Today, 144 countries and counting have enacted some form of data protection and sovereignty laws1. But it’s not just governments—businesses, too, are scrutinizing where their cloud data lives and what jurisdiction governs it. The drive for digital sovereignty is now both a regulatory imperative and a strategic business priority. 

The momentum behind Europe’s sovereign cloud push is accelerating. According to IDC research, 84% of European organizations using cloud technologies are either currently using or planning to use sovereign cloud solutions2. At its core, this movement is about ensuring that critical data is stored and managed within European borders—reducing dependence on foreign jurisdictions and enhancing control over digital assets. Beyond regulatory compliance, data sovereignty enables European companies to foster customer trust, gain competitive advantage, and drive innovation by aligning digital operations with regional values and strategic autonomy. The demand is fuelled by growing concerns around data privacy, cybersecurity, and geopolitical instability, as well as the operational risks exposed by global supply chain disruptions and trade tensions.

By 2030, enterprise cloud data flows in most European countries is expected to grow 2–3x. This underscores the growing importance of sovereign cloud infrastructure for business growth3.

Economic value of enterprise cloud-based data flows in Europe by Country 2024 vs 2030 (€Bn)

BPoV Data Sovereignty

The period 2023–2025 has been pivotal: the EU rolled out landmark regulations (Data Governance Act, Digital Markets Act, Data Act) and forged new frameworks (like the EU–US DPF) that together tighten control over data while trying to foster a competitive digital economy. With initiatives like Gaia-X, the region is building an ecosystem where data governance aligns with European values of privacy, security, and transparency. The EU is also actively engineering a future-proof digital economy. Government agencies, critical infrastructure providers, and private enterprises are aligning behind a shared goal of maintaining control over their most critical data assets.

Industries are moving fast: 

  • SAP: Investing €2 billion in sovereign cloud infrastructure4. Delos Cloud (via Microsoft Azure tech) and a fully SAP-operated option allow government and industrial clients to use secure cloud services with data kept within German jurisdiction.
  • Airbus: Through Gaia-X, Airbus is developing an Aerospace Data Space by 2026 to connect around 10,000 suppliers, ensuring that all sensitive and operational data stays under European control via a federated, sovereign data-sharing model5.
  • BMW group: As an early adopter of Catena-X—a data space initiative with nearly 200 members—the company leverages secure, standardized data sharing to improve quality management, accelerate issue resolution, and ensure compliance with EU data sovereignty standards6.

The next phase of data sovereignty will be shaped by several key trends:

  • Sovereign tech evolution: By 2030, the EU’s Digital Decade targets aim for 75% of EU enterprises to be using advanced cloud/AI services (up from ~45% using cloud in 2023)7. This will drive growth in Gaia-X-aligned services and trusted data spaces in sectors like healthcare, energy, and finance.
  • Enforcement & Litigation: The EU Data Privacy Framework and Data Act will test businesses’ readiness. Legal challenges may reshape frameworks, requiring agility in data localization and compliance.
  • AI and Data Sovereignty: AI’s reliance on large datasets makes data sovereignty both a constraint and an innovation driver. A new technique called ‘federated learning’ allows AI to learn from data without moving it, keeping sensitive information secure and local.

Achieving the full value of data sovereignty requires overcoming challenges such as cost, technical complexity, and limited solution availability. Businesses can address these by partnering with trusted sovereign cloud providers and adopting open, interoperable platforms to maintain flexibility and control.

Building digital trust

For companies operating in Europe, data sovereignty is no longer optional—it's a strategic design imperative. It must be embedded across infrastructure, contracts, products, and risk frameworks. This isn’t just about compliance; it’s about building digital trust that customers, regulators, and partners increasingly expect.

Now is the time to act. Organizations should assess where their data resides, update supplier agreements, and adopt compliant cloud strategies. Engaging with initiatives like Gaia-X and seeking expert guidance will be key to shaping a secure, sovereign digital future in Europe.

Would you like more information?

If you want to get more information about this insight please get in touch with our experts who would be pleased to hear from you.

Leverage technology to accelerate your business

Read more