- What Is Digital Sovereignty and Why Does It Matter for Europe?
- The Data Explosion and Why Europe Is Reacting Now
- The Legal and Ethical Imperatives Behind Sovereign Cloud Choices
- Levels of Sovereignty: Residency, Sovereignty, and Jurisdictional Control
- Why Europe Needs Its Own Cloud Ecosystem
- The Regulatory Landscape Shaping Europe’s Cloud Strategy
- Key Features to Look for in a European Cloud Provider
- A Roadmap to Digital Sovereignty (5-Step Framework)
- Top European Cloud Providers Supporting Digital Sovereignty
- Case Study – Scaling a Global Environmental Platform
- Industry-Specific Requirements for Sovereign Cloud
- Gaia-X and the Future of Federated Cloud Infrastructure
- Sovereign AI — The Next Stage of European Autonomy
- Challenges in Adopting EU Cloud Providers
- How to Choose the Right EU Cloud Provider
- Conclusion
- Download our Digital Sovereignty Readiness & EU Cloud Assessment Guide
What Is Digital Sovereignty and Why Does It Matter for Europe?
The vast majority of cloud infrastructure today is controlled by U.S.-based hyperscalers like Amazon Web Services (AWS), Microsoft Azure, and Google Cloud.
These companies operate under U.S. law — most notably the CLOUD Act, which gives U.S. authorities the right to access data, even if it’s stored in European data centers.
This legal loophole creates an enormous risk. European governments, hospitals, banks, and startups often host sensitive workloads on foreign infrastructure without realizing they’re potentially exposing themselves to surveillance, data requests, and jurisdictional conflicts. Digital sovereignty is about correcting that imbalance — ensuring that European data stays in Europe, governed by European laws.
But it’s more than just regulation. Digital sovereignty also touches on values — privacy, transparency, innovation, and economic sustainability. It’s a vision of a Europe that’s not just connected, but digitally independent.
The Data Explosion and Why Europe Is Reacting Now
Europe is generating data at unprecedented speed. Global data volumes grew from 33 zettabytes in 2018 to an estimated 175 zettabytes by 2025 — doubling roughly every 18 months. Yet despite this growth, the majority of European data is stored on infrastructure outside the EU, often governed by foreign laws.
The challenge is not just the volume of data, but the sensitivity of what is being collected:
health records, financial data, industrial telemetry, geolocation streams, and now AI training datasets.
Even metadata — logs, diagnostics, access patterns — can reveal valuable operational insights.
Rising cyberattacks, geopolitical tension, and the accelerating adoption of AI have pushed European regulators to tighten control over where data resides, how it moves, and who can legally access it.
Digital sovereignty is Europe’s answer to protecting its data economy while enabling innovation.
The Legal and Ethical Imperatives Behind Sovereign Cloud Choices
When a European organization uses a U.S.-based cloud provider, it may be fully GDPR-compliant on paper, but in reality, there’s a major legal contradiction. That’s because foreign laws can override EU protections through extraterritorial reach. The U.S. CLOUD Act is a prime example. It allows American law enforcement to demand access to data, no matter where it’s stored, as long as it’s held by a U.S.-controlled entity.
This creates a fundamental conflict with the General Data Protection Regulation (GDPR) — which mandates strict data processing, protection, and transparency rules for all EU citizens. If a cloud provider is subject to both laws, whose orders do they follow?
This ethical and legal tension has spurred the development of sovereign cloud solutions. EU-based cloud providers offer an escape from this conundrum. They’re headquartered and operated under European jurisdiction, meaning they can comply fully with EU data protection laws without foreign interference.
Levels of Sovereignty: Residency, Sovereignty, and Jurisdictional Control
Not all “sovereign clouds” offer the same guarantees. European organizations need to distinguish three layers of control:
1. Data Residency
Where the data physically lives. Hosting data in the EU ensures GDPR applies, but it does not eliminate risks if the provider is subject to foreign laws.
2. Data Sovereignty
Which legal system governs the data. True sovereignty ensures all processing, backup, and metadata are controlled by EU regulations only.
3. Jurisdictional Control
Who can compel access to the data.
Even if stored in Frankfurt or Paris, data managed by a foreign-owned company may still fall under the CLOUD Act or other extraterritorial laws.
This framework helps organizations evaluate whether a cloud provider truly protects their data — or simply meets residency requirements on paper.
Why Europe Needs Its Own Cloud Ecosystem
Dependency on Foreign Hyperscalers
As of 2025, American tech giants control more than 70% of Europe’s cloud infrastructure. That’s a staggering figure — and one that leaves little room for self-determination.
