Data sovereignty is top of mind for business leaders across Europe, shaping strategic decisions at Microsoft’s customers, according to panelists at the tech giant’s European Digital Commitment Day in Vienna, Austria last week.
Digital sovereignty, the ability for an organization to maintain clear control over how its data is stored, accessed, and governed, has moved from a technical concern to a board-level priority. As organizations expand their digital footprints and accelerate cloud adoption, rising regulatory scrutiny and growing customer expectations are forcing businesses to rethink how they manage data.
Sovereignty means different things to different people, the panelists noted, but the common thread is the need to take control over customer data, which has become essential to maintaining trust. The pressure to demonstrate that control is now shaping transformation plans, vendor choices and long-term customer experience strategies.
Control of Critical Data Is Becoming a Strategic Must
The energy crisis following the invasion of Ukraine exposed the geopolitical dimension of critical infrastructure, reinforcing the need for systems that can operate independently in extreme circumstances.
“Digital sovereignty is about stability and resilience,” said Julia Weberberger, Head of Corporate Strategy at Energie AG Oberösterreich, describing it as a source of power. “[W]e have to make sure that we operate our critical data on our own. We operate our own data center, with emergency power supply, and rely on a multi-provider strategy to create redundancies... It's also very important that we build expertise in digital sovereignty in Europe, but also within our company.”
Europe is developing a new mindset built on innovation and security, Weberberger said, shaping companies, knowledge, opinions and even social narratives. In this environment, European data sovereignty is becoming a key strategic concern that requires balance.
As Martina Saller, Public Sector Sales Lead at Microsoft Austria said:
"It's not a black and white discussion. It's not about choosing the path of sovereignty or choosing the path of innovation. It's about balancing and orchestrating… a risk-based approach."
That layered approach should separate highly sensitive workloads from those suited for cloud-based innovation.
Public administrators highlighted that sovereignty is multidimensional: technical, legal, economic and emotional. What customers want above all is visibility and choice. As one leader emphasized, beyond control over data processing and storage, true sovereignty also means being able to choose the parts of a technology package they need rather than being required to buy licenses for bundles, which drives up costs.
Procurement rules, however, are still playing catch-up. With different requirements scattered across the EU, organisations often end up doing the same work multiple times. A more unified approach that allows for shared certifications and tech that plays nicely across borders would make it easier for businesses and public bodies to build modern, sovereign digital systems. And to make sure those sovereignty rules help innovation instead of getting in the way, organizations say they need clear guidance and strong partnerships with their tech providers.
What Customers Need from Cloud Partners
A recurring message throughout the discussion was that sovereignty cannot be achieved in isolation. Customers expect their cloud partners to help them meet changing regulatory, security and operational demands.
As Norbert Parzer, Certified Public Accountant, Tax Advisor and Partner at EOS put it, “first find the companion before you start the journey.”
To address concerns around extraterritorial data access, Jeff Bullwinkel, VP and Deputy General Counsel, Corporate External and Legal Affairs at Microsoft EMEA, detailed the steps the vendor has taken to provide assurance and legal protection.
The tech giant has built the EU Data Boundary for the Microsoft Cloud to “mitigate the risk, or reduce the surface area of risk by just reducing situations in which data is transferring from one continent to another.”
Just as crucial is Microsoft’s assurance that it will resist demands from governments to divulge customer data, Bullwinkel said: