Alex Galbraith, CTO, Cloud Services at SoftwareOne

Digital sovereignty: What it is - and why it matters to your business in 2026

19 March 2026

Digital sovereignty is becoming a strategic priority in 2026 as increasing global regulations force organisations to take greater control over their data, infrastructure and technology to ensure compliance, security and operational independence. According to Alex Galbraith of SoftwareOne, organisations that embed strong sovereignty practices can turn regulatory pressure into competitive advantage by enhancing trust, resilience and future-readiness in areas such as AI and cybersecurity

By Alex Galbraith, CTO, Cloud Services at SoftwareOne

The sovereignty imperative

When the European Court of Justice invalidated the EU-US Privacy Shield in 2020, thousands of businesses scrambled to ensure compliant data transfers. That moment crystallised why digital sovereignty matters.

Fast forward to 2026, and what may have seemed like a one-time disruption back then has become a steady drumbeat of regulatory change today in jurisdictions across the world. There is a steady stream of new requirements forcing organisations to fundamentally rethink how they control their digital operations. Each new regulation adds layers of complexity to data residency, access controls, and operational independence that organisations must add to their “to-do” list.

The regulatory backdrop

Major regulations have transformed digital sovereignty from niche concern to Boardroom priority across the globe. NIS2 became enforceable in October 2024. DORA took effect in January 2025. The EU Data Act became legally enforceable in September 2025. Brazil’s LGPD and the U.S. CMMC 2.0 extend compliance obligations beyond Europe, demanding rigorous data and security controls. Each brings specific requirements and serious penalties for non-compliance.

The market has responded to these pressures. 44% of organisations are actively considering sovereign cloud solutions. 48% of technology buyers expect their use of sovereign cloud for AI workloads to increase over the next two years. (IDC)

Against this backdrop, it’s time to understand this topic in depth and consider the upside too. Because digital sovereignty isn't just about regulatory compliance: it's also about competitive advantage.

What is digital sovereignty?

Digital sovereignty is an organisation's ability to maintain control over its digital assets, infrastructure, and data. It extends beyond ownership to encompass the capacity to govern and manage digital resources independently. This includes full authority over where and how data is stored and processed, independence in technological development, and enforcement of local laws.

The core principle: digital sovereignty empowers organisations to make autonomous decisions about their digital operations, free from external pressures or dependencies. Three interconnected categories (data sovereignty, infrastructure sovereignty, technology sovereignty) define digital sovereignty in practise:

Category	Key Aspects	Examples
Data Sovereignty	Control over data location, access, processing	EU Data Act, LGPD (Brazil) & CMMC 2.0 (USA). AWS EUSC data residency guarantees.
Infrastructure Sovereignty	Physical location and control of computing resources, Independent operation without foreign dependencies, Resilience against supply chain disruptions	AWS EUSC Brandenburg region, dedicated EU security operations
Technology Sovereignty	Ability to develop and deploy technology independently, Reduced vendor lock-in and increased switching capability, Control over encryption keys and security protocols	EU-based certificate authorities, post-quantum cryptography readiness

Understanding these three components is crucial because digital sovereignty requires addressing all three simultaneously. Why? Because data, infrastructure, and technology sovereignty work together to secure comprehensive control over your organisation's entire corpus of digital assets.

Why digital sovereignty matters NOW

Six years ago, digital sovereignty was something you might plan for. Today, it's something you must execute on for at least four very good reasons:

Security and compliance: The regulatory triple threat

Here’s a closer look at those key regulations I mentioned earlier.

NIS2 entered into force in January 2023 with an application deadline in October 2024, covering 18 critical sectors and introducing personal liability for management. The directive mandates comprehensive risk management and incident reporting, though implementation across member states remains uneven.

DORA entered into force in 2023 with an application deadline from January 2025, applying directly to over 20 types of financial entities. As a regulation, it's immediately binding across all EU member states. DORA establishes five pillars: ICT risk management, incident reporting, resilience testing, third-party risk management, and information sharing.

The EU Data Act was adopted in 2023 and entered into application in September 2025, with a phased rollout through 2027. It changes who controls data from connected devices and establishes new cloud service switching requirements. Violations carry GDPR-level fines of up to €20 million or 4% of global turnover.

Lei Geral de Proteção de Dados (LGPD) entered into force in 2020 , applying to any organisation processing personal data in Brazil. As a comprehensive law, it sets strict obligations on consent, transparency, and security. LGPD establishes key principles: purpose limitation, accountability, and user rights.

Cybersecurity Maturity Model Certification (CMMC) 2.0 was introduced in 2021 with rollout from November 2025, applying across the US defence industrial base. As a DoD acquisition rule, it is binding on all contracts. CMMC 2.0 focuses on cybersecurity practises, assessment requirements, and continuous compliance for protecting sensitive government information.

2. Operational autonomy: Control without compromise

Digital sovereignty enhances an organisation's ability to weather global disruptions and technological challenges. By reducing dependence on imported technologies and services, companies can maintain critical operations even when international supply chains or services face compromise.

But operational autonomy isn't about isolation - it's about having choices. Sovereign cloud architectures give organisations control over where data lives and how it's processed while still providing access to the full power of cloud innovation.

3. Competitive advantage: From compliance burden to market differentiator

Organisations that view sovereignty purely as a compliance burden miss a significant opportunity. Strong digital sovereignty positions are becoming differentiators in competitive situations. When responding to RFPs, demonstrating robust data residency, access controls, and operational independence can be the deciding factor.

