Gartner: European IT leaders to boost spending on local clouds amid geopolitical worries

Western European organizations are ramping up investments in local and regional cloud providers because growing geopolitical tensions are raising concerns that access to global cloud services could be disrupted for political reasons.

A survey of 214 CIOs and IT leaders in Western Europe, conducted by Gartner between May and June, found that more than 61% plan to increase their reliance on local and regional cloud providers due to geopolitics. More than half (53%) plan to restrict future use of global cloud providers for the same reason — and 44% reported they’re already limiting use.

“It shows that geopolitics absolutely have an impact on the decision making of organizations when it comes to cloud,” said Rene Buest, senior director analyst at Gartner. 

There are several reasons for an increased focus on digital sovereignty, according to Buest. 

One is a fear the US government could block access to cloud services. For instance, the International Criminal Court’s (ICC) chief prosecutor, Karim Khan, reportedly lost access to Microsoft services earlier this year, several months after US President Donald Trump placed sanctions on the organization. Microsoft has since denied it suspended services for the ICC. 

Other cases, such as Adobe cutting off Venezuelan customers in compliance with US  sanctions against that country, reinforced concerns about who has access to their data.

“Digital sovereignty has a lot to do with control — who has control over the technology or over the cloud I’m on,” said Buest. “And if I’m not able to control it, there’s the likelihood that I won’t be operational at some point anymore.”

There’s also uncertainty around trade negotiations, with many worried that tariffs could be placed on US cloud services.  

Amid geopolitical uncertainty, many European organizations are turning to alternatives to established cloud providers, and 55% plan to expand their use of open-source software, according to the Gartner survey.

Several public sector organizations in the region are moving to open source digital workplace apps. The German federal state of Schleswig-Holstein is replacing Microsoft software with LibreOffice, Nextcloud, and Open-X-Change, while the city of Lyon in France, will replace Windows and Office with open-source alternatives. And the Austrian Armed Forces will reportedly deploy LibreOffice to 16,000 workstations.

Digital sovereignty is expected to grow as a priority globally, according to Gartner. By 2030, the analyst firm forecasts that more than 75% of all enterprises outside the US will have a digital sovereignty strategy that involves local or regional cloud usage. 

Heightened interest in digital sovereignty will result in increased spending on local clouds and open-source applications, but the likes of Amazon, Google, and Microsoft are unlikely to be too troubled. These hyperscalers account for 70% of the IaaS, PaaS, and hosted private cloud market in Europe, according to a report by Synergry Research Group from July. US tech giants also lead in SaaS, with Microsoft 365 and Google Workspace widely used by private and public sector organizations.

Buest expects some cloud spending to shift to European providers in the coming years, boosting revenues for local suppliers. But a mass exodus of customers from global cloud providers is unlikely. 

“We won’t see a big shift, or that the hyperscalers lose an immense amount of market share,” said Buest. “It’s still a drop in the ocean.”

For CIOs and other IT leaders, his advice is to select which workloads are appropriate for a sovereign cloud and when to rely on hyperscalers — a room booking application would contain less sensitve corporate information, for instance. They should assess the current level of sovereignty and control over their data and understand the likelihood of various risk scenarios. 

“So basically, [it’s] good old risk management,” said Buest.