Could the AWS European Sovereign Cloud be a gamechanger?

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• More organizations around the world are opting for the sovereign cloud to meet regulatory requirements. 
• The AWS European Sovereign Cloud will launch with its first AWS Region in Germany.
• Only EU-resident AWS employees who are located in the EU will have control of the operations and support for the AWS European Sovereign Cloud.

The sovereign cloud is designed to address concerns related to data security, privacy, and compliance with national regulations. Government agencies, critical infrastructure providers, and other organizations that handle sensitive or classified information often prefer sovereign clouds. This ensures that their data remains within the borders of their country and under the jurisdiction of their government.

By using a sovereign cloud, organizations can have more control over their data and reduce the risk of unauthorized access or data breaches by foreign entities. It also allows governments to implement specific security measures tailored to their national needs and regulations. This provides a higher level of assurance regarding the confidentiality and integrity of the data stored in the cloud.

Over the years, cloud service providers have continued to highlight the security features of the public cloud. Yet, with regulations requesting industries to be more vigilant in their cloud usage, more organizations, especially those in regulated industries, are opting for the sovereign cloud.

Sovereign clouds primarily focus on data sovereignty. Data sovereignty refers to the concept that data is subject to the laws and regulations of the country in which it’s located. This implies that data collected, processed, and stored within a specific country’s borders is governed by the laws of that country.

The rise of sovereign cloud providers

Companies and organizations often need to navigate complex legal frameworks and work with cloud service providers that offer options for data centers located within specific countries or regions to ensure compliance with data sovereignty requirements.

In a survey conducted by IDC, 63% of respondents emphasized the critical importance of a cloud solution offering full jurisdictional control over data. This underscores the pressing business requirement for establishing cloud infrastructure that ensures transparency, visibility, and strict control over data residency.

In the evolving cloud environment, organizations require assistance in navigating the intricacies of multi-cloud adoption. As digital transformation deepens the reliance on data, countries across Asia must bolster their efforts to develop robust data governance strategies and enact legislation focused on privacy, protection, and security.

As such, sovereign cloud adoption in Asia has grown at a much faster rate compared to other parts of the world. What makes the sovereign cloud adoption in the region more interesting is the number of ecosystems that are emerging to support the demand.

For example, VMware has accumulated an ecosystem of 22 Sovereign Cloud partners in the Asia Pacific. Apart from working with cloud partners, some cloud companies are collaborating with governments to build sovereign clouds.

In Singapore, the first sovereign cloud will be built by Microsoft and HTX, (Home Team Science and Technology Agency). The sovereign cloud will accelerate digital transformation and innovation for HTX as well as address emerging technology needs across Singapore’s Home Team Departments.

In Europe, Oracle’s EU Sovereign cloud enables commercial and public sector organizations to store sensitive data and applications in alignment with EU data privacy and sovereignty requirements.

Cloud spending in Europe

According to the Worldwide Software and Public Cloud Services Spending Guide published by International Data Corporation (IDC), public cloud services spending in Europe will total US$142 billion in 2023 and will reach US$291 billion by 2027, recording a five-year (2022-2027) compound annual growth rate (CAGR) of 20%. Software-as-a-service (SaaS) will continue to drive most of the spending, while platform-as-a-service (PaaS) will remain the fastest-growing area.

26% of the overall market value will most likely be dominated by banking, retail, and telecommunications, which are also the top spending industries in the public cloud for 2023. IDC expects public cloud investments in the telecommunications sector to grow strongly in 2024, placing it among the highest-spending industries, along with life sciences, utilities, and healthcare players.

However, a report by Accenture indicates that the size of the European sovereign cloud market is still relatively small, especially when compared with the total cloud market in the EU. But it has the potential for rapid expansion, especially given the increased regulatory emphasis on data sovereignty and the growing volumes of enterprise data being generated, stored, and processed in ever more locations, from public cloud to edge networks and IoT devices, to metaverse and generative AI.

