Datadog to launch UK data centre for regulated cloud

Datadog has outlined plans for a new UK data centre presence, adding local data storage capacity as more regulated organisations move critical workloads to the cloud and face tighter expectations around data residency and governance.

The UK presence will sit alongside Datadog's existing service locations in North America, Asia and Europe. The move responds to growing demand from sectors where procurement, privacy and security requirements can limit the use of cloud services that store operational data outside the country.

Operational data includes information generated by applications and infrastructure, such as logs, metrics and traces. For regulated customers, data location can affect supplier selection, contract terms and which services they can adopt.

The UK data centre presence will allow partners and customers to keep operational data stored in the UK. Local storage may also reduce latency for users accessing services from within the country. Customers will be able to use Datadog's observability and security platform from a single UK-resident environment.

Partner focus

Datadog's UK plans emphasise the channel, linking local data residency to partner-led demand in the public sector and regulated industries. Steve Barrett, VP EMEA at Datadog, said the initiative will widen the market available to partners working with government bodies and heavily regulated enterprises.

"This creates significant opportunities for UK partners, particularly those supporting the public sector and regulated industries. It expands the addressable market for partners who can extend their portfolio with a unified observability and security platform. More broadly, it reinforces Datadog's long-term investment in the UK and our commitment to supporting customers as their regulatory, compliance and operational needs evolve."

Partner activity in the UK has increased, with more partners sourcing and influencing deals. Datadog attributed the trend to rising demand for observability and AI-driven operations in large organisations running complex cloud estates.

Barrett said Datadog has invested in sales training, technical enablement and partner campaigns to reduce friction in joint selling and increase the number of shared opportunities.

"Channel momentum in the UK has accelerated significantly, with strong growth in partners sourcing and influencing deals as demand for observability and AI-driven operations continues to grow. We've heavily invested in sales training, technical enablement and targeted partner campaigns to help remove friction, sell together and generate joint opportunities," Barrett said.

Datadog also highlighted partners' role in navigating long procurement cycles and compliance checks in regulated markets. "In regulated industries, procurement and compliance cycles are complex, and partners provide the local expertise and credibility needed to navigate them. As enterprises scale cloud and AI workloads, partners also play a critical role in helping customers implement observability and security correctly from day one," Barrett said.

Regulated demand

The announcement comes as many UK organisations adopt hybrid and multi-cloud approaches. Datadog cited a financial services survey by LSEG that found 82% of firms operate in multi-cloud or hybrid environments.

Public sector technology spending also represents a large addressable market for cloud and monitoring vendors. Datadog cited GOV.UK figures that put annual digital technology spend above £26 billion, with around 60% of IT systems running on cloud infrastructure.

Data governance is another driver. Datadog pointed to changes introduced under the Data (Use and Access) Act 2025, which have increased attention on where operational data is stored and processed. For IT and security leaders, these requirements can influence tooling decisions, particularly where observability data could contain sensitive context about systems and user activity.

Yanbing Li, Chief Product Officer at Datadog, said data residency has shifted from a policy issue to an operational constraint for organisations running critical cloud services and AI workloads.

"As more organisations modernise and run critical systems in the cloud and deploy AI, where operational data is stored has become a practical constraint, not just a compliance question," Li said. "This launch reflects our continued investment in building regional infrastructure to meet that reality. For the public sector and highly regulated industries such as financial services and healthcare, storing data locally is critical. The UK data centre presence gives customers a way to adopt modern observability and security without compromising in-region data storage."

Datadog said its full range of products and services will be supported in the UK data centre presence, which it expects to open later in 2026.