Let’s take, for example, Belgium – Microsoft (with US stored data) has 70% of the market for cloud infrastructure. In Sweden, over 57% of public digital infrastructure — including cities and government services — runs on Microsoft mail servers. In Finland — 77%, Belgium — 72%, Netherlands — 60%, Norway — 64%.
Want to see what cloud services your country is using?
Explore the map: https://lnkd.in/eAdnFt74
Whether it’s a local municipality storing its citizens’ health records or a fintech startup handling millions of transactions, chances are, their data sits on servers operated by foreign entities.
Worse still, this monopoly can lead to vendor lock-in. Companies get tied into proprietary ecosystems that make switching costly and complicated. In contrast, European providers often focus on open-source compatibility and multi-cloud strategies, giving users more freedom and flexibility.
Europe needs its own cloud, not to build walls but to ensure it can compete fairly, uphold its laws, and foster a vibrant digital economy rooted in democratic principles.
The Regulatory Landscape Shaping Europe’s Cloud Strategy
Europe now operates under one of the world’s most comprehensive digital regulatory frameworks. Beyond GDPR, several major laws directly impact how organizations must evaluate cloud providers:
- NIS2 Directive – strict cybersecurity and supply-chain obligations for essential and important entities.
- Data Governance Act – rules for trusted data sharing across sectors and borders.
- Data Act – clarity on who owns and can commercialize IoT-generated data.
- Digital Services Act & Digital Markets Act – transparency, accountability, and competition rules for digital platforms.
- EU Cybersecurity Act – EU-wide certification schemes for cloud services.
- EU AI Act – governance, transparency, and risk-management requirements for AI systems.
This regulatory environment is driving organizations toward EU-native cloud providers that can guarantee compliance without the legal contradictions of foreign jurisdiction.
Key Features to Look for in a European Cloud Provider
Data Residency Within EU Borders
One of the most essential features to demand from any cloud provider in Europe is guaranteed data residency within the EU. Why? Because where data lives determines which laws apply to it. If your business stores sensitive customer information — emails, financial records, medical data — on a cloud hosted in the EU, it’s protected by the General Data Protection Regulation (GDPR) and other local laws.
Storing data in the EU ensures:
- It cannot be accessed by non-EU jurisdictions without violating EU law.
- It remains subject to EU-based audit, regulation, and enforcement.
- It aligns with emerging policies like the EU Data Governance Act and Digital Services Act.
EU-based cloud providers like OVHcloud, Scaleway, Hetzner, and Aruba Cloud maintain fully European data center infrastructure, with no dependency on U.S. control. This is particularly important for regulated industries like healthcare, banking, legal, and public services, where compliance breaches can lead to devastating penalties and reputational damage.
Data sovereignty starts with location — but it ends with legal control. Choosing a provider that guarantees both gives you peace of mind and legal clarity.
Metadata Sovereignty — The Hidden Risk Most Organizations Miss
Even when sensitive data is encrypted, cloud platforms still collect metadata:
logs, diagnostics, traffic patterns, API calls, access credentials, and telemetry.
This metadata can reveal more about your operations than you might expect — and if handled by a foreign-owned provider, it may fall under foreign jurisdiction even if stored in the EU.
A truly sovereign cloud provider keeps:
✔ data in the EU
✔ metadata in the EU
✔ support services in the EU
This closes one of the most overlooked gaps in compliance architectures.
Transparent Pricing and Vendor Lock-In Avoidance
One common complaint with U.S. hyperscalers is the complexity and unpredictability of pricing. Want to know how much it costs to move 10TB of data out of AWS? You might need a PhD in fine print. By contrast, many European cloud providers prioritize pricing transparency.
Providers like Hetzner and Scaleway offer flat-rate pricing, pay-as-you-go models, and clear invoicing structures. This allows businesses to forecast cloud costs more accurately, especially important for SMEs and startups.
Another key differentiator is freedom from vendor lock-in. Many European providers focus on open-source compatibility and open APIs, which makes it easier to move workloads between cloud platforms or even back on-premises. That’s crucial for long-term agility and cost control.
If you’re planning a cloud strategy for the next 5–10 years, flexibility should be as important as functionality.
A Roadmap to Digital Sovereignty (5-Step Framework)
For many organizations, sovereignty is not a single decision — it is a multi-phase transformation.
1. Assess & Map
Identify where your data lives today, who controls it, and which workloads require sovereignty.
2. Govern & Steer
Establish internal roles, policies, data classification, and governance structures aligned with EU directives.
3. Plan & Design
Architect multi-cloud or sovereign-cloud environments that separate critical data from non-critical workloads.
4. Transform & Implement
Migrate workloads, adopt zero-trust principles, enforce encryption, and integrate monitoring and audit tools.
5. Run & Manage
Continuously validate compliance, update classifications, manage identity, and evolve architecture as regulations change.
