European businesses are increasingly adopting sovereign cloud solutions, driven by a confluence of evolving regulatory landscapes, geopolitical considerations, and a growing demand for digital autonomy. A recent report from Information Services Group (ISG) highlights this trend, indicating a significant shift from niche compliance applications to sovereign cloud infrastructure serving as a foundational element for critical workloads, services, and artificial intelligence platforms within the European Union’s jurisdiction. This evolution is not only reshaping enterprise IT strategies but also altering the competitive dynamics within the cloud provider ecosystem, fostering growth for both regional players and localized offerings from global hyperscalers.
The report, “2025 ISG Provider Lens® Multi Public Cloud Services,” observes that European enterprises are reclassifying sovereign cloud from a mere compliance safeguard to a core component of their technological infrastructure. Key drivers behind this reclassification include stringent regulatory enforcement, heightened security concerns, and the burgeoning adoption of AI technologies. Consequently, organizations are prioritizing cloud platforms that offer resilience, transparency, and local governance for their most critical operations.
For enterprises, particularly those in heavily regulated sectors, the selection of sovereign cloud platforms is increasingly influenced by criteria such as regulatory alignment, operational resilience, and commercial transparency. A strong preference is emerging for multi-zone, EU-based infrastructure, coupled with customer-managed encryption keys and policy-driven services that facilitate secure DevOps practices and robust disaster recovery capabilities. Furthermore, there’s a heightened emphasis on clear, predictable pricing models that provide visibility into capacity commitments, infrastructure utilization, and long-term cost implications, especially for public sector procurements.
The accelerating pace of AI adoption across enterprises is a significant catalyst, fueling demand for sovereign AI infrastructure capable of supporting training, inference, and deployment under EU jurisdiction. In response, cloud providers are integrating advanced security measures into their solutions, including zero-trust architectures, automated compliance tools, and real-time threat detection mechanisms. These features aim to mitigate risks associated with insider threats and foreign surveillance, offering enterprises greater control and security over their sensitive data and AI models.
To further bolster cloud security, organizations are actively deploying air-gapped environments and external key management solutions, alongside confidential computing technologies. Procurement decisions are also increasingly favoring European-owned cloud providers, reflecting a strategic imperative to strengthen governance, minimize legal exposure, and achieve operational independence from entities outside the EU.
When evaluating sovereign cloud services, enterprises are scrutinizing providers based on their data control capabilities, governance frameworks, and alignment with national regulatory requirements. In response, global cloud providers are making substantial investments in Europe, establishing locally governed operating models designed to meet EU standards. Concurrently, regional providers are expanding their local infrastructure to cater to the specific needs of regulated industries and public sector clients across key European markets.
“European enterprises are embedding sovereign cloud deeper into their IT strategies,” noted Meenakshi Srivastava, lead analyst at ISG Provider Lens Research. “While regulations and risk management currently drive most adoption, the coming years will likely see an increased expectation for services that incorporate features like open-source interoperability and sustainability compliance.”
The ISG report also sheds light on other significant trends in European cloud adoption, including the growing use of advanced encryption techniques, the expansion of compliance automation, and the development of sovereign cloud marketplaces that enable flexible deployment models across the continent.
The “2025 ISG Provider Lens® Multi Public Cloud Services” report for Europe evaluates 19 providers across the Sovereign Cloud Infrastructure Services quadrant. Key players recognized as Leaders in this quadrant include AWS, Deutsche Telekom/T-Systems, Google, Microsoft, Oracle, Orange Business, and OVHcloud. In terms of customer experience, LTIMindtree was named the global ISG CX Star Performer for 2025 among multi-public cloud service providers, based on exceptional customer satisfaction scores.
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