Unit8 Technology Radar: How to Approach Sovereign Infrastructure & Solutions?

The term sovereign infrastructure refers to the digital and physical assets—such as data centers, networks, AI models, and cloud platforms—that are under the control and jurisdiction of a specific country or economic bloc, like the European Union. Sovereign infrastructure has evolved from a legal concern about data location to a strategic decision encompassing resilience, control, and adaptability. It now involves determining who can access your systems, which legal frameworks apply during crises, the ease of switching providers, and potential pricing changes due to political factors.
This shift is driven by three main forces: stricter European regulations requiring stronger supplier control and exit strategies, credible sovereign-by-design offerings from global and European vendors, and a volatile trade environment affecting costs and access more rapidly than traditional budget cycles. Recent examples include U.S. tariffs and export controls that affect key technology components and cloud infrastructure, where the majority of global cloud providers are headquartered. Regulatory pressure is strongest in certain sectors (e.g., finance, critical infrastructure) while commercial customers may be driven more by reputational or contractual reasons.

Recent regulatory developments underscore the growing need for robust sovereign cloud strategies. The Digital Operational Resilience Act (DORA) mandates resilience measures for the financial sector, ensuring systems can withstand operational disruptions. The Network and Information Security Directive 2 (NIS2) enhances cybersecurity standards across countries. The European Union Data Act, effective as of 12 September 2025, grants users clear rights to transfer their data and switch providers, making flexibility and control a key part of cloud planning and making these capabilities essential.

The critical question is not just whether to adopt a sovereign cloud, but also where to strategically place sovereign resources, how to ensure robust data portability and provider switching capabilities, and how to effectively leverage intelligence providers and AI orchestration tools. This proactive approach will enable businesses to navigate regulatory requirements and maintain operational resilience in an increasingly unpredictable geopolitical landscape.

Your options, at a glance

Given the rapidly changing landscape of data sovereignty and regulatory compliance, organizations have several options for designing and implementing a sovereign cloud strategy:

• Mainstream Public Cloud with Enhanced Controls: This option involves staying on mainstream public cloud platforms while implementing stronger controls to ensure compliance and security. Utilize European regions and boundary features to keep data within EU jurisdiction. Manage your own encryption keys to maintain control over data access, and use customer-managed certificates to strengthen trust and authentication. Implement robust Identity and Access Management (IAM) policies to ensure that only authorized users and administrators can access systems and data. Limit administrative and support access to European personnel where possible, ensuring compliance with local regulations. Define and enforce log retention and monitoring policies aligned with regulatory requirements, using regional storage to maintain audit trails within EU borders.Design an exit strategy that can be rehearsed, providing a clear path for transitioning away from the provider if necessary. This approach allows access to a wide range of services while enhancing control over data and operations.
• European-Sovereign Variants of Global Clouds: Opt for European-sovereign versions of global cloud services when you require European-operated administration and separated metadata but still want to leverage the global ecosystem. This involves planning for separate tenancy, which means maintaining distinct operational environments within the cloud provider’s infrastructure. Be prepared for potential timing differences in the availability of new features, as these variants may have different release schedules compared to their global counterparts. The operational cost may also be significantly higher, as cloud providers typically charge a premium for enhanced sovereignty.
• Crown-Jewel Workloads with European Providers: For critical workloads, consider hosting them with European-operated providers or trusted national ventures. This approach enhances protection under European law and can satisfy country-specific certifications, offering strong legal safeguards. However, it may involve trade-offs such as increased operational complexity, regional processes, less mature tools, additional management efforts, limited specialized services, and slower innovation. Examples include European providers like OVHcloud and joint ventures such as Thales with Google Cloud or Orange and Capgemini with Microsoft technology in France. When choosing these providers, assess factors like legal control, operating model, and future roadmap to ensure alignment with your strategic goals.

By carefully assessing these options, businesses can achieve a balance between compliance, control, operational efficiency, and access to innovative services, while managing costs effectively, ensuring resilience and adaptability in a rapidly changing regulatory and technological landscape.

In this context, the choice of intelligence providers and AI orchestration tools becomes crucial. Taking into account regulatory requirements (e.g., extraterritorial access requests, obligations under U.S. law such as the CLOUD Act), Leaders must consider options like US-based OpenAI, US-hosted services in the EU, open-source solutions, and EU-based providers like Mistral. Each offers different advantages in terms of compliance, sovereignty, and innovation. US providers may offer cutting-edge technology, but raise concerns about data sovereignty and compliance with EU regulations. Open-source solutions offer flexibility and control, but they require significant internal expertise. EU-based providers like Mistral offer compliance with local regulations and data sovereignty, aligning with European values.

