Early indicators suggest that MSPs guiding customers toward sovereign cloud solutions could be heading into a period of strong growth.
Worldwide spending on sovereign cloud infrastructure‑as‑a‑service is expected to reach roughly $80 billion in 2026. This represents over 35 percent year‑over‑year growth, according to Gartner.
European organizations, in particular, are expected to nearly double their sovereign cloud IaaS spending between 2025 and 2026—from about $7 billion to more than $12 billion. Gartner projects that investment will nearly double again in 2027.
Ongoing geopolitical tensions, including disputes over tariffs and Greenland, have pushed many organizations to reconsider their reliance on U.S.-headquartered technology providers that may fall under the Clarifying Lawful Overseas Use of Data (CLOUD) Act. The act means that any organization using infrastructure from a U.S. company could have its IT platforms seized or accessed by U.S. authorities.
Regional initiatives and vendor responses
This concern has fueled the rise of several sovereign cloud initiatives. The Eurostack project, for example, is built entirely on technologies not subject to U.S. regulations. Large cloud providers have also introduced offerings designed to meet regional compliance needs. This includes Amazon Web Services (AWS) and Google services that operate fully within European Union (EU) borders.
IBM is also leveraging the Red Hat OpenShift platform, built on Kubernetes clusters, to deliver its IBM Sovereign Core. This can deploy in any data center the customer chooses.
Additionally, Delos Cloud, an SAP unit, is licensed to provide Microsoft‑based IT services if availability is disrupted. Because Delos Cloud is based in Germany, the assumption is that it would not fall under U.S. regulations for the Microsoft‑based services it delivers from SAP‑managed data centers in Europe.
While these developments benefit MSPs across Europe, interest in sovereign clouds is also growing in Japan and South America. It remains unclear whether every application will eventually need to operate in a country‑ or region‑specific data center, but the implications are significant.
Beyond the data management challenges, the cost of building and operating regionalized data centers is substantial.
A long-term opportunity for MSPs
MSPs with expertise to configure, maintain, and secure sovereign cloud environments will be in high demand for years to come. Even if some political tensions ease, there is a broader erosion of trust among global partners and competitors alike. This makes it unlikely that organizations will return to the idea of truly “borderless cloud computing.”
How fragmented cloud computing ultimately becomes remains to be seen. What is clear, is that decisions about where applications run and where data is kept are no longer driven solely by traditional technology and cost considerations. Regulatory, geopolitical, and sovereignty concerns are now shaping the cloud strategies of organizations worldwide.
Photo: Andrii Yalanskyi / Shutterstock
