 in 10 UK SMBs (37%) are leveraging the transformative power of AI to grow their business, up from just 20% in 2024.
For the fifth consecutive year, IONOS, in partnership with YouGov, polled 1,026 British organisations with up to 250 employees, to understand how digitalisation is supporting business priorities. The study uncovered the factors that are considered important for driving business performance and any challenges holding SMBs back.
AI creates value
The UK has the highest rate of AI usage at 37%, compared to Germany and Spain with 32% and France with just over a quarter (26%). The top benefits of AI, according to respondents, include simplifying and speeding up processes (45%), creative ideation (41%) and relieving staff of standard tasks (39%).
Compared with IONOS’ SMB AI study from 2023, creative ideation has seen a notable increase – almost ten percentage points – reflecting AI’s expanding role beyond traditional process automation. Other benefits with high increases include support with product development (up 11 percentage points) and competitive advantage over rivals (up 9 percentage points.)
Despite an increase in AI adoption, there are still barriers holding many small and medium sized businesses back from their ongoing digitalisation journeys. Lack of time (46%) and costs (54%) remain the most prominent, unchanged from the last two years.
Website development is the biggest investment priority at 40%, compared to AI adoption at 27%, although the latter has risen from 16% last year and is the biggest change across all areas.
Achim Weiß, CEO of IONOS, commented:
“I understand the challenges that SMEs face. But the assumption that digitalisation is too complex, too expensive and too insecure is no longer true. More and more SMEs are recognising the value of AI to improve the entire online presence, from website design to email marketing. At IONOS, we’re making these technologies accessible and affordable for everyone.”
Digital sovereignty
Against a backdrop of global political developments, the majority (82%) of UK small businesses believe it’s important to have guaranteed control over their data when selecting a web hosting or cloud provider. When it comes to the key focus areas of their company’s digitalisation, however, IT security and data protection are only a priority for half (49%) with 83% wanting the technology providers themselves to ensure protection of their personal data and business secrets from access by foreign authorities.
Weiß said: “The UK economy needs strong, digitalised SMEs – especially in times like these. In this day and age, it’s critical that technology providers can guarantee true digital sovereignty. We provide simple, affordable solutions for digital success that are GDPR-compliant, developed on our own tech stack with the data remaining in our data centres in the UK and Europe.”
He continued: “AI can be a real game changer for SMEs when it comes to digitalisation! At IONOS we make modern key technologies such as AI and the cloud affordable, easily, and securely accessible so that customers can focus on the essentials: their ideas, their core business and their customers.”
