The growing concerns over data sovereignty and compliance makes any enterprise decision-maker wary. . Many organisations in different regions are now considering sovereign cloud solutions to address these regulatory and operational needs. By 2025, industry analysts predict a sizeable portion of major companies will have transitioned some workloads to domestic cloud providers. This trend towards sovereign clouds presents both opportunities and challenges which one must evaluate. Carefully weighing the benefits against drawbacks will enable organisations to make the right choice for its future in the cloud.

Understanding Data Sovereignty Concerns

Location of Data Storage and Processing

• With data sovereignty laws, the physical location of data storage and processing becomes crucial. Many regulations mandate that certain types of data must remain within national borders. Enterprises looking to adopt sovereign cloud solutions must ensure that their data resides in data centres located within the country or region specified in relevant laws.

Control and Access

• Sovereign clouds also provide more control and oversight over data access. Enterprises can implement security controls to monitor and restrict access to authorized personnel. They can also audit how their data is accessed and used to comply with data privacy laws. With sovereign cloud adoption, enterprises maintain more direct control and governance over their data.

Compliance with Data Regulations

• By utilising sovereign cloud services, enterprises can more easily comply with regional data protection laws and privacy regulations. Sovereign cloud providers build their services to comply with the data regulations of the target region or country. They provide features and controls tailored to support compliance with laws such as GDPR, PIPEDA, or HIPAA. For enterprises, this simplifies the process of achieving and maintaining compliance with multiple data regulations.

Collaboration and Interoperability

• Sovereign cloud adoption enables new opportunities for secure data sharing and collaboration within regions and industries. With the appropriate controls and oversight, sovereign clouds can facilitate data exchange between enterprises, government agencies, and other parties. They provide a compliant foundation for building new data-driven partnerships and digital ecosystems within countries and regions.

In summary, data sovereignty concerns relating to location, control, compliance, and collaboration are driving enterprises to consider sovereign cloud solutions. For those looking to leverage the benefits of cloud computing while satisfying data regulations, sovereign clouds can provide an ideal environment supported by providers focused on regional data governance and protection. With the expected growth in sovereign cloud adoption, these solutions will become a key enabler of innovation within regulated industries and the digital economy.

The Rise of Sovereign Clouds

Regulatory Compliance

• To comply with data sovereignty laws and regulations, enterprises are adopting sovereign cloud solutions. These clouds are physically located within a country’s borders and operated by local providers, enabling organizations to securely store and process data in-country. By leveraging sovereign clouds, companies can adhere to geographic restrictions on data movement and comply with laws like GDPR.

Operational Benefits

• In addition to regulatory compliance, sovereign clouds offer operational benefits. Local cloud providers may have a stronger understanding of regional business practices, cultures, and customer needs. They can also provide support and services in the local language. Enterprises may find it easier to work with a provider operating in the same time zone and be able to quickly dispatch technical resources if needed.

Vendor Lock-In Concerns

• While sovereign clouds address data sovereignty and compliance requirements, some organizations are concerned about vendor lock-in. Reliance on a single local provider could limit flexibility and choice. To mitigate this risk, companies should evaluate multiple sovereign cloud providers, and consider a multi-cloud strategy where possible. Standardizing open technologies and maintaining data in a portable format can also make it easier to switch providers if needed.

The Future is Multi-Cloud

• Looking ahead, most analysts expect enterprises to adopt a multi-cloud approach, leveraging both sovereign and global public cloud providers. Sovereign clouds will be used for workloads that require in-country data residency and compliance. Global clouds will handle other workloads, enabling organizations to benefit from a wide range of services, innovation, and potentially lower costs. With a thoughtful multi-cloud strategy, companies can balance data sovereignty needs with flexibility and choice.

Benefits of Adopting a Sovereign Cloud

Meet Data Residency and Compliance Requirements

• By utilising a sovereign cloud provider that stores and processes data within national borders, organisations can adhere to data residency and compliance regulations set by local governments. Sensitive data is kept within the region, allowing companies to maintain control and oversight over their information.

Enhanced Security and Privacy

• Sovereign cloud providers implement additional security controls and governance frameworks to protect customer data. Strict data privacy laws are followed to safeguard sensitive information and communications. Robust identity and access management, threat detection, and other security tools help reduce risks.

Improved Performance

• A sovereign cloud located within a region can provide lower latency and faster service delivery for local customers. Content and applications are hosted closer to end users, resulting in an improved experience. This is particularly important for workloads that require high performance and bandwidth.

Promote Digital Sovereignty

• By choosing a sovereign cloud provider, organisations support the digital sovereignty of their country or region. Data and services stay within local infrastructure, and investments in technology benefit regional economies. This also helps address concerns over foreign surveillance and the influence of large multinational technology companies.

