European Firms Seek Sovereign Clouds for Compliance, Resilience

Key Terms

sovereign cloud technical

A sovereign cloud is a cloud computing setup designed to keep data, systems and control within a specific country or legal jurisdiction so that local laws on privacy, security and government access are met. Think of it like storing valuables in a bank branch inside your own country with locked access and national oversight. For investors, it matters because demand, costs, regulatory approval and competitive advantage can be very different for services that meet these local rules.

data sovereignty technical

Data sovereignty is the principle that digital information is subject to the laws and control of the country or entity where it is stored or processed. For investors, it matters because where data lives affects a company's legal obligations, costs, ability to sell services across borders, and exposure to government access or restrictions — like owning a house that must follow the rules of the town it sits in.

zero-trust architectures technical

A zero-trust architecture is an approach to digital security that treats every user, device and request as untrusted until it is continuously verified, rather than assuming anything inside a network is safe. Think of it like an airport that checks IDs and tickets at every door instead of only at the front gate. For investors, zero-trust reduces the risk and potential cost of data breaches, supports regulatory compliance and helps protect a company’s operations and reputation, which can affect valuations and liability exposure.

confidential computing technical

Confidential computing is a technology that keeps data secure while it is being processed or analyzed, even from the systems that run the calculations. Think of it like a locked box where sensitive information is kept safe inside, no matter what happens during the work. This helps protect private data from unauthorized access, making it especially important for businesses and investors concerned about data privacy and security.

air-gapped environments technical

Air-gapped environments are computing systems or networks physically isolated from the internet and other external connections, like a computer kept in a locked room with no cables to the outside. Investors should care because this isolation greatly reduces hacking and data-leak risk but also makes software updates, data transfers, and collaboration slower or more costly, which can affect operational flexibility, compliance costs, and project timelines.

DevOps technical

DevOps is a way of working that combines software development and IT operations to improve how technology systems are built, tested, and maintained. It emphasizes collaboration, automation, and continuous improvement to deliver updates quickly and reliably. For investors, understanding DevOps can signal a company’s ability to innovate faster and respond more effectively to market changes.

disaster recovery technical

A plan and set of actions a company uses to restore its critical systems, data, facilities and operations after a major disruption such as a natural disaster, cyberattack or infrastructure failure. Investors care because strong disaster recovery reduces the chance of prolonged downtime, unexpected costs and lost revenue — like a business’s emergency backup and repairs that protect value, reputation and future cash flow.

sovereign AI infrastructure technical

Sovereign AI infrastructure is a country's controlled set of computing power, data storage and software arranged so AI systems are developed, hosted and operated under that nation's laws and inside its borders. It matters to investors because it shapes where companies must locate costly servers and services, creates demand for local cloud, hardware and compliance providers, and can change market access, costs and competitive risks—like choosing a local bank to hold sensitive assets.

Regulatory pressures, demand for digital autonomy increase use of cloud services based in the region, ISG Provider Lens^® report says

LONDON--(BUSINESS WIRE)-- European enterprises are accelerating their adoption of sovereign cloud solutions to address stricter regulations, geopolitical risk and growing demands for data sovereignty and transparency, according to a new research report published today by Information Services Group (ISG) (Nasdaq: III), a global AI-centered technology research and advisory firm.

The 2025 ISG Provider Lens^® Multi Public Cloud Services report for Europe finds that enterprises are expanding their use of sovereign clouds from niche deployments focused only on compliance toward foundational infrastructure to support workloads, services and AI platforms under EU jurisdiction. This shift is reshaping the provider landscape, increasing the momentum of both regional players and localized hyperscale offerings from global players.

“European enterprises are reclassifying sovereign cloud from a compliance safeguard to core infrastructure,” said Matthias Paletta, director at ISG. “Regulatory enforcement, security concerns and AI adoption are leading organizations to pursue resilient, transparent and locally governed cloud platforms for critical workloads.”

