Sovereign Cloud vs Public Cloud: Choosing the Right Storage Strategy

Public cloud and sovereign cloud are no longer niche technical terms—they’re at the heart of global debates on data control, security, and compliance. For businesses in every industry, deciding where and how to store and process data has become a strategic priority.

Cloud computing is big business these days.

Analyst firm Canalys reported that total cloud infrastructure spending hit $320 billion in 2024, a 20% increase from the previous year. Growth is expected to continue at around 19% in 2025, with hyperscalers like Amazon Web Services (AWS), Microsoft Azure, and Google Cloud investing hundreds of billions into new, larger data centres worldwide.

But with data now one of the most valuable corporate assets, organisations face a pressing choice. Do they stick with the scalability and speed of the public cloud, or adopt the compliance-first model of the sovereign cloud?

This article unpacks the differences, benefits, and trade-offs between public cloud vs sovereign cloud, and how to decide which model or mix is right for your business.

What is the difference between a public cloud and a sovereign cloud?

A public cloud is owned and operated by a large cloud provider, such as AWS, Microsoft Azure, or Google Cloud. It offers computing, storage, and networking services over the internet to multiple customers.

Infrastructure is shared with other customers but virtualised for separation meaning your data won’t be confused with that of other companies. Public cloud regions often span multiple countries and jurisdictions so you might not know exactly where your information is stored at any given time.

A sovereign cloud is different. It ensures that all data, workloads, and operations remain within a specific country or region, and under local jurisdiction. It will comply with domestic data residency, governance, and access rules.

Sovereign clouds are typically operated by national providers, or by local partners using hyperscaler technology. Examples of that include Microsoft Cloud for Sovereignty, Google Sovereign Cloud with T-Systems in Germany.

In short: public clouds are optimised for global reach, simplicity and efficiency. Sovereign clouds, meanwhile, are optimised for local control and compliance.

Why would a company choose the public cloud?

Public cloud services are the domination option for most companies, and the reasons are fairly straight forward:

• Shared infrastructure and pay-as-you-go pricing can cut IT costs significantly
• Cloud storage allows companies to instantly scale up or down to handle seasonal spikes, new projects or changing workloads
• Public cloud customers enjoy the benefits of hundreds of new features that hyperscalers release annually, which include artificial intelligence (AI), machine learning (ML) analytics, and serverless tools
• The global architecture means you can deploy workloads close to customers worldwide with reduced latency

Assuming your company isn’t impacted with stringent data sovereignty requirements, public cloud storage will provide agility, speed and innovation at scale on a flexible budget. That’s more than enough for most businesses.

Why would a company choose a sovereign cloud?

Organisations will turn to sovereign cloud solutions when data sensitivity and compliance outweigh their need for global scale.

As we will get to later in this article, this need is increasing but let’s first address what the sovereign cloud brings to its customers.

• Data residency laws: Regulations may require personal or classified data to remain inside national borders. For example France’s SecNumCloud
• Compliance mandates: companies in healthcare, finance, government and defense often require exclusive domestic control over data access
• Geopolitical risk management: The potentially sweeping impact of the US CLOUD Act has made many companies look at storage solutions from non-US providers
• National security is now paramount for many governments, which view control of digital infrastructure as critical to sovereignty

In these cases, the right sovereign cloud storage solution can ensure legal compliance and mitigate those jurisdictional risks.

What impact does regulation have?

Regulation is the leading driver for sovereign cloud adoption.

With data becoming an increasingly critical commodity for companies and governments, the amount of regulation and the scope of its reach has increased significantly. SpaceTime’s sovereign storage solutions are purpose-built to address the typical data sovereignty challenges, delivering guaranteed data residency, uncompromising security, and full compliance with the world’s strictest standards, including:

• GDPR: The EU’s rigorous privacy law defining how personal data is stored, processed, and transferred. EU Data Act (enforced in September 2025), a piece of regulation shaping access rights and fair usage of industrial and non-personal data across the EU
• NIS 2 Directive: an updated cybersecurity standard requiring stronger resilience, especially in essential sectors and supply chains
• Schrems II ruling: a transformative data-transfer case that invalidated the Privacy Shield and emphasised the need for strict European-based data protection measures
• Sector-specific compliance: Regulations such as HIPAA (US healthcare), MAS TRM (Singapore finance), and ISO 27001/27701 for global information security and privacy

In Europe, an IDC survey found that 62% of organisations choose local cloud providers primarily for data sovereignty and compliance. That data point is from 2023, so the figure may be even higher now. Non-compliance can trigger heavy fines and forced workload migration.

