"European organizations will nearly double their spending on sovereign cloud infrastructure as a service (IaaS) this year, as geopolitical tensions cause them to rethink their reliance on US hyperscalers. European investments in sovereign IaaS are expected to grow from $6.9 billion in 2025 to $12.6 billion in 2026, according to a forecast by Gartner published Monday - an increase of 83%. The figure will almost double again in 2027, Gartner predicts, reaching $23.1billion, as geopolitical uncertainty persists."
"Digital sovereignty has been discussed for years in Europe, but concerns around the dependence on US cloud providers - which account for the majority of the European cloud market - have sharply risen as the relationship between the US and Europe becomes strained. "What started to happen in '25 is now going into '26," said Rene Buest, senior director analyst at Gartner, with ongoing uncertainty from European organizations about how political changes could affect the IT and digital landscape."
"Many European organizations are worried they could be shut off from vital cloud services for political reasons - as happened to senior staff at the International Criminal Court last year. Some also view investment in sovereign cloud services as a way to boost the domestic cloud provider landscape. There's a growing number of European organizations committing to spend a certain percentage of annual revenue on local IT providers, according to Buest."
Sovereign cloud IaaS investments are accelerating globally as organizations seek digital sovereignty and workload geopatriation. European spending is forecast to rise from $6.9bn in 2025 to $12.6bn in 2026 and $23.1bn in 2027 amid geopolitical uncertainty. Global sovereign IaaS expenditure is projected at $80.4bn this year, rising to $110bn by 2027. Demand will be strongest from public sector, regulated industries, and critical infrastructure such as energy and telecoms. Dependence on US hyperscalers is a growing concern in Europe, with fears of politically driven service shutdowns. Some organizations are directing procurement toward domestic cloud providers and local IT vendors.
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