Why European Organisations Need Cloud Infrastructure with Sovereignty

Guest post by Sapthagiri Chapalapalli, Head of TCS Europe

The European Environment

European organisations have a unique opportunity to lead with trusted infrastructure, rigorous compliance, and innovation that advances both growth and societal goals.

The European Union is seen as a regulatory superpower globally, often setting the standards which the world then adopts. In technology, traditionally Europe sets the bar high on risk, safety, rights and antitrust, but there is recognition that there is tension between this approach, versus the more innovation-friendly and hands-off attitude in the US.

Organisations are caught in the middle, needing to be compliant, to work globally, and ultimately ensure their entire digital ecosystem is serving their needs with minimal friction. Maintaining a competitive environment for growth is a constant tightrope to walk.

Right now, the game-changing nature of AI, a fluctuating global legislative environment, and concern over geopolitical risks, data dependencies, and concerns over supply chain vulnerabilities are driving European organisations to reevaluate their technology stacks as a business priority. A sovereign cloud approach is a strong route to advancing business goals while maintaining compliance and being in control of your data.

The sovereign cloud objective

Sovereign cloud is a strong option for European organisations because, by placing the concept of sovereignty at the core of transformation, they integrate data protection and compliance mechanisms from the start to create a framework within which they can competitively innovate, while exercising ultimate control over their data in a protected environment.

At its core, sovereign cloud is a purpose-built cloud computing environment that specifically meets certain protection, security or legal requirements, granting organisations more comprehensive control over their digital assets. Data stays within defined borders or jurisdictions, even when the organisation is working with a global cloud provider, while remaining scalable to the needs of the business.

Sovereign cloud provides strategic autonomy, including protecting intellectual property and personal data to maintain business continuity in the face of geopolitical or supply chain shocks, while preserving speed, elasticity, and interoperability.

And sovereign cloud infrastructure as a service (IaaS) is gaining popularity; spending in this area is forecast to total $80 billion (€68 billion) in 2026, a 35.6% increase from 2025, according to Gartner. As a technology service provider, we're seeing clients coming TCS with four needs in particular.

1. To reduce exposure to extraterritorial laws. With most mid and large-scale enterprises today storing data in off-premise in the cloud, organisations are often relying on international data centres. And as non-EU laws like the US Cloud Act and China's Cybersecurity Law become more numerous and powerful, organisations are increasingly looking to keep all of their data in a single controlled sovereign environment.

2. To adhere to strict EU data residency and processing requirements, and react to increasing pressure from regulations like GDPR, DORA, and other sector-specific policy. Organisations want a simple solution to stay compliant.

3. To manage data and supply chain risks in a tricky geopolitical environment by their data. This often means keeping data closer to home in Europe, but not always.

4. To competing on a global scale with new technologies like AI. Organisations want to control and protect the data environment for their AI solutions. Consequently, sovereign clouds are increasingly seen as critical for sovereign AI solutions.

Achieving cohesive design and prioritising a 'Minimum Viable Enterprise' approach

When talking with clients, we see sovereign cloud often described as a destination. In practice, it is a set of deliberate design choices working flawlessly in concert with the objective of ensuring meaningful