For example, in France, Thales is developing a sovereign cloud with Google. The jointly developed sovereign cloud offering will meet the French “Trusted Cloud” requirements and enable French organizations to innovate and fully benefit from hyperscale cloud technology, while keeping their data confidential, secure, and fully sovereign.

Over in Germany, Google Cloud and T-Systems are partnering to provide a scalable sovereign cloud to healthcare and public sector organizations. The solution increases openness and transparency for cloud customers, while access to data and facilities (such as routine maintenance and upgrades) remains under the supervision of the vendors.

The AWS European Sovereign Cloud

Given the growing interest in the sovereign cloud in Europe, AWS has launched the European Sovereign Cloud. The independent cloud for Europe is designed to meet the regulatory needs of those in the public sector and highly regulated industries.

Located and operated within Europe, the AWS European Sovereign Cloud will be physically and logically separate from existing AWS Regions. It will offer the same security, availability, and performance of existing AWS Regions, giving customers additional choices to meet their data residency, operational autonomy, and resiliency needs.

According to AWS, the AWS European Sovereign Cloud will launch with its first AWS Region in Germany and will be available to all European customers. The company also stated that only EU-resident AWS employees who are located in the EU will have control of the operations and support for the AWS European Sovereign Cloud.

“The AWS European Sovereign Cloud reinforces our commitment to offering AWS customers the most advanced set of sovereignty controls, privacy safeguards, and security features available in the cloud,” said Max Peterson, vice president of Sovereign Cloud at AWS.

“For more than a decade, we’ve worked with governments and regulatory bodies across Europe to understand and meet evolving needs in cybersecurity, data privacy and localization, and more recently, digital sovereignty. With this new offering, customers and Partners across Europe will have more choices to achieve the operational independence they require, without compromising on the broadest and deepest cloud services that millions of customers already know and use today.”

AWS currently offers the largest and most comprehensive cloud infrastructure globally, with 102 Availability Zones across 32 geographic regions, and has plans to launch 15 more Availability Zones and five more AWS Regions in Canada, Germany, Malaysia, New Zealand, and Thailand. In Europe, AWS infrastructure currently includes eight AWS Regions in Frankfurt, Ireland, London, Milan, Paris, Stockholm, Spain, and Zurich, and more than 120 Content Distribution Network (CDN) points of presence in more than 25 cities across 19 European Member States.

AWS Sovereign cloud a late entry into Europe?

Interestingly, AWS’s plans for its sovereign cloud in Europe can be considered a late entry, given the company’s experience in the cloud industry. After all, AWS is the world’s largest public cloud service provider, and their services have been around for more than a decade.

This would have given the company ample time to take the lead in the industry and offer businesses and governments sovereign cloud capabilities. However, with the focus more on the public cloud, other vendors were able to make the first move in the industry. Currently, VMware and Oracle seem to be leading the sovereign cloud market in Europe, especially with the investments and developments they have poured into the development of the sovereign cloud market.

However, this does not mean that AWS would have lost opportunities in the industry. Instead, the timing of AWS’s Sovereign Cloud release is perfect, given the greater need for private and secured infrastructure in the EU, especially with increasing regulations toward the use of data and AI.

As companies look to leverage more AI use cases, AWS’s offerings on both the public and sovereign cloud could prove to be game-changers for businesses in their cloud journey. AWS has also mentioned that potential customers who need more options to address stringent isolation and in-country data residency needs will be able to leverage existing offerings like AWS Outposts or AWS Dedicated Local Zones to deploy AWS European Sovereign Cloud infrastructure in locations they select.

AWS European Sovereign Cloud customers will also benefit from the same low latency and high availability they expect from existing AWS Regions, and from access to the world’s most comprehensive and broadly adopted cloud to drive innovation.

With that said, the sovereign cloud industry in Europe could be seeing more changes now that AWS is a part of it as well. Increasing tech adoption and regulations will only see the need for more secure and private cloud services in the future.

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