The dilemmas of digital sovereignty

In the digital economy, the free flow of data is a catalyst for innovation. For nations and regulated industries, it’s also a source of profound strategic risk. Constant data movement powers global business and communication, but it also presents a critical challenge: How do you maintain control, security, and jurisdictional legal compliance over data when it lives in a global cloud?

 

Many are turning to "sovereign cloud" as the definitive answer. The term conjures images of data locked down within a country’s physical borders. However, in our digitally connected (and increasingly AI-driven) world, the reality of achieving true digital sovereignty is far more complex and surprising than simple geography. What most people think sovereign cloud is, and what it actually entails, are two very different things.

 

 

It’s About Control, Not Just Location

The most common misconception about digital sovereignty is that it’s synonymous with data residency (the practice of keeping data physically located within a country’s borders). While location is a component, it’s not the core principle.

 

Sovereign cloud refers to a cloud environment designed to comply with legal, regulatory, security and data-residency requirements of a particular country or jurisdiction. This is a multi-faceted goal built on four core requirements: Data sovereignty (control over data processing and storage), operational sovereignty (control over the systems that manage the data), regulatory compliance (adherence to jurisdictional laws), and resilience (the ability to withstand disruption). There’s a fifth layer too, that is starting to emerge in compliance discourse: AI sovereignty (ownership and governance of models built upon a dataset).

 

Understanding these layered requirements shifts the focus from only the physical location of data servers to the more critical questions of who controls the data, who can access it, and under which legal framework it operates. This distinction is crucial for achieving genuine independence, as foreign access or control could undermine sovereignty even if the servers are located in-country.

 

 

This Isn’t an IT Trend; It’s a Geopolitical Strategy

The push for sovereign cloud isn’t a bottom-up initiative from IT departments; it’s a top-down mandate that is being driven by high-level national concerns. Governments are adopting sovereign cloud strategies primarily to retain control over their national data and services in an increasingly complex and competitive global landscape, where rising geopolitical tensions, regulatory fragmentation and concerns over foreign influences are forcing governments to rethink who controls their data, where it resides, and under which laws it ultimately falls

 

The drivers behind this imperative are explicitly strategic: Nations are seeking to protect their digital assets from foreign interference, and to assert control over their technological future. This is driving the imposition of national and pan-national data protection laws that compel organizations to demonstrate that data is handled according to jurisdictional rules. Localized controls such as these are seen as a way to strengthen a nation’s overall cybersecurity posture, as well as resilience against emerging geopolitically fuelled external threats.

 

For any organization operating internationally, navigating these drivers is no longer a compliance task; it is a core component of corporate risk management and geopolitical awareness.

 

 

The Complexity of AI

Some believe that this digital sovereignty challenge has been inevitable since the emergence of cloud and SaaS, but AI is adding a new layer of complexity to an already complicated puzzle just as the urgency grows. For AI, the question is not simply one of data storage and processing; it raises questions such as who owns and governs what a model has already learned? Looked at through this lens, the training location of these systems potentially becomes as important as the storage location, and we are already seeing governments explicitly deeming AI training pipelines to be part of the picture for data residency compliance.

 

AI is proving to be a complex forcing function for the way states and organizations think about digital sovereignty, and conversations will need to include not only the sovereignty of data handling, but also sovereign ownership and control of the value of these systems.

 

 

The Difficult Choice: More Control Can Mean Less Resilience

It’s important to recognize that achieving digital sovereignty isn’t a one-size-fits-all endeavor, because of the trade-offs and sacrifices that it requires. Usefully, along the path there are several architectural models that can be employed to achieve many of the goals of digital sovereignty, but stopping short of costs that an individual organization may deem unacceptable.

 

At the most extreme end is a completely self operated private cloud—an in-country or on-premises solution. This is the model that comes closest to providing data sovereignty, as well as operational sovereignty, but it should be noted that on-premises technologies may still be connected devices, calling back to overseas management consoles or accessed by global support personnel. The primary downside of this approach is that unless operational expenditures are increased exponentially, this model provides problematically low redundancy and resilience.

 

These economic and resiliency drawbacks are the reason why architectures such as policy control driven zone-based sovereign models, or national partner moderated cloud services can appeal.  These take advantage of the scale and geographic distribution of larger, non-sovereign cloud platforms, while achieving many of the most critical elements of data and operational sovereignty. However, for some, these architectures may still not go far enough in the control given to the customer. For instance, the customer is unlikely to have the contractual (or physical) ability to “pull the plug” on a service if they believe a foreign entity might be snooping. 

 

There’s an explicit choice here: Accept a higher operational risk in pursuit of absolute legal control, or embrace a more resilient architecture that necessitates a different, more sophisticated approach to proving compliance. The right answer will be different for different organizations.

 

 

Personal Decisions and Bespoke Tailoring

In recognition that—for most organizations and states—digital sovereignty is a spectrum of ideology and practicality, modern cloud service providers are starting to offer a range of service delivery models. Gone are the days of a single operating model or brittle architectures, and for a large organization the best approach usually involves a detailed discussion with their strategic vendors.  With growing regularity, these discussions often result in the creation of bespoke approaches for larger customers, designed to meet one organization’s needs and then marketed more widely because broader appetite quickly becomes apparent.

 

 

A New Blueprint for a Borderless World

Digital sovereignty is a nuanced and strategic imperative that extends far beyond simply choosing a data center’s location. It is a sophisticated balancing act between jurisdictional control, technical architecture, and geopolitical reality. Ultimately, organizations and their data governance teams will need to decide for themselves which sovereign features are non-negotiable, and what costs and trade-offs they are prepared to accept: And vendors will need to take seriously any requests for service innovation. The best outcomes will be driven by organizations and vendors partnering to meet these goals, and finding resolutions that minimise the negative impact of design constraints.

 

As our world becomes more interconnected, the central challenge remains: how will organizations and nations balance the need for global innovation with the non-negotiable demand for digital control? 

 

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Neil Thacker is Global Privacy and Data Protection Officer at Netskope

 

Main image courtesy of iStockPhoto.com and imaginima