Global sovereign cloud spend to increase 35.6% in 2026

Core Insights - There is a growing interest in localized cloud infrastructure as a service, pressuring hyperscalers to adapt to customer needs or risk losing market share [3] - Executives are increasingly concerned about data sovereignty requirements and geopolitical risks associated with global cloud environments, with 75% of business leaders expressing such concerns [3] Industry Trends - Organizations are expected to shift 20% of existing workloads from global public clouds to local providers, driven by an increase in sovereign cloud spending [4] - Governments will be the primary buyers of localized infrastructure, along with regulated industries and critical infrastructure providers [4] Competitive Landscape - Major cloud providers must address sovereignty concerns and requirements specific to each country to compete effectively for local cloud business [5] - Tech giants are responding with sovereign cloud offerings, such as AWS's European Sovereign Cloud and IBM's Sovereign Core platform [6] Market Projections - Global sovereign cloud spending is projected to increase by 35.6% to reach $80 billion by 2026, influenced by geopolitical tensions and the desire for data control [7] - China and North America are expected to lead in sovereign cloud spending, with forecasts of approximately $47 billion and $16 billion respectively by 2026 [7] - The highest growth in sovereign cloud spending is anticipated in the Middle East, Africa, Europe, and mature countries in the Asia-Pacific region this year [7]