PUBLISHER: The Business Research Company | PRODUCT CODE: 1852668
PUBLISHER: The Business Research Company | PRODUCT CODE: 1852668
A sovereign cloud is a cloud computing environment specifically designed to adhere to the laws and regulations of a particular country or region, ensuring that data remains under local jurisdiction. It allows organizations full control over data residency, security, and privacy in accordance with national standards. Sovereign clouds are commonly used to meet stringent regulatory, legal, or compliance requirements.
The primary components of a sovereign cloud include solutions and services. Solutions consist of cloud offerings that maintain data within a designated country, ensuring regulatory compliance and enhanced security. These solutions can be deployed as fully managed sovereign clouds, hybrid sovereign clouds, or on-premises sovereign clouds and cater to organizations of various sizes, from small and medium enterprises to large corporations. Applications include operational sovereignty, technical sovereignty, and data sovereignty, with end users spanning government and public sector organizations, banking, financial services and insurance (BFSI), healthcare and life sciences, media and entertainment, telecommunications, manufacturing, energy and utilities, and other industries.
Note that the outlook for this market is being affected by rapid changes in trade relations and tariffs globally. The report will be updated prior to delivery to reflect the latest status, including revised forecasts and quantified impact analysis. The report's Recommendations and Conclusions sections will be updated to give strategies for entities dealing with the fast-moving international environment.
The rapid escalation of U.S. tariffs and the resulting trade tensions in spring 2025 are significantly impacting the information technology sector, particularly in hardware manufacturing, data infrastructure, and software deployment. Higher duties on imported semiconductors, circuit boards, and networking equipment have raised production and operational costs for tech firms, cloud service providers, and data centers. Companies relying on globally sourced components for laptops, servers, and consumer electronics are facing longer lead times and increased pricing pressures. In parallel, tariffs on specialized software tools and retaliatory measures from key international markets have disrupted global IT supply chains and reduced overseas demand for U.S.-developed technologies. To navigate these challenges, the sector is accelerating investments in domestic chip fabrication, diversifying supplier bases, and adopting AI-driven automation to enhance operational resilience and cost efficiency.
The sovereign cloud market research report is one of a series of new reports from The Business Research Company that provides sovereign cloud market statistics, including sovereign cloud industry global market size, regional shares, competitors with the sovereign cloud market share, sovereign cloud market segments, market trends, and opportunities, and any further data you may need to thrive in the sovereign cloud industry. This sovereign cloud market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenario of the industry.
The sovereign cloud market size has grown exponentially in recent years. It will grow from $83.93 billion in 2024 to $103.97 billion in 2025 at a compound annual growth rate (CAGR) of 23.9%. The growth observed during the historical period was driven by increasing demand for data sovereignty, rising compliance with government regulations, greater focus on cybersecurity threat mitigation, expanding cloud adoption, and growing deployment of AI workloads.
The sovereign cloud market size is expected to see exponential growth in the next few years. It will grow to $242.03 billion in 2029 at a compound annual growth rate (CAGR) of 23.5%. The projected growth during the forecast period is expected to be driven by rising geopolitical tensions, increasing digital transformation initiatives, growing public sector investments, greater enterprise focus on data localization, and heightened risk management requirements. Key trends anticipated include advancements in cloud security protocols, integration with AI and analytics, adoption of hybrid cloud technologies, development of data residency solutions, and progress in encryption and key management.
The growth of the sovereign cloud market is being driven by increasing concerns over cybersecurity and national security. Threats such as cyberattacks, data breaches, and digital espionage pose significant risks to critical infrastructure, defense systems, and sensitive national information. Heightened geopolitical tensions have contributed to the rise in these threats, as conflicts between nations often lead to more cyber intrusions and attempts to disrupt key systems. Sovereign cloud solutions help address these risks by storing and managing sensitive data within a country's legal framework, limiting exposure to foreign access and cyber threats. For example, during the 2022-23 financial year, nearly 94,000 cybercrime reports were submitted in Australia, representing a 23% increase compared to the previous year, with an average report submitted every six minutes, according to the Australian Signals Directorate. This surge in cyber and national security risks is contributing to the market's expansion.
