Technological Sovereignty: Why Local Solutions Are Winning

For companies and public institutions in Europe, technological sovereignty is increasingly becoming an important strategic issue. This does not mean developing every technology in-house or using exclusively European products. Rather, it is about the ability to operate digital systems independently, to switch providers and technologies, and to retain control over data, infrastructure, and critical processes.

In this context, local and European solutions are gaining importance. European cloud providers, open-source technologies, sovereign data centers, and independently operable AI solutions can help companies reduce dependencies and secure their digital autonomy in the long term.

But what exactly does technological sovereignty mean? Why is it so important right now? And what role do the cloud, Kubernetes, open source, and artificial intelligence play in this?

What does technological sovereignty mean?

Technological sovereignty refers to the ability of companies, organizations, or nations to use, control, and further develop digital technologies autonomously and independently.

Technological sovereignty encompasses various levels:

• Data Sovereignty: Who owns and controls the data?
• Infrastructure sovereignty: Where are applications and data hosted?
• Software sovereignty: What software is used, and who controls its development?
• Vendor sovereignty: How dependent is a company on a single vendor?
• Operational sovereignty: Can an organization operate its own systems or switch providers?
• Technological Freedom of Choice: Can alternative technologies be used?
• Legal sovereignty: What legal and regulatory frameworks govern data and services?

A technologically sovereign strategy, therefore, does not necessarily mean operating everything in-house.

The crucial question is rather: Can a company maintain control over its digital infrastructure in the long term and act independently when necessary?

This is precisely where true technological sovereignty differs from mere location-based arguments.

Why Technological Sovereignty Is Becoming More Important for Europe

Europe has a strong industrial base, a large single market, and extensive technological expertise. At the same time, the digital economy is heavily dependent in many areas on companies headquartered outside Europe.

This applies, for example, to:

• Cloud Platforms
• Operating systems
• Central Software Platforms
• AI models and AI infrastructure
• Hardware and chips
• Digital communication platforms
• SaaS applications
• Developer and platform ecosystems

These dependencies do not necessarily have to be problematic. Global providers can offer high-performance, scalable, and cost-effective solutions. However, problems arise when an organization no longer has a realistic alternative.

Switching providers can then be extremely complex from a technical standpoint. Data may be difficult to migrate. Applications depend on proprietary interfaces. Workloads rely on specialized platform services. At the same time, prices, terms of use, or the regulatory framework may change. Technological sovereignty therefore relies on freedom of choice rather than dependence.

Why Dependence on Hyperscalers Becomes a Risk

The major cloud platforms are undoubtedly impressive from a technical standpoint. They are mature, scale effortlessly, and offer a range of features that hardly anyone can match. But it is precisely this convenience that can become a trap, because the deeper you delve into their ecosystem, the more expensive and complicated the way back becomes.

The biggest problem lies not in the technology, but in the law: the legal gray area between the Cloud Act and the GDPR. The U.S. Cloud Act requires American companies to hand over data to U.S. authorities—even if that data is stored in a European data center. At the same time, the GDPR requires that personal data be protected and not disclosed without a legal basis.

These two sets of regulations contradict each other, and as an operator, you’re caught right in the middle. While there are contractual arrangements and data protection frameworks designed to close this gap, they don’t always hold up in court, as the overturned Privacy Shield has shown. Those who opt for a local solution avoid this dilemma from the outset, since the question of disclosure to foreign authorities never even arises.

Vendor Lock-in: When Switching Becomes a Problem

A key concept in the context of technological sovereignty is “vendor lock-in.” This refers to a strong dependence on a single provider. The more closely applications, data, and processes are tied to that provider’s technologies, the more difficult it becomes to switch.

Here’s a simple example: A company runs an application in the cloud. At first, it uses only virtual machines and storage. Switching to another provider later on is relatively easy.

Over time, however, additional proprietary services are added:

• Managed Databases
• Proprietary messaging systems
• Specialized monitoring services
• Serverless functions
• Custom IAM solutions
• Proprietary data formats
• Specialized AI APIs

The app works great—but only within this ecosystem. This increases technological lock-in.

The crucial question, therefore, is not, “Which provider is the cheapest today?” but rather, “How dependent will we become on this provider over the next five or ten years?”