This structured framework helps organizations modernize cloud infrastructure without sacrificing regulatory alignment or operational agility.
Top European Cloud Providers Supporting Digital Sovereignty
OVHcloud (France)
As one of the largest EU-native cloud providers, OVHcloud has become a go-to choice for businesses seeking sovereignty. Based in France, it operates over 30 data centers worldwide with a strong emphasis on EU jurisdiction, sustainability, and open standards.
Strengths:
- Extensive product catalog (IaaS, PaaS, Kubernetes, AI)
- Certified for GDPR, ISO 27001, HDS, and more
- Active participant in Gaia-X
- Green data centers with water-cooled servers
OVHcloud offers a user experience similar to AWS but with less vendor lock-in and better EU-specific support.
Scaleway (France)
Scaleway is one of Europe’s most developer-friendly cloud providers, known for its sleek design, open-source tools, and transparent business model. It’s fully GDPR-compliant and headquartered in Paris, with data centers exclusively within the EU.
Highlights:
- Flexible virtual instances and GPU-powered machines
- Containers, serverless functions, and managed databases
- Strong edge and ARM infrastructure for innovation
Scaleway is ideal for startups, SaaS providers, and dev teams who want sovereignty and simplicity.
Hetzner (Germany)
Hetzner has built a stellar reputation for high-performance, affordable cloud and dedicated servers. With its data centers in Germany and Finland, Hetzner ensures GDPR-compliant storage and processing at a fraction of the cost of global hyperscalers.
Unique features:
- Flat-rate pricing and extremely low cost-per-GB
- Full control with root access and SSH
- Ideal for hosting, SaaS, and DevOps workflows
Case Study – Scaling a Global Environmental Platform
To support ReSource International’s global ambitions, Gart Solutions re-architected elandfill.io into a scalable SaaS platform on Hetzner Cloud. The solution replaced costly AWS plans with a Kubernetes-based setup, enabling real-time processing of geospatial and environmental data. As a result, the platform expanded from Iceland to 14 countries, cut infrastructure costs by 60%, and stayed true to its green tech values.
Hetzner helped turn a local environmental tool into a global digital platform, without the AWS price tag.
T-Systems / Open Telekom Cloud (Germany)
Backed by Deutsche Telekom, T-Systems operates the Open Telekom Cloud, one of the most secure and enterprise-ready clouds in Europe. With high availability zones in Germany and the Netherlands, it’s perfect for businesses with compliance-heavy workloads.
Best for:
- Government agencies and public services
- Large enterprises needing hybrid cloud options
- Healthcare, finance, and automotive sectors
T-Systems combines German engineering with global IT support, and it’s deeply involved in Gaia-X and sovereign cloud initiatives.
Aruba Cloud (Italy)
Aruba Cloud is one of Italy’s leading cloud providers with a robust infrastructure across Europe. Known for its simplicity and cost-effectiveness, Aruba is a great choice for small and mid-sized businesses.
Benefits:
- Data centers in Italy, France, Germany, and Czech Republic
- Compliant with EU standards
- Offers both VPS and enterprise IaaS solutions
If you’re looking for sovereign cloud hosting with strong regional presence, Aruba is a top contender.
Industry-Specific Requirements for Sovereign Cloud
Different sectors face different sovereignty obligations. Understanding these nuances helps organizations select the right provider:
Public Sector
Must ensure data remains fully under national and EU jurisdiction, with strict auditing, support transparency, and high-assurance certification.
Banking & Financial Services
Sensitive personal and transactional data require robust sovereignty, continuous monitoring, and compliance with EBA, PSD2, and NIS2 guidelines.
Utilities & Critical Infrastructure
As “essential entities,” they must meet strict incident reporting, supply-chain controls, and ensure operational continuity under EU law.
SaaS & Digital Platforms
Need sovereignty to serve regulated industries and expand globally, while preventing foreign access to customer datasets and analytics pipelines.
These requirements demonstrate why one-size-fits-all cloud strategies rarely work in Europe — sovereignty depends on sector, sensitivity, and scale.
Gaia-X and the Future of Federated Cloud Infrastructure
What Gaia-X Is and Why It Matters
Gaia-X is the EU’s most ambitious project aimed at reclaiming control over Europe’s digital future. Instead of creating another cloud provider, Gaia-X acts as a federated cloud ecosystem, connecting providers, users, and platforms under a common framework of trust, transparency, and interoperability.
It’s designed to ensure:
- Sovereign data sharing between companies and countries
- Vendor-neutral cloud architectures
- Portability and reversibility of services
- Full GDPR compliance by design
The ultimate goal of Gaia-X is to enable innovation while maintaining control over how and where data is used. It promotes open standards, multi-cloud strategies, and secure data flows across industries—from finance and energy to health and smart cities.
