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Europe’s Cloud Dilemma: Dependence, Sovereignty and the Push for Choice

Europe’s cloud challenge is to keep the benefits of widely used cloud services while reducing concentrated dependence through capacity, sovereignty and easier switching.
From TheFinanceBase Team6 min to read

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Europe’s cloud dilemma is that businesses and public bodies increasingly rely on cloud services, while a large share of the market is controlled by providers headquartered outside the EU. The European Commission says three non-EU hyperscalers control more than 70% of the European cloud market in its 2026 proposal for a Cloud and AI Development Act. That figure is the Commission’s policy-case estimate, not an independently audited or timeless statistic. Europe’s response is not simply to move data into European data centres: it is to build capacity, strengthen control and resilience, and make it easier to switch providers.

Why is Europe dependent on US cloud providers?

Cloud services have become routine infrastructure for European organizations. Eurostat reported that 52.7% of EU enterprises used paid cloud services in 2025, up 7.4 percentage points from 2023. Its survey covers enterprises with at least 10 employees or self-employed persons in specified NACE Rev. 2 sectors; it does not describe every company, small business or individual consumer. Eurostat’s 3 February 2026 release also shows that, among cloud-using enterprises, email (85.2%), office software (71.7%) and file storage (71.5%) were common paid cloud uses. Those figures describe service use, not providers’ shares of cloud revenue.

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The Commission’s 2026 proposal argues that this reliance sits alongside a concentrated supply market: it says three non-EU hyperscalers control more than 70% of the European cloud market. The proposal presents the concentration as a strategic risk because organizations may depend on non-European suppliers for cloud and AI capabilities. It does not establish that every European customer uses those providers, or that all workloads face the same risks.

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Dependence is not only a question of where a company is headquartered. For an organization, the practical exposure can involve who controls the service and its operations, what technologies and supply chains it relies on, how resilient it is, and how difficult it would be to move workloads elsewhere. The Commission’s view of sovereignty therefore spans legal and jurisdictional control, data and AI, operations, supply chain, technology, security and compliance, and environmental sustainability. Its cloud sovereignty framework uses 48 criteria across eight categories rather than treating data location as a complete answer.

What does cloud sovereignty mean?

Cloud sovereignty is the degree to which an organization or public authority can retain meaningful control over its cloud services and the data and systems they support. It is a set of dimensions to assess, not a simple label that follows automatically from a provider’s nationality or a server’s address.

  • Legal and jurisdictional control: which laws and authorities may apply to the provider and its operations.
  • Data and AI: how data and AI-related capabilities are controlled and governed.
  • Operations and resilience: who operates the service and whether it can continue through disruption.
  • Technology and supply chain: the extent of reliance on particular technologies, suppliers and components.
  • Security, compliance and sustainability: whether the service meets relevant safeguards and requirements, including environmental considerations.

The Commission’s framework distinguishes a Sovereignty Effectiveness Assurance Level from an overall score. Its levels correspond to thresholds for data sovereignty, technological autonomy and full sovereignty. That distinction matters: a high score in one dimension should not be mistaken for proof that every operational, legal or technical dependency has disappeared.

Does storing data in Europe make a cloud sovereign?

No. European data-centre location can matter, but it does not by itself settle who controls the provider, which laws may apply, who operates the service, or what technology and suppliers it depends on. The Commission’s April 2026 procurement announcement illustrates the distinction: it says the Proximus/S3NS technical environment is based on Google Cloud technology but is operated exclusively by EU companies. In the same account, the Commission reports that Proximus/S3NS reached SEAL-2, while most awardees reached SEAL-3. These are Commission descriptions of the contracts and assessment outcomes, not a general certification of every service those organizations sell.

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For buyers, the useful question is not just “Where is my data?” but also “Who can access and operate the service, what happens if a supplier or service is unavailable, and how portable are my workloads?” The answers depend on the particular service, contract and use case.

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Can Europe build its own cloud infrastructure?

The Commission’s proposed Cloud and AI Development Act combines infrastructure expansion with measures intended to address dependence. Its proposal aims to at least triple EU data-centre capacity within five to seven years and meet business and public-administration needs by 2035. These are policy targets, not capacity already built or proof that Europe will meet future demand. The proposal also seeks to streamline deployment and address energy demand through efficiency, cooling, power management and integration with energy systems. The Commission’s cloud policy page describes the Act as a proposal adopted by the Commission in June 2026.

More data-centre capacity alone would not resolve every sovereignty concern. Capacity must be paired with services that organizations can operate securely, maintain through disruption and use without becoming unreasonably difficult to leave. Technical capability, managed-service quality, supply-chain exposure, energy sustainability and interoperability all affect whether a European alternative is suitable for a given workload.

What does EU sovereign-cloud procurement show?

Public procurement has moved from general policy statements to a specific effort to diversify suppliers. On 17 April 2026, the European Commission’s Directorate-General for Digital Services announced contracts under its Cloud III Dynamic Purchasing System, with a ceiling of up to EUR 180 million over six years. The Commission said it “awarded four contracts to ensure diversification and resilience, avoiding potential lock-in by a single provider.” The ceiling is the value of the procurement framework, not a statement that the full amount has been spent.

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The four awarded providers or partnerships named by the Commission were:

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  • A Luxembourgish-French partnership led by Post Telecom with OVHcloud and CleverCloud.
  • German provider STACKIT.
  • French provider Scaleway.
  • A Belgian-French-Luxembourgish partnership led by Proximus with S3NS, Clarence and Mistral.

The framework set eligibility at SEAL-2, which the Commission describes as data sovereignty. It says most successful providers reached SEAL-3, described as digital resilience, while Proximus/S3NS reached SEAL-2. These awards show how a public buyer can use thresholds and multiple suppliers to pursue diversification; they do not establish that one provider suits every organization or workload. The Commission’s announcement gives the award details, while its framework explainer describes the assessment approach.

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How can a business switch cloud providers?

Switching requires more than choosing a destination provider. Workloads may rely on provider-specific services, data formats, identity and security settings, or operational processes. A move therefore involves planning, compatibility checks and effort even when policy is designed to reduce barriers.

The Commission says the Data Act seeks to make switching cloud providers “fast, free and technologically fluid.” That is its stated policy aim against vendor lock-in, not a guarantee that migration has no practical cost or disruption. Organizations can make future transitions more manageable by considering portability and exit arrangements when they choose services and negotiate contracts, rather than waiting until a move becomes urgent. The Commission’s Data Act page sets out its description of switching measures.

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What should organizations weigh when choosing a cloud?

There is no single “European cloud” choice that automatically balances every priority. An organization comparing services can use the Commission’s multidimensional sovereignty approach alongside its own operational requirements:

  • Legal control: identify the provider and relevant operating entities, and assess the jurisdictional and contractual questions for the workload.
  • Continuity: examine operational responsibility, resilience arrangements and the consequences of a provider outage.
  • Technical fit: confirm that the service can meet the workload’s capability, security and managed-service needs.
  • Portability: understand dependencies on proprietary features, data-export processes and the practical work involved in switching.
  • Diversification: consider whether concentration in one provider creates a risk that matters to the organization.
  • Supply chain and sustainability: assess relevant technology dependencies and energy or environmental requirements.

These questions help separate different trade-offs. A provider may offer strong operational control while relying on underlying technology developed elsewhere; another may offer attractive technical capabilities but create more switching difficulty. The appropriate balance depends on the service and the organization’s risk, compliance and continuity needs, not on a label alone.

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