Sovereign Cloud in the EU: Providers, Challenges, and Opportunities

Europe is determined to take charge of its digital destiny. The EU sovereign cloud movement is central to this mission — ensuring that data, workloads, and operations remain under European technical and legal control. It is a vital part of the broader EU digital sovereignty agenda.

Cloud sovereignty goes beyond data residency. It ensures that data, metadata, backups, and system logs are physically located within the EU or designated partner countries and governed by regional law. It also establishes architectural, contractual, and organizational controls that prevent foreign surveillance while enabling interoperability within the EU.

Leading European Sovereign Cloud Providers

While US hyperscalers still account for roughly 70 percent of Europe’s cloud market, several European providers are emerging as leaders in the race for sovereignty. Notable examples include:

• SAP: Offers comprehensive sovereign cloud services for the EU, providing locally governed technology stacks for enterprise innovation.
• T-Systems / Open Telekom Cloud (DE): Operates European data centers managed by EU personnel. Compliant with GDPR and NIS2 by design, offering hybrid sovereign cloud models in partnership with hyperscalers.
• OVHcloud (FR): Delivers fully regional infrastructure aligned with GDPR, NIS2, and other European regulatory requirements.
• STACKIT (DE): Part of the Schwarz Group, STACKIT offers a sovereign cloud platform operated entirely within Germany. It focuses on enterprise-grade scalability and strict compliance with EU and national regulations.
• CloudFerro: Active member of federated projects like Virtuora and Gaia-X, building interoperable, EU-owned cloud ecosystems.
• Virtuora Federated Infrastructure: A pan-European network connecting providers such as Arsys, BIT, Infobip, Kontron, Oktawave, Clever Cloud, Scaleway, and Stackscale. It enables workload portability and sovereignty through open-source technologies.
• Scaleway (FR): A European alternative to hyperscalers focused on supporting EU digital independence.
• Exoscale (CH/EU): Guarantees data localization by region and full GDPR alignment.
• Hetzner (DE): Operates a “made in Germany” cloud ensuring EU data residency and compliance.

These providers represent a growing ecosystem of European solutions committed to local governance and sovereignty-ready infrastructure. For an extended overview, see the best European alternatives to Big Tech.

Key Challenges Slowing Adoption

Despite the rapid policy momentum, many organizations face structural and operational barriers when moving to sovereign cloud solutions:

Vendor Lock-in
Most European enterprises have long-term contracts with US hyperscalers, making immediate transitions complex. At the same time, they are wary of creating new dependencies with proprietary sovereign providers. The solution lies in federated, open-source cloud stacks like Gaia-X and Virtuora, which promote interoperability and portability across providers.

Cost of Compliance
Sovereign clouds require significant ongoing investment in infrastructure, legal expertise, and compliance operations. Providers must operate certified local data centers, implement advanced cybersecurity controls, and enable real-time monitoring and automated reporting. This increases operational complexity and cost compared to generic public cloud services.

Integration Complexity
Integrating sovereign cloud solutions into existing enterprise systems can be challenging — especially when national data-protection rules differ. Migrating from single-vendor architectures to federated models requires shared schemas, unified identity management, and consistent logging across providers.

Regulatory Drivers Behind the Movement

European data privacy laws form the foundation of the sovereign cloud initiative:

• General Data Protection Regulation (GDPR): Establishes strict controls on how personal data is stored, processed, and transferred, ensuring EU jurisdiction and legal accountability worldwide.
• NIS2 Directive: Requires critical infrastructure operators and digital service providers to maintain unified cybersecurity programs and incident-reporting protocols. It reinforces the need for resilient, EU-based infrastructure and trusted communication. See our NIS2 compliance insights.
• Other frameworks: The Data Governance Act, Digital Markets Act, and national certifications such as France’s SecNumCloud and Germany’s C5 are setting higher standards for localization, transparency, and access control.

To understand how these laws interact with international surveillance risks, see EU digital sovereignty vs Big Tech encryption and CLOUD Act and EU data sovereignty.

Opportunities for Growth and Innovation

The rise of sovereign cloud infrastructure is opening new pathways for innovation across Europe:

• Open-source cloud stacks: Projects such as OpenNebula, the Sovereign Cloud Stack (SCS), and Gaia-X enable transparency, interoperability, and independence from foreign vendors, driving community-based innovation.
• Federation and interoperability: Initiatives like Virtuora facilitate seamless cross-border resource sharing and support collaborative AI and edge workloads under EU governance.
• Trusted digital ecosystems: The European Alliance for Industrial Data, Edge, and Cloud is building ethical, data-sovereign marketplaces to accelerate research and industrial collaboration across the EU.

Together, these initiatives foster an open, federated, and sovereign European cloud landscape — one that strengthens security while boosting competitiveness.

Conclusion

The EU’s push for cloud and digital sovereignty reflects its commitment to data protection, resilience, and independence from foreign jurisdictions. With coordinated regulation, strong investment, and collaboration across public and private sectors, Europe can build a mature, federated, and sovereign cloud ecosystem that balances innovation with control.

Discover how Wire supports Europe’s digital sovereignty goals by delivering secure, end-to-end encrypted communication and collaboration trusted by governments and enterprises across the EU. Contact our team to learn more.