Local solutions do not automatically mean less innovation

When it comes to technological sovereignty, a false dichotomy often arises: global is innovative, local is slow. It’s not that simple. European and local providers can leverage state-of-the-art technologies while placing a stronger focus on regional requirements. Especially in the cloud-native environment, many technologies are based on global open-source projects anyway.

Examples of how technological openness and regional control can be combined include Kubernetes, OpenStack, OpenTelemetry, Prometheus, Grafana, PostgreSQL, and many cloud-native tools.

The key point is:

• Who operates them?
• Where is the data stored?
• Who has access?
• What dependencies exist?
• Which interfaces are used?
• Can the solution be migrated?
• How transparent is the technology?

This makes open source a key component of technological sovereignty.

Open Source as the Foundation of Digital Sovereignty

Open source offers companies a decisive advantage: The source code is generally accessible, and the technology is not tied to a single vendor. However, this does not mean that every open-source solution is operated independently. For example, open-source software can also run on proprietary infrastructure.

Nevertheless, open source creates important prerequisites for independence.

1. Transparency: The source code can be analyzed and reviewed. Companies are therefore not required to rely on a vendor’s claims.
2. Freedom of choice: Open-source technologies can be operated by different service providers or on a company’s own infrastructure.
3. Avoiding proprietary dependencies: Open technologies reduce the risk that an application will be completely tied to a specific provider.
4. Long-term usability: Even if a provider changes or discontinues its service, the underlying software may still be available.
5. Community and ecosystem: Large open-source projects are often further developed by an international community and numerous companies.

For Europe in particular, this combination of open technologies and locally controlled infrastructure can be a significant competitive advantage.

Sovereign Cloud: More Than Just a Data Center in Europe

When it comes to technological sovereignty, the location of data centers is usually the first topic of discussion. While this is important, it is not sufficient. After all, a cloud infrastructure can be physically located in Europe yet still exhibit significant dependencies on non-European technologies or companies. A sovereign cloud must therefore take multiple dimensions into account.

• Data Location: Where is data stored and processed?
• Data Access: Who has access to the data—both technically and administratively?
• Operator: Who operates the infrastructure?
• Legal Framework: What legal requirements does the provider have to comply with?
• Technology: What software and hardware form the foundation?
• Migration: Can workloads be moved to another provider if necessary?
• Transparency: Are the architecture, processes, and security mechanisms transparent?

Technological sovereignty thus arises from the interplay of infrastructure, technology, operations, and governance.

Kubernetes and Cloud Native as a Path to Greater Independence

Cloud-native technologies can help companies reduce their dependencies. A good example of this is Kubernetes. It provides a standardized platform for running containerized applications. Companies can deploy Kubernetes in a variety of environments.

• in its own data center
• with a European cloud provider
• with a hyperscaler
• in hybrid cloud environments

This allows an application to be more decoupled from the underlying infrastructure. However, this does not mean that Kubernetes automatically prevents vendor lock-in. For example, if you use numerous proprietary cloud services, you can still be heavily tied to a single provider even with Kubernetes. That’s why cloud-native should always be paired with a deliberate architectural strategy. Open standards, portable workloads, and clearly defined interfaces can help reduce dependence on individual platforms.

Multi-cloud does not automatically mean independence

Another common assumption is: “If we use two cloud providers, we’re independent.” However, this isn’t automatically true. While multi-cloud can reduce dependencies, it also introduces additional complexity.

Among other things, companies must consider the following:

• Different APIs
• different security models
• various monitoring systems
• different network architectures
• Different billing models
• Data transfer between clouds
• Additional operational overhead

What matters, therefore, is not the number of cloud providers, but the portability of one’s own systems. A well-planned cloud-native setup can help ensure flexible movement of workloads.

Technological Sovereignty and Artificial Intelligence

The importance of technological sovereignty is currently particularly evident when it comes to artificial intelligence. Companies no longer want to use AI merely on an experimental basis, but rather to integrate it into productive processes. As a result, corporate data—some of which is highly sensitive—ends up in AI systems. The central question, therefore, is: Where is this data processed, and who controls the models and systems used?

A sovereign AI strategy can combine different approaches.

These include, for example:

• AI models operated or controlled in-house
• European AI infrastructure
• In-house GPUs
• local vector databases
• private RAG systems
• In-house identity and access management solutions
• Open interfaces

RAG (Retrieval-Augmented Generation) systems, in particular, demonstrate how companies can integrate AI with their own data without having to upload all their information to an external platform.

