Amazon launches its ‘sovereign’ cloud in Europe and plots expansion

Amazon launched its “sovereign cloud” offering in Europe on Thursday in a move designed to keep it among the leading players in the region even as more stringent regulations for tech giants are enforced.

The term sovereign cloud broadly relates to cloud computing services where the data is stored, handled and not moved out of a specific jurisdiction.

The European Union (EU) has pushed for companies operating in the bloc to be compliant with its various data and privacy regulations, as concerns have risen about the dominance of U.S. tech giants in the cloud space and potential access to European citizens’ data.

The Amazon Web Services (AWS) European Sovereign Cloud, based in Brandenburg, Germany, and first announced in 2023, is a new concept. Amazon said in a press release on Thursday that the cloud is “physically and logically separate” from other AWS regions. To do this, Amazon has created a new parent company for the sovereign cloud that will be locally controlled in the European Union (EU) and run by EU citizens.

Stéphane Israël will lead the AWS European Sovereign Cloud. Stefan Hoechbauer, who is vice president of AWS global sales for Germany and Europe Central, has been appointed as a managing director. AWS also announced five new members of an advisory board for the sovereign cloud, three of which are Amazon employees.

AWS said the sovereign cloud has “no critical dependencies on non-EU infrastructure” and it can continue to operate in the event of a communications disruption with the rest of the world. Under “extreme circumstances, authorised AWS employees of the AWS European Sovereign Cloud, who are EU residents, will have independent access to a replica of the source code needed to maintain the AWS European Sovereign Cloud services,” the company said.

For the past few years, European politicians and regulators have grown concerned about the dominance of U.S. tech firms over critical technology infrastructure. Despite the EU pushing for regional companies to grow their businesses, AWS, Microsoft and Google account for 70% of the cloud computing market in the region, according to Synergy Research Group.

Even as AWS pushes its sovereign cloud, European regulators are currently investigating cloud computing services from Amazon and Microsoft under the Digital Markets Act (DMA), which aims to curb the power of Big Tech.

In 2024, Amazon said it would invest 7.8 billion euros ($9.1 billion) in the AWS European Sovereign Cloud in Germany through 2040. On Thursday, Amazon said it would expand the AWS European Sovereign Cloud to Belgium, the Netherlands, and Portugal.