Digital sovereignty is high on the agenda for government IT leaders right now. And for good reason. But we hear less about what this means in the private sector.
This is a mistake. The underlying pressures, from AI and cyber threats to vendor lock-in, regulation, and resilience, are not unique to government.
To understand this better, we can start by thinking about some of the basic questions.
What does it actually mean to be digitally sovereign?
Digital sovereignty is all about who controls systems. Usually, the part of this that gets the most attention is ‘data residency’. That is, how and where data is stored. While important, true control, and therefore sovereignty, is about a lot more than where our data lives.
In the context of escalating cyber threats, political uncertainty, and the rise of AI, a growing number of organizations, especially governments, are deciding that over-dependence on external actors is a big risk, especially when something goes wrong. So instead, digital sovereignty means striving for independence in terms of both retaining control over systems and maintaining access to services. This draws on technical, legal, and operational tools and strategies.
However, there isn’t one set of criteria to measure digital sovereignty. Really, you can never be 100% sovereign without building your own chips and servers. Instead, what’s important is often what’s an acceptable level of control over systems in a given situation. So, while there are specific practical steps we can take, it’s also worth thinking about digital sovereignty as an aspiration or a set of ways of working, rather than a model we can simply lift and implement.
Why are governments prioritizing digital sovereignty?
We already hinted at some of the high-level issues at play here. But there’s a more interesting question waiting in the wings. That is, why are some governments prioritizing digital sovereignty? And leading on from that, why now?
To answer this, we can drill deeper into some of those pressures we saw earlier.
In some ways, the rise of AI is the easiest to get our heads around. Ten years ago, one of the biggest topics in government tech was cloud transformation. A lot of the big regulatory challenges here revolved around data residency. AI complicates this, though. In AI-powered systems, the surrounding business context, such as workflows, policies, user intent, and decision logic, matters just as much as the data itself. On top of this, LLMs are a new layer of services to share information with. But it’s often hard to know where this is going or how it’s being used. Naturally, this is a big problem for the public sector, as well as one of the major factors that has moved the conversation from just data residency towards digital sovereignty.
Market pressures are easy enough to understand, too. Software, like anything else, goes up in price. But this also poses some unique challenges. When software gets embedded in operations, replacing it can be a very expensive process. So, to some extent, digital sovereignty is also a continuation of the age-old need to avoid vendor lock-in.
Political pressures are more complicated. Many conversations here revolve around big geopolitical issues. While these are obviously important, they aren’t the whole story. Compliance is a huge factor, too. Regulations are different in different markets, but big tech companies operate across borders. For software vendors, it’s not always possible to offer off-the-shelf compliance for every set of regulations. The more regulations diverge and evolve, the more software buyers are incentivized to prioritize control.
Why should the private sector care about digital sovereignty?
Today, most conversations around digital sovereignty revolve around the public sector. But the thing is, none of the pressures that we just discussed are unique to government orgs.
In some ways, the bigger difference here is the language that’s used.
If you’re a technology manager in a large enterprise, the chances are that the type of control and resilience we’ve been describing are also top priorities, at least for certain mission-critical processes and systems. There’s good evidence of this from the real world too. According to research by Suse, 98% of enterprises see digital sovereignty as a priority, but only around half are actually taking action.
Cyber threats are growing
Ever-evolving cyber threats are a crucial driver of organizations prioritizing control, resilience, and risk management across their software stacks. Often, this means cloud-based SaaS tools aren’t suitable for managing sensitive or mission-critical processes.
Just like in the public sector, AI both accelerates and complicates this. On the one hand, there’s huge pressure to adopt AI within workflows, given its transformative potential. On the other hand, you can’t do this at the expense of your wider information security strategy. Many enterprises are determining that digital sovereignty is the right lens to look at this problem through.
Interactions with the public sector
The public and private sectors aren’t vacuum-sealed from one another. Public sector contracts are a highly lucrative part of many enterprise business models. Therefore, digital sovereignty becomes a priority for private companies because it’s a priority for their customers.
Similarly, enterprises have to operate within environments that are shaped by governments and the relationship between the private and public sectors. For example, the Dutch government recently blocked the acquisition of a cloud provider that hosts their digital identity platform by a US company.
Tech regulation is really complicated
Additionally, digital sovereignty is high on the agenda for many enterprise tech leaders as a compliance-driven issue. The key thing here is that tech regulation, whether at the government level or within individual organizations, is very, very complicated. This is particularly tough for large enterprises because they need to contend with their own internal policies, policies within partner or stakeholder organizations, and regulations in whichever markets they operate.
For many teams with more complex regulatory requirements, off-the-shelf solutions that meet these specific requirements may not exist for a given use case or process. Additionally, regulatory requirements can change, and many teams prioritize the ability to manage this themselves, rather than relying on external SaaS vendors to handle it.
Practical takeaways
Finally, it’s no use talking about why digital sovereignty matters to private-sector orgs without also understanding the tools and strategies that are available for actually implementing this.
Part of the challenge here is that there isn’t a single agreed-upon set of standards we can adopt. While some organizations, including the European Commission, have criteria in place for measuring digital sovereignty, in the real world, it’s often more important to think about whether you have an acceptable level of control and independence for specific processes, use cases, or organizations.
So, what are the levers we can pull to dial this up or down in different scenarios?
Some of the key issues to prioritize include:
- Open-source software - Many teams prioritize tools where they can inspect the source code and deploy to their own infrastructure.
- Self-hosting and private cloud - Running key workloads in environments the organization controls, especially for sensitive or regulated processes.
- Sovereign cloud services - Using providers and regions that align infrastructure, data, and operations with local requirements.
- Data portability - Ensuring data can be exported, backed up, and migrated in usable formats when needed.
- Open standards and APIs - Choosing interoperable tools that are easier to integrate, replace, or adapt over time.
- Vendor exit planning - Understanding how you would leave a provider before dependency becomes a serious operational risk.
- Access controls and encryption - Limiting who can access sensitive systems and data, and maintaining stronger oversight of usage.
- Internal technical capability - Building enough in-house expertise to manage, adapt, and recover critical systems without total reliance on vendors.
- Supply chain transparency - Assessing the dependencies, subcontractors, and third-party components behind the tools the organization relies on.
Notably, this involves a combination of technical, operational, legal, and other techniques, further highlighting that digital sovereignty, whether in the private or public sector, is not simply a technological problem to be solved.