Gartner: Governments are Main Buyers of Sovereign Cloud

Gartner reveals infrastructure as a service (IaaS) sovereign cloud spending by region, as China tops the list with more than three times the amount of spending than the second region on the list in 2025. 

In 2026, the proportion of spending by North America is predicted to overcome this ratio.

Sovereign cloud is designed to store data within specific geographic borders and ensure compliance with local laws and regulations.

It is tailored for industries like government and healthcare, as it meets high-security standards and ensures that confidential data for national security is not accessed by unauthorised third parties.

Unparalleled data security

Sovereign clouds’ ability to store data securely and locally makes governments their largest customers, with regions outside the US and China increasing their spending. It is why Gartner forecasts a total US$80bn in worldwide spending on this particular category, a 35.6% increase from 2025.

Rene Buest, Senior Director Analyst at Gartner, says: “As geopolitical tensions rise, organisations outside the US and China are investing more in sovereign cloud IaaS to gain digital and technological independence.

“The goal is to keep wealth generation within their own borders to strengthen the local economy.

“Governments will remain the main buyers to meet digital sovereignty needs, followed by regulated industries and critical infrastructure organisations, such as energy and utilities and telecommunications.”

Global spending growth

In 2026, China and North America are forecast to keep their top spots in IaaS spending, ranked by millions of US dollars Gartner estimates a region will spend. China has an estimated US$47bn of spending, while Gartner estimates US$16bn for North America.

In 2027, however, Gartner estimates Europe's spending will overcome that of North America's, with an 8.9% higher spending than the latter.

Regionally, Middle East and Africa, Asia/Pacific and Europe are projected to record the highest growth in sovereign cloud IaaS spending in 2026.

Geopatriation

Geopatriation has been identified by Gartner as a top 2026 trend - but what exactly is it?

This strategy by national leaders in data spending aims to shift data and applications from global public clouds to sovereign (local) alternatives.

The aim of the process is to protect sensitive data, such as government, healthcare or financial records from being accessed by foreign entities, making an effective cybersecurity measure in a heightened time for cyberattacks. 

Competition for large cloud providers

Many cloud customers are estimated to shift their spending from global to local cloud for increased security, acting on the geopatriation trend.

In fact, around 20% of current workloads across the globe are expected to make this change. Due to the shift in popularity, hyperscalers are facing mounting pressure. 

Rene notes: “To compete for local customers’ cloud business, large cloud providers must seriously acknowledge the sovereignty concerns and requirements per country, and act accordingly. 

“Solely treating digital sovereignty as a pure security, regulatory and compliance topic is not enough.”