Cloud sovereignty without compromise

A playbook for innovating with confidence, resilience, and trust

Cloud sovereignty without compromise
  • Insight
  • 4 minute read
  • January 12, 2026

Cloud sovereignty is fast becoming a strategic imperative as organisations look to accelerate transformation and drive AI innovation—without compromising data protection. This report sets out the five key steps along the sovereign cloud journey.


At a glance

  • Cloud sovereignty allows organisations to align innovation, compliance, and transformation goals.

  • A new generation of sovereign cloud models means that organisations can now meet sovereign demands in areas such as data residency and encryption—without losing access to advanced cloud capabilities.

  • The starting point for choosing the right sovereignty model—or more likely models—is gauging the data classification, residency, and access control requirements across different areas of the organisation and its third-party ecosystem.

Data and cloud are the driving forces powering digital transformation and business model reinvention. But with the data and cloud potential comes increasing risks and challenges—growing reliance on third-party service providers, more data held on external platforms, and an ever-larger surface for cyberattack.

Reaping the benefits of these technologies therefore demands confidence and control over data, infrastructure, and governance—cloud sovereignty.

Adapting faster

Regulators across Europe, the Middle East, and Africa are stepping up their focus on data residency, data protection, and other key aspects of cloud sovereignty. But sovereignty is far more than just a compliance exercise.

As organisations move beyond cloud migration to focus on optimisation, accountability, and trust, sovereignty allows organisations to innovate on their own terms. They can make the most of their rapidly advancing cloud and AI capabilities, safe in the knowledge that access to data is under their control and that their technology choices remain open.

“Cloud Sovereignty has shifted from a minor compliance task to a top priority, encompassing not just data location but governance, third-party risk, and protection against surveillance and cyber threats.”

Sebastian Paas,Partner, EMEA Cloud Transformation Leader, PwC Germany

Balancing functionality and control

In an important step forward, a new generation of Sovereign Public, Private, and Partner Cloud solutions means that organisations can take charge of their data, while still benefitting from the scalability, security, and optimised performance of hyperscale cloud services.

Key advantages of these new models include agility and flexibility in assigning different types of data and workloads to the most appropriate model and level of protection. For example, organisations can deploy a Private Cloud for their most sensitive and proprietary data. Areas where faster adoption of new technology is possible could be housed within a Partner or Sovereign Public Cloud.

“The choice between Public Cloud and on premises is giving way to diversified hybrid solutions, with data allocated to Public, Private, or National Partner Clouds according to its sensitivity and criticality.”

Mauro Xavier,Partner, EMEA Microsoft Alliance Leader, PwC Spain

Five key steps along the sovereign cloud journey

With so much of an organisation’s transformation and wider business goals hinging on cloud capabilities, the formulation of its sovereign cloud strategy shouldn’t be left to technology teams on their own. It calls for active input and sponsorship from business, compliance, and data management teams. To turn ambition into advantage, organisations should:

  • Define the sovereign strategy
  • Tailor models to strategic goals
  • Set clear and realistic boundaries
  • Design the cloud architecture
  • Build strategic partnerships

“As organisations embrace digital transformation, clear control over where and how data is governed is a strategic imperative. By taking ownership of cloud data governance, leadership teams will not only deliver compliance, but also resilience.”

James Rashleigh,Cyber Business Leader and Cyber Security Partner, PwC UK

Ready for a sovereign future?

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Authors

Mark Chaban, Corporate Vice President, Commercial Cloud Solutions, Microsoft Europe, Middle East & Africa

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Martin Vliem, National Technology Officer, Microsoft Europe North

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Mauro Xavier, Partner, EMEA Microsoft Alliance Leader, PwC Spain

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Sebastian Paas, Partner, EMEA Cloud Transformation Leader, PwC Germany

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James Rashleigh, Partner, EMEA Cyber Leader, PwC UK

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Frédéric Garnier, Partner, Cloud Transformation Leader, PwC France et Maghreb

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Hauke Schaettiger, Partner, Head of Cloud Transformation, PwC Germany

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Moritz Anders, Partner, Cyber Security & Privacy Leader, PwC Germany

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Mina Ghabbour, Partner, Cloud Transformation Leader, PwC Middle East

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Claudius Meyer, Partner, Cloud Transformation Leader, PwC Switzerland

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