European service providers are forging alliances with US hyperscalers to offer sovereign cloud services that comply with EU security and data ownership regulations, according to analyst research.
The 2023 ISG Provider Lens Multi Public Cloud Services report for the EU, finds a growing number of partnerships between local providers and global hyperscalers aimed at preserving data sovereignty, while meeting the technological demands of customers.
Although European cloud service providers may not be able to compete with hyperscalers when it comes to their data centre ecosystem and technological capabilities, they make up for it with an established local presence, ISG says.
The report names AWS, Google, Microsoft, Orange Business, OVHCloud and T-Systems as leaders in the sovereign cloud market.
“Localised data residency is a key priority for sovereign cloud service providers,” said Matthias Paletta, director, technology modernisation, for ISG. “Providers with extensive regional coverage have a competitive edge.”
The merging of local and global in the European cloud market is due “in great part” to the Gaia-X initiative, a comprehensive framework designed to govern the data sovereignty of information deemed confidential by EU member states, ISG says.
Since its launch in 2019, Gaia-X has grown from 22 European stakeholders to more than 340 organisations as of 2023. Stringent security and encryption are integral to the Gaia-X framework.
Gaia-X’s goal of European ownership control of providers of sovereign cloud services has “created obstacles” for EU organisations though, both in governmental and commercial markets - in terms of maintaining a continuous service flow from their chosen providers, adds ISG.
That’s because these organisations still depend on the scalability and comprehensive technology stack that the global hyperscalers offer.
Cloud service providers are surmounting this obstacle by developing a highly scalable cloud ecosystem leveraging an open-source platform that ensures interoperability, while maintaining a strong emphasis on European standards.
