Welcome to this week’s edition of the Fierce Network Research Bulletin, where we’re talking about more about how cloud providers are meeting demand for sovereign clouds and the role that AI plays. Also read on for the Control Plane, Stat of the Week and the Dropped Packet. ​​​​​​

• Cloud providers are stepping up to meet enterprise and government needs for sovereign cloud

• “Sovereign cloud” is when governments pass laws and regulations requiring residents’ data to remain within national borders to protect privacy and security

• Sexy? No, but sovereign cloud is important

As nations and regions place restrictions on data privacy and security in the cloud, providers are stepping up with sovereign cloud offerings that to meet customer needs.

Information and AI are vital resources, leading governments to adopt laws and regulations that keep data within national boundaries. Sovereign cloud initiatives help countries — and regions, like the European Union — assert control over their data and infrastructure.

Last week, we provided an overview of the sovereign cloud market, as IDC projects global spending on sovereign cloud solutions will exceed $250 billion by 2027.

This week, let’s take a look at how providers are meeting demand for sovereign cloud. 

AWS says 'Ja' to Europe

AWS plans to invest €7.8 billion in the AWS European Sovereign Cloud in Germany through 2040. This investment “reflects AWS’s long-term commitment to meeting Europe’s digital sovereignty needs,” the company announced this month. By the end of 2025, AWS plans to launch its first AWS Region in the State of Brandenburg, Germany.

AWS expects its long-term investment to contribute €17.2 billion to Germany’s total Gross Domestic Product (GDP) through 2040, due to ripple effects through the local cloud economy such as accelerating productivity, empowering digital transformation and partners, upskilling the cloud and digital workforce, developing renewable energy and benefiting communities it operates in. AWS expects the investment to support an average 2,800 full-time equivalent jobs in local German businesses annually, including construction, facility maintenance, engineering and telecommunications.

The cloud region will be controlled exclusively by personnel located in the EU, including data center access, technical support and customer service.

The German launch is an extension of AWS’s Digital Sovereignty Pledge, published in October and signed by Matt Garman, recently named AWS CEO. At the time the pledge was published, Garman was SVP AWS sales, marketing and global services.

AWS is “sovereign-by-design,” according to the pledge. Customers can deploy data to eight existing AWS Regions in Ireland, Frankfurt, London, Paris, Stockholm, Milan, Zurich and Spain to keep data securely in Europe. The European Sovereign Cloud is designed to be separate and independent of existing regions, but with the same security, availability and performance.

Like the other hyperscalers, AWS is using partners to bring services to enterprises. Partners include SAP Enterprise Cloud Services and SAP Sovereign Cloud Services, O2 Telefónica in Germany and T-Systems.

Microsoft brings sovereignty to its full cloud stack

Microsoft launched Microsoft Cloud for Sovereignty, running in Azure data centers located in more than 60 public cloud regions. The service, announced in 2022, provides residency options for the entire Microsoft Cloud, including Microsoft 365, Dynamics 365, and Azure.

The company launched Microsoft Cloud for Sovereignty for governments in general availability in December. That service is intended to help governments meet compliance, security and policy requirements for cloud sovereignty, as an alternative to on-premises environments, which are less scalable, secure and resilient than the cloud, Microsoft says.

“Customers can implement policies to contain their data and applications within their preferred geographical boundary, in alignment with national or regional data residency requirements,” according to the post by Cory Sanders, corporate VP, Microsoft Cloud for Industry.

Like AWS, Microsoft is relying on partners for implementation, including the National Cyber Security Center in the Netherlands (NCSC-NL), and the city of Amsterdam in partnership with InSpark, a subsidiary of Royal KPN; Leonardo, a multinational defense contractor offering cloud services to its aerospace, defense and security customers, based in Italy; Proximus, in Belgium; Atea in Sweden, and G42 in the UAE.

Google: ‘enormous flexibility’

Google offers sovereign cloud services in the Asia-Pacific region (APAC), South America, Australia and the U.S. Kubernetes allows enterprises to move workloads between public, private and hybrid clouds, Brian Roddy, VP security product management, Google Cloud told Fierce.

“We have enormous flexibility to go to customers and say if you have workloads that you need to run fully disconnected, we can help you do that. If you have workloads that you want to run on the public cloud, we can do that. If you want to have workloads that run across both, we have the technologies,” Roddy said.

Software controls let enterprises turn sovereignty features on and off as needed, as data sovereignty laws change, Roddy said.

Google launched “Cloud. On Europe’s Terms” in 2021, focusing on partnering with local European companies to provide data sovereignty. “Local partners have deep expertise in the region and country,” Roddy said.

For enterprises with even greater security needs, the cloud provider offers Google Distributed Cloud, fully disconnected from public cloud regions, for public sector and regulated customers. In the U.S., Google has Impact Level 5 (IL5) certification on its public cloud, to allow the US Department of Defense to use its service.

“If people want data sovereignty, we make sure that no matter what you do in the cloud from a service perspective, we can automatically keep data within the certified region you specify,” Roddy said.

IBM: Enterprise focus

With its Enterprise Cloud for Regulated Industries, IBM is working with partners and clients to support requirements in the European Union, Saudi Arabia, India, Abu Dhabi and Africa. For example, IBM is working with telecom provider Bharti Airtel to offer edge cloud services to organizations in India, meeting Ministry of Electronics and IT requirements.

IBM is particularly focused on banks and financial institutions, which have unusually stringent compliance requirements.

IBM recommends a hybrid approach to enterprises, mixing on-premises, hybrid and edge for best outcomes, said Utpal Mangla, IBM VP for industry edge, sovereign cloud.

The company doesn’t see itself as a hyperscaler, instead focusing specifically on enterprise clients, including telcos, Mangla said.