Gaia-X is not just a tech play. It’s a political and economic declaration that Europe will no longer rely solely on foreign tech monopolies. It’s about building a digitally autonomous future from the ground up.
Who’s Participating in Gaia-X?
Gaia-X brings together a mix of public institutions, startups, established tech companies, research centers, and policy groups. Major players include:
- OVHcloud
- T-Systems / Deutsche Telekom
- Orange Business Services
- Atos
- Siemens
- Scaleway
But it’s not just for the big guys — hundreds of SMEs and open-source projects have joined Gaia-X, contributing to use cases, governance frameworks, and technological standards.
In short, Gaia-X is building a community. By making sovereignty a shared responsibility, it encourages cooperation over competition. It’s about creating a European answer to AWS and Google Cloud without replicating their centralized models.
Gaia-X vs. Traditional Cloud Models
Here’s how Gaia-X fundamentally differs from the global cloud giants:
While Gaia-X won’t replace hyperscalers overnight, it will provide a blueprint for how Europe can innovate without compromising its values.
Sovereign AI — The Next Stage of European Autonomy
As AI adoption accelerates, sovereignty concerns extend far beyond traditional cloud services.
AI systems depend on massive datasets — customer information, behavioral patterns, industrial telemetry, and operational metadata. If this data is processed or stored by non-EU providers, it may fall under non-EU jurisdiction, even if anonymized.
The upcoming EU AI Act introduces strict governance requirements:
- transparency of datasets
- traceability and auditability
- control over model training and inference
- risk classifications for high-impact AI systems
For many organizations, this means AI workloads must run on EU-governed infrastructure with EU-controlled metadata, model weights, logging, and monitoring.
Sovereign AI is no longer optional — it will soon be an essential compliance requirement.
Challenges in Adopting EU Cloud Providers
Lack of Feature Parity with Global Giants
Despite their growth, many EU cloud providers still lack the breadth of services offered by hyperscalers. If your organization relies on cutting-edge AI/ML pipelines, advanced serverless infrastructure, or global CDN optimization, you may find some gaps.
For example:
- OVHcloud may not match AWS in managed AI services.
- Scaleway doesn’t yet offer the global distribution options of Google Cloud.
- Hetzner, while powerful, lacks native integrations for enterprise software stacks like Salesforce or Microsoft 365.
How to Choose the Right EU Cloud Provider
Assessing Security, Scalability, and Support
Choosing the right European cloud provider means balancing technical capabilities with regulatory requirements and business goals. Here’s a quick checklist to guide your decision:
- Security: Does the provider offer end-to-end encryption, ISO 27001 certification, DDoS protection, and GDPR-compliant data handling?
- Scalability: Can the infrastructure scale horizontally and vertically? Are there options for load balancing, container orchestration, or serverless deployment?
- Support: Is there 24/7 customer support in your local language? Do they offer clear Service Level Agreements (SLAs) and migration support?
- Ecosystem Fit: Does the provider support open APIs, DevOps tooling, and integration with your software stack?
- Data Jurisdiction: Are your workloads 100% located in EU jurisdictions, and not subject to non-EU laws like the CLOUD Act?
Providers like Scaleway are ideal for developers and agile startups, while T-Systems suits highly regulated enterprises. Hetzner is unbeatable for performance-per-euro, and OVHcloud delivers full-stack capabilities at scale.
Hybrid and Multi-Cloud Sovereignty Strategies
Not every workload needs to be moved off AWS or Azure today. A practical approach for many businesses is to adopt a hybrid or multi-cloud model:
- Use hyperscalers for global edge services or non-sensitive content delivery.
- Deploy critical workloads — like customer databases, compliance logs, or analytics pipelines — on sovereign EU clouds.
- Leverage Kubernetes, Terraform, and Ansible to orchestrate resources across environments with minimal lock-in.
This strategy offers the best of both worlds: access to global performance when needed, and sovereignty where it matters. Just make sure your orchestration tools support cloud-agnostic deployments.
Conclusion
Europe stands at a crossroads. It can continue to rely on foreign digital giants — or it can take control of its digital destiny. Choosing a European cloud provider is about much more than IT infrastructure.
It’s about:
- Preserving privacy
- Empowering local innovation
- Strengthening legal autonomy
- Driving economic growth
Providers like OVHcloud, Scaleway, Hetzner, T-Systems, and Aruba Cloud offer real, battle-tested alternatives that align with these goals. The emergence of Gaia-X and sovereign frameworks is accelerating this shift.
For businesses, the path is clear: audit your cloud strategy, embrace sovereignty where it counts, and invest in a future where Europe owns its cloud — and not the other way around.
Contact Us and let’s find the best cloud provider, that support your business needs and future plans.
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