Why Custom AI Solutions Are Gaining Importance

Standardized AI platforms make sense for many use cases. They enable a quick start and offer a wide range of features. For certain companies, however, standard solutions are not sufficient.

For example, custom AI solutions can be beneficial when:

• sensitive internal data is processed
• there are specific compliance requirements
• a proprietary IAM system is to be integrated
• Data must remain in specific regions
• in-house knowledge bases need to be integrated
• AI workflows need to be customized and automated
• various models need to be combined

Such an architecture could, for example, consist of a proprietary knowledge system, a vector database, a RAG workflow, an IAM, and various LLMs. This results in an AI infrastructure that is more closely aligned with the company’s needs.

Data Sovereignty: Data Remains Under Control

Data is among the most important strategic factors for modern companies. An organization’s most valuable resources often include customer data, production information, research data, trade secrets, and internal documents. Therefore, the question of where data is stored must not be considered in isolation.

Companies should ask themselves the following questions, for example:

• Where is data stored?
• Where are backups stored?
• Who can be granted administrator access?
• How is data encrypted?
• Which systems access it?
• How long is data retained?
• Can data be exported in its entirety?
• How does data deletion work?
• Which third-party service providers are involved?

A well-defined IT strategy creates transparency in this area.

Local Providers as Strategic Partners

Technological autonomy does not mean that companies have to build their entire infrastructure themselves. On the contrary: Managed services, in particular, can help companies operate complex technologies professionally.

A European managed services or cloud provider, for example, can take on the following tasks:

• Operating Kubernetes Clusters
• Monitoring and Observability
• Backup and Recovery
• Patch Management
• Security
• Scaling
• Database Operations
• Cloud Infrastructure
• Storage
• Support

The key difference lies in who retains control over the platform and the data, and how open the technology used is. A managed service can therefore certainly be part of a sovereignty strategy. Responsibility for operations is outsourced without losing strategic control.

Security as a Component of Technological Sovereignty

Technological sovereignty and IT security are closely intertwined. The better companies understand and control their infrastructure, the easier it is for them to implement security requirements.

These include, for example:

• Access Control: Administrative access should be clearly defined and traceable.
• Encryption: Data should be protected both during transmission and while in storage.
• Monitoring: Anomalies and security incidents must be detected as early as possible.
• Backup and Recovery: Backups should not only be in place but also tested regularly.
• Patch Management: Security updates must be applied reliably and in a timely manner.
• Network Segmentation: Systems and services should not be able to communicate directly with one another unnecessarily.

Technological sovereignty is no substitute for a security strategy, but it can serve as an important foundation for one.

The economic factor: Sovereignty is also risk management

Technological sovereignty is usually viewed as a political or regulatory issue. For companies, however, it is also an economic issue. Heavy reliance on a single provider can entail long-term risks.

For example:

• Price risk: Prices or billing models may change.
• Availability risk: Outages of a central service can disrupt numerous business processes.
• Migration risk: Switching providers at a later date can be costly and technically complex.
• Regulatory risk: New legal requirements may affect existing structures.
• Innovation risk: Companies may be dependent on which technologies a provider develops or supports.

A sovereign architecture can reduce these risks. However, this does not mean that companies must become completely independent. Rather, the goal is to identify critical dependencies and manage them proactively.

Technological Sovereignty and Compliance

Regulatory requirements are also playing an increasingly important role. Today, companies must comply with numerous regulations regarding data protection, information security, resilience, and the use of digital technologies. In this context, issues related to data locations, access, and service providers are becoming increasingly significant. A sovereign infrastructure can help ensure that these requirements are implemented in a way that is more transparent and controllable. However, it is important to note that sovereignty is neither a certificate nor a single technical feature. Even a European provider does not automatically guarantee complete sovereignty. Companies should therefore consider their entire supply chain.

What role do European data centers play?

Data centers form the physical foundation of digital infrastructure. European data centers can be particularly relevant when companies have specific requirements regarding a data location (e.g., data protection, availability, physical security, power supply, compliance, or operational processes). In addition, sustainability is also playing an increasingly important role. Modern data centers must be high-performance, secure, and operated as efficiently as possible. This brings together several strategic goals: sovereignty, security, sustainability, and efficiency.

