Reducing cloud dependency: evaluating local providers in Europe

Europe’s cloud market is dominated by foreign providers. Here’s why that’s a risk, and how going local can strengthen your business.

Dependence on a small number of cloud providers can limit your choices over data, infrastructure, and service continuity. Local providers can be worth evaluating, but location alone does not establish security, compliance, or independence. Check the service, contract, access model, and exit route for each workload.

The EU’s General Data Protection Regulation (GDPR) sets rules for processing personal data. Cloud procurement also needs to account for applicable sector rules, security requirements, and international data transfers. A provider’s location is one part of that assessment.

Momentum for digital sovereignty is building as organizations recognize the importance of controlling their digital assets. The growing demand for digital infrastructure and secure cloud solutions is driving both public and private sector strategies.

What is digital sovereignty?

Digital sovereignty is rapidly becoming a cornerstone of modern information technology policy, especially within the European Union. At its core, digital sovereignty is about empowering countries and organizations to control their own digital infrastructure, data, and innovation pathways. This means having the ability to decide where and how data is stored, processed, and protected, as well as fostering the development of local cloud services and solutions that align with national interests.

For a breakdown of data, infrastructure, and operational control, see our guide to digital sovereignty in cloud computing.

The push for digital sovereignty has gained momentum as governments and businesses recognize the risks of relying on foreign cloud providers for critical infrastructure and services. The European Union has taken a proactive stance, introducing regulations like the General Data Protection Regulation (GDPR) and launching the European Cloud Computing Strategy as part of its policy approach to data protection and cloud adoption. A policy initiative or regional provider label does not establish compliance for an individual deployment.

Sovereignty requirements depend on the workload. The Swiss Government Cloud illustrates a public-sector program under development, not a commercial service available to businesses or a guarantee that all cloud processing stays local.

What cloud dependency means for European businesses

European cloud services are concentrated among a few large providers. In its July 2025 research, Synergy Research Group identified Amazon, Microsoft, and Google as the leading providers in Europe’s cloud infrastructure services market, measured by revenue across IaaS, PaaS, and hosted private cloud services. This is evidence of concentration, not a measure of who owns Europe’s physical infrastructure.

These companies offer scale and convenience, but their dominance leaves European businesses exposed to external laws, shifting pricing models, and geopolitical risks. The dependency is deep, and for many organisations, invisible—until a policy change, a compliance issue, or a service outage brings it to the surface. Cloud services replace hardware like on-prem servers with a global network of secure servers accessed over the internet, allowing businesses to store data securely in the cloud, offering flexibility and scalability but also introducing new layers of dependency and risk.

Why reliance on US providers is risky

Compliance and legal uncertainty

Under the US CLOUD Act, covered providers subject to US jurisdiction may have to disclose responsive data in their possession or control under valid legal process, even if stored abroad. Nationality alone is not the test. Assess potential conflicts and GDPR duties for the specific deployment.

Vendor lock-in

Many US cloud platforms are designed to keep customers within their ecosystems. Once your infrastructure, data, and workflows are tied to proprietary tools, the cost—financial and operational—of moving elsewhere can be steep.

Security and geopolitical concerns

Europe’s political interests don’t always align with those of the US. In times of geopolitical tension, this dependency could have consequences, from disrupted services to increased compliance burdens. For critical sectors like healthcare, finance, or government, these risks are more than theoretical. Different approaches to digital sovereignty have deepened geopolitical competition, further emphasizing the need for Europe to reduce its reliance on foreign cloud providers.

Cloud Computing Options: Public vs Private Cloud

When considering cloud computing, organizations are often faced with the choice between public and private cloud environments. Public clouds, offered by major providers like AWS and Microsoft Azure, deliver scalable cloud services in a shared infrastructure model, making them cost-effective and easy to deploy. However, because resources are shared among multiple customers, public clouds may present challenges for organizations with strict data protection or compliance requirements.

Private clouds, in contrast, provide dedicated infrastructure—either on-premises or hosted by a third party—allowing greater customization and control over configuration. Security still depends on how the environment is designed and operated. This makes private clouds particularly attractive for businesses and governments that prioritize data protection and need to comply with stringent regulations. The trade-off is typically higher costs and increased management complexity.

Hybrid cloud solutions have emerged as a strategic middle ground, allowing organizations to combine the scalability and flexibility of public cloud services with the control and security of private clouds. This approach enables sensitive data and critical workloads to remain in a secure, private environment, while less sensitive operations can leverage the cost and performance benefits of the public cloud. Any claimed sovereignty benefit still needs to be tested against the deployment’s legal, access, and operational requirements.

Ultimately, the choice between public, private, or hybrid cloud models should be guided by an organization’s specific data protection requirements, compliance obligations, and need for control. Evaluate each option against those requirements; working with a local provider does not by itself establish security or compliance.

European cloud initiatives

Europe isn’t standing still. Across the continent, governments and private companies are building local alternatives aimed at strengthening digital sovereignty, which refers to the ability to have control over your own digital destiny, including control over the data, hardware, and software relied on and created by a nation. Digital sovereignty is a concern for many policymakers due to control being ceded to too few entities. Countries generally agree on the need to foster homegrown tech industries, recognizing the strategic importance of reducing reliance on foreign providers. Investments in innovation are critical for strengthening digital resilience in a hybrid multi-cloud context, ensuring that local solutions remain competitive and adaptable to evolving technological demands.

• Switzerland’s Government Cloud: A federal program being built over 2025–2032, combining public cloud, public cloud services with Swiss data processing, and federal private-cloud infrastructure. The official program description says it will not serve the private sector.
• GAIA-X: A European initiative to create a federated cloud ecosystem based on transparency, interoperability, and trust.
• Hivenet, OVHcloud, Scaleway, and others: Providers to assess individually for service coverage, deployment regions, contracts, and access controls. For Hivenet, consult the product-specific infrastructure and control information; do not assume every product uses the same storage or regional model.

