Microsoft is building a new UK data centre for Office 365 customers. This new data centre will go live sometime in 2016 and become the default cloud hosting location for new Microsoft Office 365 customers.
Currently UK Office 365 users have their data stored in the nearest available EU data centre (either Eire or The Netherlands). For most SMEs this arrangement doesn't impact data protection as transfer of information within the EEA is acceptable (though do check with the ICO if you are unsure - this news item doesn't constitute legal advice) however for some organisations UK storage is essential. This changeover will make Microsoft Office 365 a viable option for cloud storage, email, and productivity tools.
The Microsoft Office 365 UK data centre will also provide UK hosting for Azure customers and is part of Microsoft's £1.32 billion European cloud infrastructure investment.