Regulatory alignment, operational resilience and commercial transparency are emerging as the most important criteria for choosing sovereign cloud platforms, especially in highly regulated industries, the report says. Organizations expect multizone EU-based infrastructure, customer-managed encryption keys and policy-driven services that support secure DevOps and disaster recovery. Enterprises are also placing greater emphasis on clear pricing models that offer visibility into capacity commitments, infrastructure usage and long-term costs, particularly for public sector deployments.

Accelerating enterprise adoption of AI is driving up demand for sovereign AI infrastructure to support training, inference and deployment under EU jurisdiction, ISG says. Providers are responding by embedding zero-trust architectures, automated compliance tooling and real-time threat detection into their solutions to help enterprises reduce exposure to insider threats and foreign surveillance.

To strengthen cloud security, organizations are deploying air-gapped environments, external key management and confidential computing. Procurement teams increasingly favor European-owned cloud providers to tighten control over governance, reduce legal exposure and achieve operational independence from entities outside the EU.

Enterprises seeking sovereign cloud services compare options based on data control, governance structures and alignment with national requirements, the report says. Global cloud providers are increasing investment in Europe with locally governed operating models designed to meet EU requirements. Regional providers are expanding local infrastructure for regulated and public sector environments across key European markets and industries.

“European enterprises are embedding sovereign cloud deeper into their IT strategies,” said Meenakshi Srivastava, lead analyst, ISG Provider Lens Research. “Regulations and risk management drive most adoption now, but in the coming years, more companies will expect services to include features such as open-source interoperability and sustainability compliance.”

The report also examines other trends in European cloud adoption, including enterprises’ growing use of advanced encryption and compliance automation and the expansion of sovereign cloud marketplaces that support flexible deployment models across Europe.

For more insights into the cloud-related challenges facing European enterprises, plus ISG’s advice for addressing them, see the ISG Provider Lens^® Focal Points briefing here.

The 2025 ISG Provider Lens^® Multi Public Cloud Services report for Europe evaluates the capabilities of 19 providers across one quadrant: Sovereign Cloud Infrastructure Services.

The report names AWS, Deutsche Telekom/T-Systems, Google, Microsoft, Oracle, Orange Business and OVHcloud as Leaders in the quadrant.

In the area of customer experience, LTIMindtree is named the global ISG CX Star Performer for 2025 among multi public cloud service providers. LTIMindtree earned the highest customer satisfaction scores in ISG's Voice of the Customer survey, part of the ISG Star of Excellence™ program, the premier quality recognition for the technology and business services industry.

Customized versions of the report are available from AWS, Deutsche Telekom/T-Systems and Orange Business.

The 2025 ISG Provider Lens^® Multi Public Cloud Services report for Europe is available to subscribers or for one-time purchase on this webpage.

About ISG Provider Lens^® Research

The ISG Provider Lens^® Quadrant research series is the only service provider evaluation of its kind to combine empirical, data-driven research and market analysis with the real-world experience and observations of ISG's global advisory team. Enterprises will find a wealth of detailed data and market analysis to help guide their selection of appropriate sourcing partners, while ISG advisors use the reports to validate their own market knowledge and make recommendations to ISG's enterprise clients. The research currently covers providers offering their services globally, across Europe, as well as in the U.S., Canada, Mexico, Brazil, the U.K., France, Benelux, Germany, Switzerland, the Nordics, Australia and Singapore/Malaysia, with additional markets to be added in the future. For more information about ISG Provider Lens research, please visit this webpage.

About ISG

ISG (Nasdaq: III) is a global AI-centered technology research and advisory firm. A trusted partner to more than 900 clients, including 75 of the world’s top 100 enterprises, ISG is a long-time leader in technology and business services that is now at the forefront of leveraging AI to help organizations achieve operational excellence and faster growth. The firm, founded in 2006, is known for its proprietary market data, in-depth knowledge of provider ecosystems, and the expertise of its 1,600 professionals worldwide working together to help clients maximize the value of their technology investments.

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Press Contacts:



Laura Hupprich, ISG

+1 203 517 3100

laura.hupprich@isg-one.com



Philipp Jaensch, ISG

+49 151 730 365 76

philipp.jaensch@isg-one.com

Source: Information Services Group, Inc.