Leading companies in the sovereign cloud market are introducing high-performance, scalable solutions such as telco-grade cloud platforms to meet the demands of modern enterprises. These platforms are designed for telecom operations, offering secure, low-latency, and highly reliable cloud infrastructure while supporting AI-driven processes. In August 2025, Xtelify Ltd., a wholly owned digital subsidiary of Bharti Airtel, launched Airtel Cloud, a sovereign, telco-grade platform engineered to ensure data sovereignty and scalable performance. Originally built to process up to 140 crore transactions per minute for Airtel's internal operations, the platform is now extended to businesses and telecom operators across India and other regions. Hosted on advanced sustainable data centers and powered by GenAI-based provisioning, it delivers infrastructure-as-a-service (IaaS), platform-as-a-service (PaaS), advanced connectivity solutions, real-time analytics, fraud and spam protection, AI-driven operations, and enhanced customer experience.
In November 2023, Broadcom Inc., a US-based technology company, acquired VMware Inc., a cloud computing and virtualization specialist. This acquisition aims to bolster Broadcom's position in infrastructure technology by enhancing VMware Cloud Foundation, enabling enterprises to modernize, secure, and build private and hybrid cloud environments. The deal also expands Broadcom's offerings with VMware Tanzu, advanced security solutions, load balancing services, and software-defined edge technologies.
Major players in the sovereign cloud market are Amazon.com Inc., Google LLC, Microsoft Corporation, Huawei Technologies Co. Ltd., International Business Machines Corporation, Cisco Systems Inc., Oracle Corporation, SAP SE, NTT DATA Corporation, Hewlett Packard Enterprise Company, Tata Consultancy Services Limited, Fujitsu Limited, Thales S.A., Atos SE, Workday Inc., T-Systems International GmbH, Rackspace Technology Inc., OVH Groupe SAS, CloudSigma AG, Clever Cloud SAS.
North America was the largest region in the sovereign cloud market in 2024. Asia-Pacific is expected to be the fastest-growing region in the forecast period. The regions covered in sovereign cloud report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East and Africa.
The countries covered in the sovereign cloud market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Canada, Italy, Spain.
The sovereign cloud market consists of revenues earned by entities by providing services such as data residency and sovereignty services, regulatory compliance services, secure cloud infrastructure, identity and access management and encryption services. The market value includes the value of related goods sold by the service provider or included within the service offering. The sovereign cloud market also consists of sales of virtual machines, compliance management tools, identity and access management (IAM) solutions, Security monitoring and auditing tools. Values in this market are 'factory gate' values, that is, the value of goods sold by the manufacturers or creators of the goods, whether to other entities (including downstream manufacturers, wholesalers, distributors, and retailers) or directly to end customers. The value of goods in this market includes related services sold by the creators of the goods.
The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD unless otherwise specified).
The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.
Sovereign Cloud Global Market Report 2025 from The Business Research Company provides strategists, marketers and senior management with the critical information they need to assess the market.
This report focuses on sovereign cloud market which is experiencing strong growth. The report gives a guide to the trends which will be shaping the market over the next ten years and beyond.
Where is the largest and fastest growing market for sovereign cloud ? How does the market relate to the overall economy, demography and other similar markets? What forces will shape the market going forward, including technological disruption, regulatory shifts, and changing consumer preferences? The sovereign cloud market global report from the Business Research Company answers all these questions and many more.
The report covers market characteristics, size and growth, segmentation, regional and country breakdowns, competitive landscape, market shares, trends and strategies for this market. It traces the market's historic and forecast market growth by geography.
The forecasts are made after considering the major factors currently impacting the market. These include the technological advancements such as AI and automation, Russia-Ukraine war, trade tariffs (government-imposed import/export duties), elevated inflation and interest rates.