European enterprises are rapidly adopting sovereign cloud solutions to meet stringent regulations, mitigate geopolitical risks, and ensure data sovereignty and transparency, according to the 2025 ISG Provider Lens® Multi Public Cloud Services report for Europe. The report, published by Information Services Group (ISG), highlights a strategic shift in how organizations view sovereign cloud—from a compliance-focused tool to essential infrastructure for critical workloads. Driven by regulatory enforcement, heightened security concerns, and the rise of AI adoption, companies across Europe are prioritizing resilient, transparent, and locally governed cloud platforms. This transformation is reshaping the cloud provider landscape, with both regional vendors and localized offerings from global hyperscalers gaining traction. Matthias Paletta, director at ISG, noted that sovereign cloud is now being treated as core infrastructure. Enterprises are demanding multizone infrastructure based in the EU, customer-managed encryption keys, policy-driven services for secure DevOps, and robust disaster recovery capabilities. Transparency in pricing—particularly around capacity commitments, infrastructure usage, and long-term costs—is increasingly important, especially for public sector organizations. The surge in AI adoption is fueling demand for sovereign AI infrastructure to support training, inference, and deployment within EU jurisdiction. Providers are responding by integrating zero-trust architectures, automated compliance tools, and real-time threat detection into their offerings to reduce risks from insider threats and foreign surveillance. To enhance security, enterprises are deploying air-gapped environments, external key management systems, and confidential computing technologies. Procurement teams are also favoring European-owned cloud providers to strengthen governance control, minimize legal exposure, and achieve operational independence from non-EU entities. Organizations are evaluating sovereign cloud providers based on data control, governance models, and alignment with national regulatory requirements. Global providers are investing heavily in Europe, establishing locally governed operations to meet EU standards. Meanwhile, regional providers are expanding their infrastructure to serve regulated sectors and public institutions across major European markets. Meenakshi Srivastava, lead analyst at ISG, emphasized that sovereign cloud is becoming deeply embedded in enterprise IT strategies. While regulatory and risk factors currently drive adoption, future expectations will include features like open-source interoperability and sustainability compliance. The report also identifies broader trends, including increased use of advanced encryption, compliance automation, and the emergence of sovereign cloud marketplaces that enable flexible deployment across Europe. In its evaluation, ISG named AWS, Deutsche Telekom/T-Systems, Google, Microsoft, Oracle, Orange Business, and OVHcloud as Leaders in the Sovereign Cloud Infrastructure Services quadrant for Europe. LTIMindtree was recognized as the global ISG CX Star Performer for 2025 among multi public cloud service providers, based on top customer satisfaction scores from ISG’s Voice of the Customer survey. Customized versions of the report are available from AWS, Deutsche Telekom/T-Systems, and Orange Business. The full report is accessible to subscribers or for individual purchase online. ISG Provider Lens® research combines data-driven analysis with insights from ISG’s global advisory team, offering enterprises valuable guidance in selecting cloud providers. The series covers markets worldwide, including the U.S., Canada, Brazil, the U.K., France, Germany, the Nordics, Australia, and Singapore/Malaysia, with additional regions planned. ISG (Nasdaq: III) is a global technology research and advisory firm with over 900 clients, including 75 of the world’s top 100 enterprises. Founded in 2006, the firm leverages AI, proprietary data, and a team of 1,600 professionals to help organizations achieve operational excellence and accelerated growth.