Customer trust translates directly to business value. Being able to tell customers exactly where their data is stored, who can access it, and how it's protected creates a powerful trust advantage.

4. Future-readiness: AI regulations and quantum threats

Digital sovereignty in 2026 positions an organisation for tomorrow's challenges, not just today's requirements.

AI regulations continue to evolve with sovereignty implications. The EU AI Act requires high-risk AI systems to demonstrate control over training data, model deployment, and AI system governance. Organisations with strong data sovereignty foundations adapt faster because they already have the data governance, access controls, and audit capabilities in place.

Quantum computing represents a fundamental threat to current encryption. While quantum computers capable of breaking current cryptography remain years away, data encrypted today could be harvested now and decrypted later. It’s a threat known as "harvest now, decrypt later" and concrete proof that sovereign key management has never been more important.

Who needs digital sovereignty most?

For these reasons, digital sovereignty has implications across virtually every industry. But three sectors in particular face the most urgent requirements and highest stakes.

Government and public sector

NIS2 explicitly covers public administration entities at central and regional levels. Government organisations handle highly sensitive data - from citizen records and national security information to critical infrastructure control systems.

For government IT leaders, digital sovereignty isn't optional. Penalties extend beyond financial fines to include personal liability for management. Breaches can compromise national security and citizen trust.

Healthcare organisations

Healthcare combines the sensitivity of personal medical data with operational systems that directly impact patient care. When medical records systems experience downtime or breaches, patient care suffers directly.

Digital sovereignty in healthcare means ensuring patient data remains in appropriate jurisdictions, maintaining operational control over critical medical systems, and building resilience against cyberattacks. Patient trust is fundamental to the care relationship.

Financial services

DORA makes financial services the most heavily regulated sector for digital operational resilience. Banks, insurance companies, investment firms, and more than 20 other financial entity types must comply with comprehensive ICT risk management, incident reporting, resilience testing, and third-party risk management requirements.

Digital sovereignty for financial services means demonstrating control over data residency, establishing robust access controls and encryption, maintaining operational independence from critical third-party providers, and building resilience against both cyberattacks and operational disruptions.

The solution: AWS European Sovereign Cloud and SoftwareOne

Moving from understanding digital sovereignty to implementing it requires both the right technology foundation and the right implementation partner.

With the AWS European Sovereign Cloud that launched in January 2026 in Germany, organisations have access to a new level of sovereignty controls backed by AWS's €7.8 billion investment through 2040.

The AWS European Sovereign Cloud operates as a physically and logically separate infrastructure from other AWS regions. Everything needed to operate the cloud is in the EU - the talent, technology, infrastructure, and leadership.

Key features include independent governance with an EU-based parent company, EU citizen-only operations staff, a dedicated European Security Operations Centre, and a European Trust Service Provider. The service portfolio includes AI services such as Amazon Bedrock and Amazon Q, along with compute, containers, databases, networking, and security.

In December 2024, SoftwareOne was named as an official launch partner for the AWS Digital Sovereignty Competency. This certification recognised our expertise in helping clients move sensitive workloads to the cloud safely while addressing digital sovereignty requirements.

We support clients through comprehensive AWS Landing Zones and Cloud Managed Services with 24/7 support, cost optimisation, and robust security measures. Through our integration with Crayon, we now have a presence in more than 70 countries which means we understand both global architectural patterns and the specific regulatory nuances of your particular market.

Your 2026 digital sovereignty action plan

Following this review of the topic, I’d recommend that every organisation evaluate their current digital sovereignty posture and build an action plan for 2026 and beyond. I hope this at-a-glance guide provides a useful template. Talk to us and let’s turn your initial thoughts into a realistic roadmap.

Focus Area	Actions	Potential Timeline	SoftwareOne Support
Regulation and Compliance	Identify sovereignty champions; conduct regular compliance audits; map requirements across NIS2, DORA, and EU Data Act; prepare for emerging AI sovereignty regulations	Establish baseline; ongoing monitoring	Regulatory landscape assessment; compliance roadmap development; audit support
Data Governance	Implement data classification; establish data protection measures; create transparency in data processing; deploy sovereign key management; begin post-quantum cryptography assessment	Initial framework; ongoing refinement	Data classification tooling; encryption architecture design; key management strategy; quantum readiness assessment
Digital Infrastructure	Assess current architecture for sovereignty gaps; design or migrate to sovereign cloud architecture (AWS EUSC); implement business continuity and disaster recovery; establish cryptographic agility roadmap	Major migration projects; ongoing optimisation	AWS Landing Zone design and deployment; AWS EUSC migration services; managed cloud operations
Innovation and Optimisation	Balance investment in sovereignty with innovation capabilities; leverage AI for data governance automation; build competitive advantages from sovereignty posture; integrate sovereignty into AI/ML strategy	Ongoing throughout 2026 - integrate into all technology decisions	Cost optimisation analysis; AI tooling implementation; strategic advisory on competitive positioning

Ends.

About SoftwareOne

SoftwareOne is a global software and cloud solutions provider and distributor. With a presence in over 70 countries and a team of about 13,000 professionals, we combine global scale and local expertise to help partners and customers optimise costs, source and procure, accelerate growth, and navigate complex IT environments with confidence. Leveraging deep capabilities in cloud, software, and data and AI, the company empowers organisations to modernise, innovate, and unlock the full value of their technology investments. Headquartered in Switzerland, SoftwareOne is listed on the SIX Swiss Exchange and Euronext Oslo Børs under the ticker symbol SWON.

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