AI orchestration tools play a vital role in managing these diverse AI resources, ensuring seamless integration and operational efficiency. They help businesses navigate the complexities of deploying AI across different platforms and jurisdictions, maintaining compliance while optimizing performance.

Do you need sovereign infrastructure?

Determining whether a sovereign cloud stack is necessary for your organization involves assessing several key factors related to regulatory compliance, customer demands, risk management, and strategic objectives. Consider adopting a sovereign cloud approach if any of the following apply:

• Regulatory Compliance Requirements: If your organization falls under the Digital Operational Resilience Act (DORA) or the Network and Information Security Directive 2 (NIS2), you must demonstrate supplier control, incident readiness, and conduct exit tests. These regulations mandate robust governance and resilience measures, making a sovereign cloud strategy essential for compliance.
• Customer Demands for Data Sovereignty: If your key customers require European-only storage and administration, a sovereign cloud solution can meet these demands by ensuring data remains within EU jurisdiction and is managed by European personnel. This approach can enhance customer trust and satisfaction by aligning with their data sovereignty expectations.
• Risk Management and Legal Exposure: If your organization’s risk appetite cannot tolerate exposure to non-European legal reach for sensitive data, a sovereign cloud strategy can provide the necessary insulation. By choosing European-operated providers, you can minimize legal risks and ensure compliance with local regulations.
• Enforceable Data Portability: As the European Union Data Act comes into effect, the importance of enforceable data portability grows. If your organization values the ability to switch providers effortlessly and maintain control over data movement, adopting a sovereign cloud approach can support these capabilities, ensuring flexibility and adaptability in a changing regulatory landscape. However, achieving genuine portability involves more than just legal rights; it necessitates meticulous technical design, including well-organized metadata and catalogs, consistent identity mapping, and thorough testing.

By evaluating these factors, business leaders can make informed decisions about implementing a sovereign cloud strategy that aligns with their compliance requirements, customer expectations, risk management needs, and strategic goals.

Strategic Steps for Implementing a Sovereign Cloud Strategy

1. Segment and Assign Workloads

Begin by categorizing your workloads based on sensitivity and regulatory obligations. Identify which workloads must be operated within Europe, which must reside in European data centers, and which can remain on general public cloud platforms. Assign a dedicated business owner to each category and establish clear, measurable exit objectives to ensure accountability and readiness for transitions.

2. Design Two Operational Zones

Create two distinct operational zones to manage your data effectively:

• Zone A: European-Operated Landing Zone
  This zone is designated for the most sensitive data, ensuring it is managed entirely within European jurisdiction. Implement strict controls and compliance measures to protect this data.
• Zone B: Hyperscaler Landing Zone
  Utilize a hyperscaler platform with boundary features, customer-held encryption keys, and European-only administration. This zone should include restore drills to a secondary provider to ensure resilience and continuity.

3. Pilot, Prove, and Contract

Conduct pilot tests for one workload in each zone to evaluate performance metrics such as cost, latency, and administrative access. Secure portability rights, establish clear pricing-adjustment clauses, and define named support obligations in your contracts. Maintain a warm relationship with an alternative provider to ensure flexibility and backup options.

Key Considerations for 2026

1. Regulatory Developments
Stay informed about the national implementation of the Network and Information Security Directive 2 (NIS2) and supervisory expectations under the Digital Operational Resilience Act (DORA). These regulations will shape compliance requirements and operational standards, impacting how organizations manage data and security.
2. Vendor Capabilities
Monitor the expansion of European sovereign features offered by cloud vendors. Look for clearer guarantees regarding governance, personnel management, and metadata location, require named commitments in the contract and testing – don’t fall for providers’ marketing. These enhancements will be crucial for ensuring compliance with European regulations and maintaining data sovereignty.
3. Data Transfer Policies
Keep an eye on the status of the European Union’s Data Privacy Framework and any residual exposure to non-European legal requests. Understanding these dynamics will help organizations navigate international data transfer challenges and protect sensitive information.
4. Geopolitical and Pricing Dynamics
Consider the impact of geopolitical factors, such as tariffs and shifts in supply chains, which may lead to increased hardware costs and affect cloud pricing. To address these risks, establish a secondary landing zone to ensure operational continuity and manage costs effectively. If a complete secondary landing zone exceeds your budget, explore alternative strategies like partial replication, warm standby environments, or cross-region failover configurations. These options offer resilience while minimizing costs and operational demands.

By actively monitoring these areas, organizations can adapt to regulatory changes, leverage vendor advancements, manage data transfer risks, and respond to geopolitical influences, ensuring a resilient and compliant cloud strategy through 2026.