The Future of Data Sovereignty in Europe
Why It Matters Now More Than Ever
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Why It Matters Now More Than Ever
Subscribe for the latest news and insights on open source, Aiven offerings, and more.
In today’s interconnected world, data sovereignty has evolved from a legal concept into a strategic imperative. For some European businesses and institutions, it’s no longer just about regulatory compliance – it’s about trust, resilience, and long-term digital independence.
With strengthening concern over cross-border data movement and regulatory frameworks such as the EU Data Act and EU General Data Protection Regulation (GDPR), some European organisations are rethinking their cloud architecture and purchase strategies. There's an increased need and urgency in seeking solutions that keep data processing local, compliant with applicable laws, and under their control.
Data sovereignty is often described solely as the physical location where your data is stored. True data sovereignty is so much more - who governs it, who can access it, and which legal frameworks are applicable. Data residency in a data centre in Frankfurt or Helsinki, can still fall under foreign jurisdictions if the cloud provider is headquartered outside the EU. This critical distinction is often understated or misunderstood.
In UpCloud’s 2025 Global Web Hosting Survey, conducted in collaboration with SlashData’s Developer Nation community, a clear trend emerged: Security and Compliance are now the top priorities for web hosting providers. Of the 302 complete responses collected, 87% of respondents said these concerns are either very important or extremely important in shaping their infrastructure strategy. Notably, 46% identified compliance as the single most important factor when choosing a cloud provider, underscoring just how vital true data sovereignty has become in today’s cloud landscape.
“Data sovereignty is one of the most complex outcomes of modern information architectures built from a set of -as-a-Service (aaS) software that is often overly complex and opaque not only to the end user but also to the organisations that build the solutions themselves. Cloud providers who are willing and able to demonstrate sovereignty capabilities represent a material risk reduction for their customers.”
– Jamie Arlen, SVP Technology & CISO, Aiven
Emerging European legislation seeks to address this gap. For example, the EU Data Act promotes data portability, interoperability, and protection against third-country access to non-personal data. This new legislation builds on the GDPR to strengthen organisations’ rights over their data and reduce dependency on a narrow set of providers. By 2027, it will even ban exit fees for cloud migrations and enforce smoother transitions between cloud services. These measures help restore autonomy and give businesses more flexibility in their digital choices.
From SMEs to public sector institutions, many European organisations today want more than just scalable infrastructure, they want:
These are not simply technical requirements, they are essential for operational and strategic freedom in the cloud era. Cloud migration challenges, particularly for medium-sized businesses, often arise from lack of in-house expertise, resistance to change, or misjudging the complexity of integrating legacy systems. Clearer regulation and cloud providers with the right guidance and tools can mitigate the impact of these challenges.
“Data sovereignty isn’t just about regulation, it’s about enabling our customers to build and grow on a foundation they can trust. When data is handled in accordance with local laws, within European jurisdiction, and with full transparency, it removes uncertainty and unlocks long-term confidence.”
– Arno Schäfer, CEO, UpCloud
Regulatory compliance is sometimes perceived as a challenge, but often a misinterpretation or lack of tools to implement the requirements effectively become synonymous with the regulation itself. Many organisations struggle simply because their existing infrastructure or provider is not well equipped to support related regulatory or compliance obligations. Organisations can simplify compliance and regain confidence by choosing cloud solutions built from the ground up to support EU law.
The same solution applies to emerging regulations. The EU Data Act and frameworks like the Digital Operational Resilience Act (DORA) are not obstacles – they are opportunities for businesses to take control and future-proof their operations. Cloud providers that proactively adopt and integrate these principles turn regulation into a competitive advantage.
“Data sovereignty isn't just a buzzword —it’s a strategic asset. It allows European businesses to innovate without compromise, to remain in control of their digital assets, and to align with a future shaped by fairness, resilience, and choice. When we align the cloud infrastructure natively with EU law, we eliminate friction, reduce legal exposure, and accelerate trust across the value chain - for our customers as well as the customers of our customers. That’s a real business advantage of building on a truly European cloud.”
– Arno Schäfer, CEO, UpCloud
The definitions for various aspects of Cloud Computing include the Service Models - Software as a Service (SaaS), Platform as a Service (PaaS), and Infrastructure as a Service (IaaS). In the overwhelming majority of cases, each is built on a foundation of the one that follows - SaaS is built on PaaS, PaaS is built on IaaS. When an organisation selects a product delivered by a Cloud Service Provider (or any -aaS vendor), the selection does not end with that first commercial transaction but actually inherits the entire dependency chain of the various software tools and service providers that are orchestrated into that product. In the continuum of data sovereignty, it may be that you’ve selected a product from an EU-based provider - who themselves are dependent upon non-EU providers or products and thus you may believe that you have managed your compliance requirements or managed your risk. Understanding (and reliably proving) the complete sovereign supply chain is a key requirement which should be part of any procurement activity.
Aiven delivers a powerful combination of managed open-source data technologies coupled with multi-cloud and flexible deployment options. These factors, in addition to Aiven’s partnership with local cloud providers like UpCloud in Europe, help keep data within specific geographic borders, catering to data sovereignty requirements.
“Choosing open-source solutions, either managed or self-hosted, is not solely a choice to avoid vendor lock-in but a deliberate choice to retain sovereignty over an organisation’s data. Freedom to not only take your data with you when you migrate away from a provider but also the freedom to continue to use that data just as you did before your involvement with that provider. Open-source is simply the lowest risk option.”
– Jamie Arlen, SVP Technology & CISO, Aiven
Data sovereignty in a connected world is difficult to achieve without making deliberate choices that build a foundation of trust, resilience, and long-term control over data. The options for European organisations are changing from adhering to a checklist of regulations towards durable patterns in both supplier and supply-chain management that drive stakeholder trust and therefore success.
By prioritizing providers that offer geographical control, embrace open standards, and demonstrate a deep understanding of the evolving European regulatory landscape, organisations can move beyond naive compliance. These choices enable the ability to confidently innovate, expand, and compete on a global scale secure in the knowledge that data remains sovereign, accessible, and aligned with European values. The future of Europe's digital economy depends on these strategic decisions, transforming data sovereignty from a challenge into a powerful competitive advantage.
More information about UpCloud.