European organizations are ramping up their investments in sovereign cloud infrastructure at a rapid pace. Driven by geopolitical tensions and concerns over dependence on US tech giants, they are increasingly turning to local cloud options. This shift signals a major change in how European entities approach their cloud strategies and digital sovereignty.

Surging Investment in Sovereign Cloud IaaS

According to a forecast from Gartner, European spending on sovereign cloud infrastructure as a service (IaaS) will nearly double from $6.9 billion in 2025 to $12.6 billion in 2026. That’s an 83% jump in just one year. Gartner also predicts this number will nearly double again in 2027, reaching $23.1 billion, as political and security concerns continue to grow.

Overall, global spending on sovereign cloud IaaS is expected to hit $80.4 billion this year, rising to $110 billion by 2027. Most of this demand is coming from public sector agencies, followed by heavily regulated industries like finance, healthcare, and energy companies such as telecoms and utilities. The focus on digital sovereignty reflects a desire to keep critical data and services within local borders, reducing reliance on foreign providers.

Geopolitical Factors and Local Cloud Adoption

European worries about dependence on US hyperscalers have been building for years but intensified recently as tensions between Europe and the US have increased. Concerns about political interference or restrictions on cloud access have prompted many organizations to consider local alternatives more seriously. For example, there was a notable incident involving the International Criminal Court last year, where some staff faced disruptions related to cloud service access.

Many European companies now see investing in sovereign cloud services as a way to strengthen the domestic cloud ecosystem. Some are committing to allocate a certain percentage of their revenue to local providers. However, experts say a complete shift away from existing global providers isn’t likely or practical due to high costs and complexity. Most organizations will instead adopt a hybrid approach, moving older workloads or new applications to local clouds while maintaining existing relationships with hyperscalers.

Gartner predicts that by 2029, around 20% of workloads will move from hyperscalers to local cloud providers worldwide, with Europe seeing slightly higher figures. This could include banks migrating core systems or SaaS companies choosing local infrastructure. While this trend poses a challenge to US-based cloud giants, Gartner expects some of the reallocated spending to still flow to US-owned sovereign cloud services, especially those with strong local presence and compliance standards.

Overall, the shift toward sovereign cloud IaaS highlights a growing emphasis on digital independence and security. European organizations are balancing the benefits of global cloud services with the need for control and resilience. The coming years will be crucial in shaping the landscape of cloud infrastructure across the continent and beyond.

Inspired by

• https://www.computerworld.com/article/4129552/gartner-european-spending-on-sovereign-cloud-iaas-to-nearly-double-in-2026.html