The Looming Cloud Exit: Why Digital Sovereignty is Now a Top Priority for DACH Businesses
Businesses across the DACH region (Germany, Austria, and Switzerland) are increasingly viewing their reliance on major cloud providers as a strategic risk. A recent study by Lünendonk & Hossenfelder reveals a growing concern – 83% of companies believe a “kill-switch” scenario, where a cloud provider unilaterally restricts or cuts off access to critical IT services, is a realistic possibility.
The Rise of Digital Sovereignty Concerns
This isn’t simply hypothetical fear-mongering. Geopolitical tensions, data privacy regulations, and the desire for greater control over critical infrastructure are driving the demand for digital sovereignty. The study highlights that 36% of companies already consider digital sovereignty a very high priority, and a staggering 96% anticipate its importance will increase over the next three years, even if geopolitical conditions stabilize.
The core drivers behind this shift are multifaceted. Dependence on IT and cloud providers, the demand for resilience in times of crisis, protection against access blockades, and preventing extraterritorial data access are all contributing factors. Companies are realizing that outsourcing core IT functions doesn’t necessarily equate to reduced risk; it often shifts the risk.
Few Have a Plan B: The Exit Strategy Gap
Despite the growing awareness of potential risks, preparedness remains low. Only 57% of organizations have a defined exit strategy for switching cloud providers. This means nearly half have no concrete plan in place should they need to rapidly migrate their data, and applications.
This lack of preparedness is particularly concerning given the complexity of modern IT landscapes. Many organizations operate multi-cloud environments, further complicating the process of disentangling themselves from a single provider. Regulatory compliance adds another layer of difficulty, as businesses must ensure data remains protected and accessible during any transition.
Sovereign Cloud Alternatives Gain Traction
The search for alternatives is intensifying. The Lünendonk study found that 55% of respondents view sovereign cloud offerings – those with local EU operations combined with German IT service providers – as highly relevant. German cloud providers aiming to become “superscalers” are also gaining attention, with 48% considering them a viable option.
Multi-cloud architectures are becoming the norm, with 42% of companies already implementing them and another 46% planning to do so. This approach allows organizations to diversify their risk and avoid vendor lock-in, but it also introduces new challenges in terms of management and integration.
The European Cloud Challenge: A Competitive Gap
Even as interest in European cloud providers is growing, a significant gap in competitiveness remains. 93% of companies consider European providers competitive at the infrastructure level, but this drops to just 3% when it comes to platform, AI, and ecosystem services compared to US hyperscalers. Optimism for a functional level playing field by 2030 is even lower, with only 2% expecting parity.
This disparity highlights the need for increased investment in European cloud innovation and the development of robust, competitive alternatives. Without them, the DACH region risks remaining heavily reliant on non-European providers, potentially compromising data sovereignty and strategic autonomy.
Expert Advice: Proactive Steps are Crucial
Tobias Ganowski, Senior Consultant at Lünendonk & Hossenfelder, emphasizes the urgency of the situation: “Digital sovereignty tolerates no delay! Companies must now muster the courage to actively reduce dependencies, even if it is inconvenient and costly.” He clarifies that the goal isn’t complete self-sufficiency, but rather the ability to consciously manage critical dependencies, control risks, and maintain operational flexibility.
Mario Zillmann, Senior Partner at Lünendonk & Hossenfelder, adds that sovereign alternatives should complement, not replace, existing hyperscaler offerings. “The future of IT is therefore hybrid and differentiated.”
FAQ: Digital Sovereignty and Cloud Risk
Q: What is a “kill-switch” scenario?
A: It refers to the possibility of a cloud provider unilaterally restricting or completely shutting off access to critical IT services.
Q: What is digital sovereignty?
A: It’s the ability of a country or organization to maintain control over its data and digital infrastructure.
Q: Is a multi-cloud strategy enough to ensure digital sovereignty?
A: While it diversifies risk, a multi-cloud strategy alone doesn’t guarantee sovereignty. Organizations must also consider data location, provider jurisdiction, and the terms of service.
Q: What steps can companies take to improve their digital sovereignty?
A: Develop an exit strategy, diversify cloud providers, prioritize data encryption, and assess the geopolitical risks associated with their IT infrastructure.
You can find the full study on the Lünendonk & Hossenfelder website.
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