These efforts reflect recent developments in cloud computing and digital sovereignty across Europe, including Switzerland.

These initiatives aren’t just political statements—they’re building infrastructure tailored to regional needs, regulatory realities, and security expectations. Compliance with regulations across EU countries is a key driver for these initiatives.

Case Study: The Swiss Government Cloud Model

The Swiss Government Cloud is a hybrid multi-cloud program for federal authorities. Its planned tiers combine external public services with infrastructure operated in federal data centers.

Its multi-cloud design aims to reduce reliance on a single provider. That aim should not be presented as proof of seamless integration, guaranteed continuity, or a completed deployment.

The program distinguishes workloads by their requirements. Federal private-cloud infrastructure and public-cloud services have different roles; the architecture does not imply that every workload uses the same location or controls.

The official timetable places implementation in 2025–2032, with initial production functionality planned for 2027. Availability and suitability should be checked against the program’s current milestones.

Competitive advantages of local cloud services

Stronger data protection

A local address does not establish GDPR compliance. Ask who processes the data, which subprocessors are involved, what the contract covers, and how security and access controls are implemented.

Proximity and support

Physical closeness often means lower latency and faster response times. Local support teams understand the regulatory and business environment you work in, making troubleshooting and compliance discussions simpler. Additionally, local cloud solutions can improve latency and performance by processing data closer to the source. Nearby hosting does not necessarily put infrastructure under the customer’s physical control. Confirm the customization and security controls available for the chosen service. Carbon outcomes require a workload-specific comparison of energy use, utilization, electricity mix, and the system being replaced; a universal 20% reduction should not be assumed. Cybersecurity measures must adapt to the challenges posed by hybrid multi-cloud environments, ensuring that data remains secure across diverse systems. Training and governance are essential for secure and effective use of hybrid multi-cloud environments, helping organizations navigate the complexities of managing multiple platforms.

Economic and strategic value

Choosing local can boost regional economies, create jobs, and reduce Europe’s reliance on foreign infrastructure. For some businesses, this alignment with local policy is also a reputational advantage. Compare actual storage, transfer, support, and migration charges before assuming that a local service will cost less.

Cost-benefit analysis of moving local

Switching providers requires migration planning, possible retraining, and application testing. Integration effort and timelines depend on workload size, data transfer, dependencies, and operational constraints. Validate data integrity and plan rollback or parallel operations where needed. The cost of cloud services should be assessed with a workload-specific budget, including migration and ongoing operations. There is no universal two-month minimum or standard monthly price range.

• Reduced compliance risk is a possible outcome when the selected service and controls address the workload’s actual legal requirements.
• Lower exit barriers depend on usable export formats, application portability, contract terms, and a tested migration route.
• Customer trust is better supported by clear evidence about data location, access, and applicable obligations. Check the selected provider’s current service catalog; managed databases, Kubernetes, and AI tools are not universal features of local clouds.

For many businesses, the upfront investment can pay off in resilience, flexibility, and reputation.

Future Outlook and Governance

Looking ahead, the drive for digital sovereignty is set to shape the future of cloud computing and the broader digital economy. As more countries and organizations recognize the strategic importance of controlling their digital assets, we can expect continued investment in local cloud services, robust data protection frameworks, and innovative technological ecosystems.

For the practical business implications of that policy shift, see our guide to European tech sovereignty for businesses.

However, achieving true digital sovereignty comes with significant challenges. Ensuring data security, maintaining compliance with evolving regulations, and fostering transparency in cloud services will require ongoing collaboration between governments, the private sector, and technology providers. The European Union is leading the way with initiatives like the GDPR and the European Cloud Computing Strategy, but a holistic approach is needed—one that integrates technology, policy, and education.

Governance will play a critical role in this process. Developing clear standards, conformity assessments, and accountability mechanisms will help build trust in cloud solutions and support the responsible use of emerging technologies such as artificial intelligence. The World Economic Forum has highlighted the need for a human rights-oriented approach to digital governance, emphasizing the importance of protecting individual rights while enabling innovation.

To secure a resilient digital destiny, countries must invest in digital literacy, support the development of open source software, and encourage the adoption of renewable energy in cloud infrastructure. By working together, governments, businesses, and individuals can create a digital future that is secure, compliant, and innovative—ensuring that control over data and technology remains in local hands and benefits society as a whole.

Action plan for moving local

1. Assess your current cloud footprint: Know where your data is stored, which laws apply, and what your critical dependencies are.
2. Identify priority workloads: Start with services that hold sensitive or regulated data.
3. Evaluate providers: Look beyond price. Consider certifications, compliance record, interoperability, and customer support.
4. Pilot and phase migration: Test with non-critical workloads before moving core systems.
5. Monitor and adapt: Review performance, security, and compliance regularly. It's recommended to conduct a Cloud Readiness Assessment before moving to the cloud to determine if systems can transition with minimal disruption.

Final Thoughts

Cloud concentration can create dependencies worth reviewing. Moving a suitable workload to local cloud solutions may broaden your options, but the benefit depends on the provider, architecture, contract, and migration plan. Evaluate legal exposure, portability, security, and continuity before committing. Local ownership alone does not resolve those questions.

For many organisations, the question isn’t whether to diversify—it’s how soon they can start. A transatlantic approach to digital regulation and cooperation between the EU and US will be crucial for fostering innovation, aligning standards, and ensuring secure, resilient digital ecosystems.

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