Why local solutions shouldn’t just be “local”

The term “local solution” can be misleading. It is not about geographically isolating technology. A modern European IT strategy can certainly make use of international open-source projects, global hardware, and international developer communities. The key point is who ultimately has control over the infrastructure and the data. A sensible approach, therefore, might be: leverage global innovation, but ensure local control.

This is of particular interest for cloud-native architectures. For example, companies can use open-source technologies developed worldwide and run them on European infrastructure. This creates a combination of global innovation, open standards, European infrastructure, local expertise, and control over their own data.

How Companies Can Strengthen Technological Sovereignty

Technological sovereignty cannot be achieved through a single measure. It develops gradually.

1. Analyze dependencies

First, a company should identify the dependencies on providers and technologies on which its own IT relies. This should not be limited to direct service providers. Indirect dependencies can also be relevant. Example: Cloud provider → Database → Backup system → Monitoring → IAM → SaaS application. The more components that are interdependent, the more complex a future transition may become.

2. Identify critical workloads

Not every application requires the same level of sovereignty. Particularly critical examples include: customer data, financial data, research data, or internal knowledge databases. Especially clear requirements should be defined for these workloads.

3. Prioritize open standards

Open APIs, standardized interfaces, and portable data formats facilitate future migrations. This applies in particular to: containers, Kubernetes, databases, storage, monitoring, logging, and identity management.

4. Use open-source software strategically

Open-source software should not be selected solely on the basis that it is “free.”

The following questions are more important:

• How active is the project?
• How large is the ecosystem?
• Which companies support it?
• What is the security strategy?
• What alternatives are available?
• How easy is it to migrate?

5. Ensure Data Portability

A company should always know: How do we get our data out of this system? This question should be answered as early as the technology procurement phase.

6. Define exit strategies

An exit scenario should be documented for critical providers.

This includes, for example: data export, alternative platforms, migration procedures, necessary tools, required expertise, time required, and estimated costs.

An exit strategy does not necessarily mean that the provider will actually be changed. It simply ensures that a change remains possible.

Checklist: How independent is your IT?

Companies can assess their technological sovereignty by asking a few simple questions.

Question	Yes/No
Do we know where our critical data is stored?	☐
Can we export all of our data?	☐
Are there any critical single-vendor dependencies?	☐
Do we use open standards?	☐
Can critical workloads be migrated?	☐
Do we have documented exit strategies?	☐
Are our backups independent of the primary system?	☐
Can we track access to our data?	☐
Can critical AI applications be operated in a controlled manner?	☐
Do we know our most important technological dependencies?	☐

The more often the answer is “No,” the greater the potential for a more confident IT strategy.

Why Local Solutions Can Prevail in the Long Run

Local and European solutions offer a strategic advantage, particularly in cases where companies prioritize control, transparency, and long-term predictability.

This applies, among other things, to:

• sensitive data
• Regulated industries
• public institutions
• Critical infrastructure
• Research and development
• Industrial production
• AI applications
• Corporate knowledge

Competition, therefore, is not driven solely by price or technical features. Increasingly, the following factors also matter: trust, control, transparency, security, and data sovereignty. This is precisely where European providers can gain an edge.

Conclusion: Technological sovereignty is becoming a competitive advantage

Technological sovereignty describes a company’s ability to shape its digital future on its own terms. This includes controllable data, a flexible infrastructure, open technologies, transparent operating models, and minimal dependence on individual providers. Cloud-native technologies, Kubernetes, and open source can be key building blocks in this regard. At the same time, European cloud and managed service providers are gaining importance as companies seek to maintain greater control over their digital infrastructure.

This trend is particularly evident in the field of artificial intelligence. Anyone who integrates internal knowledge bases, sensitive data, and business-critical processes with AI must inevitably address the question of where and under what conditions this data is processed.

The future of European digitalization, therefore, does not have to mean isolating ourselves from global technologies. Rather, it is about leveraging global innovation without relinquishing our own autonomy. Companies that rely on open standards, portable architectures, transparent infrastructures, and controllable data flows today are thereby creating greater autonomy. They are also laying the foundation for a more flexible, resilient, and competitively sustainable IT strategy.

And how sovereign is your setup right now?

If you had to pause for a moment when considering this question, that’s a good place to start. Take a look at where your critical data is stored and how easily you can recover it if necessary. If you’re looking for support to ensure seamless operations, we at NWS are the right partner for you. We operate exactly these kinds of open solutions for you— securely and in compliance with the GDPR.