Oracle’s Ellison goes big

Larry Ellison, Oracle chairman and CEO, likes to throw down bold statements. He did it again on a March earnings call.

“Pretty much every government is going to want a sovereign cloud and dedicated region for that government,” he said.

Serbia is standardizing on Oracle Cloud regions for its national government, and Kenya and Rwanda are combining Oracle Cloud with Starlink Internet connectivity to bring the Internet to remote regions and improve agriculture, Ellison said.

Oracle is negotiating sovereign regions with several national governments. “We talk about winning business with companies. For the first time, we’re beginning to win business for countries,” he said.

Ellison claims Oracle’s sovereign cloud services helped Albania streamline bringing its laws into alignment with the European Union so it could join that alliance. That process took Serbia eight years, but with Oracle’s help, Albania can do it in 18 months to two years.

Sovereign cloud can also enable food security, Internet access for rural schools and hospitals, and other applications, as well as streamlining vaccination and other healthcare programs, Ellison said.

Key to Oracle’s strategy is its distributed cloud architecture, which allows Oracle’s sovereign cloud solution to be separately deployed and operated while delivering the same services offered by Oracle’s public cloud, with no premium fees for sovereignty and the same service level agreements (SLAs) on performance, management and availability. “This also makes deployment easier since Oracle’s sovereign clouds use the same hardware, software, and services as its public cloud, with greater access control and other compliance restrictions enabled,” said Karan Batta, senior vice president, Oracle Cloud Infrastructure, in email.

Oracle recently partnered with NVIDIA to deliver sovereign AI for governments and enterprises deploying “AI factories”—cloud infrastructure optimized for running AI.

Like other cloud providers, Oracle is partnering with other companies to deliver sovereign cloud services, including Nomura Research Institute (NRI), Fujitsu, New Zealand’s TEAM IM as well as Vodafone and NRI.

Vultr: ‘We don’t touch it'

Cloud provider Vultr specializes in providing access to Nvidia processors for AI workloads, operating in 32 regions worldwide. The company launched a sovereign cloud and private cloud offering last month.

“All the data in the infrastructure is completely contained and managed within national borders,” Vultr CMO Kevin Cochrane told Fierce. “Data is resident within the national boundary and never leaves.” Hardware, software, data and the control plane all reside in-region.

“You own it. We have no rights. to it. We don’t touch it,” Cochrane said.

The company provides sovereign cloud services to national governments, top research institutions and enterprises, with a specialty in AI, operating in more than 32 data center regions worldwide, including Brazil, Mexico, the UK, Netherlands and Sweden. Vultr provides a full range of cloud computing infrastructure for cloud-native and AI-native engineering teams.

Like going to the DMV

Overall, the cloud platforms are doing a good job serving the sovereign needs of governments and enterprise, with similar offerings, said Gartner analyst Sid Nag.

Nag reiterated an observation he made for our earlier article — that he’s baffled why no hyperscaler platform has emerged from Europe to serve European organizations. Moreover, individual European nations have different requirements. Standardizing Europe-wide and running on a European hyperscaler would provide greater sovereignty, Nag said.

“If sovereignty is so important, why haven’t they built a cloud of their own to meet their mandates rather than relying on North American providers?” Nag said. “And the patchwork fo requirements is a challenge.”

Overall, Nag sees cloud sovereignty as a requirement, but not hugely sexy. “It’s like a car. You have to go to the DMV every now and then to make sure you pass inspection. You don’t want to do it, but you have to do it,” he said.

Control plane

What I'm reading this week: 

• US sanctions against Huawei keep backfiring. Enough already. [Stephen M. Saunders MBE / Fierce Network]
• Google promised better search — now it’s telling us to put glue on pizza[Kylie Robison / The Verge]
• T-Mobile is raising prices on some older plans [Monica Alleven / Fierce Network]
• Nvidia’s Sales Triple, Signaling AI Boom’s Staying Power
• Microsoft’s new Windows Copilot Runtime aims to win over AI developers [Tom Warren / The Verge]
• Giving Windows total recall is a privacy minefield [Richard Speed / The Register]
• Google CEO Sundar Pichai on AI-powered search and the future of the web [Nilay Patel / The Verge]
• Crown holds all the keys to the castle after shareholder vote [Monica Alleven / Fierce Network] — “Succession” in real life as Crown Castle founder Ted Miller loses his fight for control of the tower company.
• Microsoft Azure’s Russinovich sheds light on key generative AI threats [David Strom / CSO Online]
• Oh sure, everybody loves rural broadband, now [Linda Hardesty / Fierce Network] — Headline of the week.
• In space, everyone can hear you scream ... for satellite to cell service [Dan Jones / Fierce Network) — Apple, T-Mobile and SpaceX lead in delivering the next generation of satellite cell service.
• Ericsson invests $50M in 'open RAN ready' 5G factory [Martha DeGrasse / Fierce Network]
• SOS: AT&T outage occurs in Virginia & North Carolina [Dan Jones / Fierce Telecom] — AT&T blames the outage on equipment failure.
• Exclusive: Lumen CTO talks potential FWA, wholesale partnership plays [Masha Abarinova / Fierce Network]
• ALSO: Exclusive: Lumen’s new CTO wants to weave a fresh fabric for the cloud’s future

Stat of the week

62% of CEOs say growth is the top business priority this year, according to a Gartner survey. Cost management was a relatively weak priority, suggesting most CEOs think the most challenging economic times are past, a Gartner analyst said. And 34% of CEOs identify AI as a top theme for digital transformation.

Dropped packet

That's all for this week, ladies and germs. Visit us Fridays for the latest issue of our Fierce Network Research Bulletin. 

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