Dive Brief:
- SAP will invest more than 20 billion euros ($23.3 billion) to build out its sovereign cloud offerings in Europe, the company said Tuesday. SAP Sovereign Cloud, which restricts the flow of data to a specific region or jurisdiction, is currently available in multiple European Union countries.
- The expansion will give customers access to the ERP giant’s software suite via infrastructure services run in SAP cloud facilities throughout Europe and in Delos Cloud data centers in Germany, as well through on-premises, private cloud deployments, according to the announcement.
- SAP Sovereign Cloud On-Site is available in locations outside of Europe except for the U.S., where the company is working with its independent SAP National Security subsidiary to deploy the private cloud offering, the company said in an email.
Dive Insight:
SAP’s investments in data centers and on-prem infrastructure follows an industrywide push to stand up sovereign cloud alternatives. Momentum is particularly strong in Europe, where the European Union’s AI Act will add data privacy compliance requirements to existing General Protection Data Act oversight for most organizations next year.
“The debate on digital sovereignty and the best way to achieve it has picked up speed in recent weeks,” SAP CEO Christian Klein said in July, during the company’s Q2 2025 earnings call. “SAP stands out as the only vendor that can offer sovereignty over the entire stack from the infrastructure to the application.”
In July, Amazon announced plans to launch AWS European Sovereign Cloud later this year. Microsoft expanded its European sovereign cloud program in June, adding stronger security and local configuration capabilities, and Google Cloud leaned on its Mandiant division to beef up cyber defenses in its growing network of sovereign cloud alternatives to standard public cloud services.
Generative AI adoption has raised the security stakes, as enterprises assume the risks associated with exposing proprietary data to large language models in the cloud. Broadcom touted hardware upgrades in the VMware Private AI Foundations with Nvidia integration last week during the VMware Explore event in Las Vegas as part of the company’s ongoing efforts to convert existing customers to the VMware Cloud Foundation private cloud bundle.
“Our customers want the freedom to innovate with AI while continuing to rely on the enterprise platforms they trust," Paul Turner, VP of products in Broadcom’s VCF Division, said in the announcement.
Oracle is also banking on private cloud adoption to spur revenue growth. Improvements to on-prem platforms have made it easier for enterprises to access public cloud services without sacrificing data sovereignty, Oracle Chairman and CTO Larry Ellison said during a September 2024 earnings call.
SAP’s sovereign and private cloud options include access to the provider’s modular suite of finance, supply chain, customer relations and human resources applications, as well as its Business Data Platform and AI capabilities.
