"Microsoft is again banging the data sovereignty drum in Europe, months after admitting in a French court it couldn't guarantee that data will not be transmitted to the US government when legally required to do so. Under the CLOUD Act, US authorities can compel access to information held by American cloud providers irrespective of where in the world that data is housed. Although Microsoft says it has published transparency reports and no European customers, private or public, were yet the subject of any requests, the threat of the law remains and this is making some nervous."
"Against this backdrop, Microsoft this week talked up new features. The latest play is unsurprisingly heavy on AI - end-to-end AI data processing can happen in Europe as part of the EU Data Boundary, and in-country processing for Microsoft 365 Copilot interactions is set for 15 countries, although only four - the UK, Australia, India, and Japan - will have the option by the end of 2025."
"In addition, Microsoft is increasing the scale of Azure Local (formerly Azure Stack HCI) from 16 physical servers to "hundreds" and adding Storage Area Network (SAN) support. The latter means that organizations can use existing on-premises storage. This also acknowledges that 16 physical servers are insufficient to meet the growing needs of a sovereign private cloud."
CLOUD Act provisions allow US authorities to compel access to data held by American cloud providers regardless of physical location. Microsoft acknowledged it could not guarantee that data would never be transmitted to the US government when legally required, creating unease among European customers. Microsoft is responding by strengthening data sovereignty measures, enabling end-to-end AI data processing within Europe via the EU Data Boundary and scheduling in-country Microsoft 365 Copilot processing for 15 countries (four available by end-2025, others in 2026). Microsoft is also scaling Azure Local to hundreds of servers, adding SAN support, and delivering Microsoft 365 Local for on-premises server integration.
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