Europe's Digital Sovereignty Shifts from Aspiration to Requirement

The European Union is shifting its focus towards digital sovereignty in response to heightened geopolitical uncertainty and rising cyber risk. This shift is driven by the need for resilience expectations, critical service dependency, and the fear that critical services may not remain available during a crisis. Cloud market concentration is a significant concern, with the top three providers accounting for 70% of the European market last year. In contrast, European providers hold around 15% of the market, highlighting the region's over-dependency on foreign technology.

The EU has not agreed on a definition of digital sovereignty, which ranges from blanket data localization edicts to industrial policy to national security. However, the absence of an agreed definition should not be mistaken for an absence of intent. Digital sovereignty is already shaping procurement, regulatory compliance, and technology strategy. Policymakers aim to reduce over-dependency on foreign technology to ensure national resilience and mitigate the risks associated with cloud market concentration.