Facilitate Hybrid Cloud Adoption

• For companies not ready to move all workloads to the public cloud, a sovereign cloud provider enables a hybrid cloud model. Sensitive data and applications can be kept in the sovereign cloud, while other workloads are hosted with global public cloud providers or on-premises infrastructure. This provides more deployment flexibility and control over data placement.

To summarise, sovereign clouds offer distinct advantages for enterprises concerned with data security, privacy, residency, and compliance. By addressing these key issues, organisations can confidently leverage cloud resources to gain efficiencies, support innovation, and better serve customers. A sovereign cloud strategy, combined with a global cloud provider, gives companies the best of both worlds.

Challenges in Migrating to a Sovereign Cloud

Data Sovereignty and Compliance

• When migrating workloads to a sovereign cloud, enterprises must ensure that their data remains within the specified geographical boundaries to comply with data sovereignty laws and regulations. This requires evaluating the sovereign cloud provider’s data storage and security practices to guarantee data is kept locally. Enterprises will also need to re-architect some applications and data stores to align with the sovereign cloud’s architecture.

Integration Complexity

• Integrating the sovereign cloud environment with existing on-premises infrastructure and public cloud resources can be complicated. Enterprises will have to set up dedicated network connections and implement identity and access management controls between environments. They will also need to re-platform some workloads to work within the sovereign cloud’s infrastructure.

Limited Functionality

• Sovereign clouds may provide limited functionality and services compared to major public clouds. Enterprises will have to determine if the sovereign cloud environment can support all their workload requirements or if some applications and data will need to remain on-premises or in a public cloud. They must also be willing to accept reduced innovation and new feature rollouts.

Cost

• While sovereign clouds aim to provide cost-effective infrastructure, their smaller scale can translate to higher prices for certain resources. The costs to connect and manage the sovereign cloud environment must also be considered. For some workloads, a sovereign cloud may end up costing more than an on-premises or major public cloud deployment. Enterprises will need to evaluate their options based on both cost and compliance factors.

Migrating to a sovereign cloud is a complex undertaking that requires careful planning and preparation to address potential challenges. By understanding limitations and risks upfront, enterprises can make the best choice for their sovereign cloud strategy and migration approach. With the proper controls and governance in place, they can benefit from the data sovereignty and compliance a sovereign cloud environment facilitates.

The Future of Sovereign Cloud Adoption

As enterprises increasingly adopt sovereign cloud solutions to address data sovereignty and compliance requirements, the market for sovereign cloud services is poised for significant growth. According to industry analysts, up to 60% of major companies in Europe are expected to utilize sovereign cloud providers for certain workloads by 2025.

Increasing Demand for Data Sovereignty

• With the implementation of regulations like GDPR, companies have become acutely aware of the need to maintain control of customer data. Storing and processing data in sovereign clouds located within national borders helps ensure compliance with data sovereignty laws and gives companies more oversight into how their data is handled.

Specialized Services

• Sovereign cloud providers offer infrastructure and services tailored to the needs of customers in specific regions or countries. They can provide localized support and ensure that data centres, networks, and staff meet regional standards for security and compliance. Some also give customers more flexibility and control over how their data is encrypted and accessed.

Hybrid Cloud Adoption

• Rather than moving all workloads to sovereign clouds, most companies are opting for a hybrid cloud approach. They maintain certain sensitive data and applications on sovereign clouds but continue to utilize major public cloud providers for other workloads. This hybrid model allows them to balance compliance requirements with the advanced capabilities of large cloud platforms.

Challenges to Overcome

• While sovereign clouds solve critical issues around data sovereignty, they also present some challenges that providers and customers must address. Sovereign clouds may lack the scale and range of services offered by major platforms. They can also be more expensive to implement and maintain. Compatibility and interoperability with other clouds may require additional effort.

With strong demand for compliant and localized cloud services, sovereign cloud adoption is likely to accelerate in the coming years. Close collaboration between providers and customers will be needed to overcome challenges and ensure sovereign clouds meet key business needs. With the right approach, sovereign clouds and major public clouds can work together to provide secure and innovative solutions.

Key Takeaways

As the benefits of sovereign cloud become increasingly apparent, adoption is poised to accelerate across the region. With data privacy and security at the forefront, enterprises must evaluate providers not just on technical capabilities but also on their ability to address compliance and regulatory requirements. Though transitioning workloads involves cost and effort, the long-term payoff for your organisation in data protection and jurisdiction control will make the move worthwhile. Carefully assess your options, engage experts to ensure a smooth migration, and get ready to join the wave of businesses realising the advantages of the sovereign cloud.