What are the security challenges?

Cloud storage across both public and sovereign solutions uses the same technology, but the operational differences do present different challenges when it comes to security.

Hyperscalers invest billions of dollars each year into security tooling, but they operate on a shared responsibility model. So any outrage or breach would potentially affect multiple customers, potentially at random.

In terms of attack vectors, misconfigurations and stolen credentials remain common breach vectors.

When it comes to sovereign cloud solutions, local control limits foreign access but it may also mean more limited access to the security services that hyperscalers offer. Picking the right operator is crucial too, since smaller players may not offer the same level of resources that global players do.

In both models, security depends on customer controls, including encryption, access governance and monitoring, and not just the provider’s infrastructure.

What about the operational challenges?

Operating in the public cloud offers access to rich ecosystems, advanced automation, and mature APIs, but it also brings the risk of vendor lock-in. Relying too heavily on a single provider, even a hyperscaler, can leave your business vulnerable. An outage, cyberattack, or other major disruption could slow operations or take you completely offline.

In contrast, sovereign clouds may not match the full feature set of their global counterparts and can introduce higher latency. T

here’s also a skill gap to contend with, as sovereign cloud environments often require specialised expertise that can be harder to find.

For organisations running a hybrid strategy, integration adds another layer of complexity—security policies, identity management, and monitoring must be consistent across both environments.

While many businesses choose to blend public and sovereign cloud models, this approach inevitably raises operational demands.

How Hyperscalers Manage Sovereign Clouds

In response to rising demand, hyperscalers have developed sovereign versions of their platforms.

This typically involves partnering with a local infrastructure provider and finding core management staff from the domestic country. The strategy has focused strongest on Europe, where regulation is more stringent and there are concerns around the US CLOUD Act.

• Microsoft Cloud for Sovereignty delivers Azure capabilities with enhanced data residency, greater transparency, and local partner operation
• Google Sovereign Cloud is operated in collaboration with domestic providers such as T-Systems in Germany and Thales in France
• AWS has introduced Dedicated Local Zones, offering isolated infrastructure located entirely within specific jurisdictions

These offerings are designed to allow customers to keep much of the flexibility and innovation of the public cloud while complying with sovereignty requirements.

But, as we will now explain, there are still question marks around whether the US CLOUD Act still applies given the involvement of hyperscalers.

What is the unique situation in Europe?

Europe leads the sovereignty conversation due to heightened regulation from the EU and countries in the region that see data storage as an issue of national security.

Important factors shaping the landscape include:

• GDPR and national security priorities
• The Gaia-X initiative to develop a federated European cloud framework
• High US hyperscaler dependency: AWS, Azure, and Google continue to hold an estimated market share of more than 70%
• National sovereign cloud projects are being developed in countries like France, Germany and Italy

Then there’s the US CLOUD Act which, as we have mentioned, allows US law enforcement to compel US-based companies to provide requested data stored on its servers regardless of the location of that data.

In effect, the US government could compel any US hyperscaler to provide data from one of its European customers even if that data is sitting on European soil.

That's a massive security risk and that's what European data sovereignty exists to prevent. Storing data using European cloud providers with data centres on European soil remains the clearest strategy to mitigate that risk.

What is the best option for your business?

Choosing between sovereign cloud vs public cloud depends on:

• Data classification: Identify sensitive workloads requiring domestic residency
• Risk tolerance: Weigh compliance, geopolitical, and contractual risks
• Hybrid potential: Many organisations combine sovereign cloud for regulated workloads with public cloud for innovation and scale
• Interoperability planning: Ensure governance, monitoring, and security policies work across both environments.

The decision isn’t necessarily straight forward. It’s about blending the right mix to achieve compliance, resilience, and competitive advantage that your business needs, not just now but as it grows in the future.