$80 billion of IaaS spending is expected to shift from global to local cloud providers this year, with Europe seeing an 83% surge as workloads are moved toin-country or in-region locations.
► One fifth of all workloads will be moved to locally based services
► Partners need to provide clear options and migration services
Gartner estimates that increased ‘geopatriation’ (organisations moving data back to local cloud providers) will shift 20% of current workloads from global to local cloud providers. In addition, 80% of the sovereign cloud IaaS spend will come from net new digital solutions or legacy workloads waiting to be migrated to a cloud environment.
Gartner estimates that worldwide sovereign cloud IaaS spending will total $80 billion in 2026 – a 35.6% increase on 2025. Growth in Europe (83%) will be much faster than the global rate as government, highly regulated industries and energy, utilities and telecommunications organisations respond to geopolitical factors.
China and North America are expected to generate the highest spends in 2026 – $47 billion and $16 billion respectively – both growing at around 20%. Europe is forecast to surpass North America in sovereign cloud IaaS spending in 2027. An almost identical rate of growth is expected in Europe between 2026 and 2027, with spending rising from $12.6 billion to $23.1 billion.
For partners, these numbers highlight the need to offer cloud services hosted in-country or in-region, and to provide strong migration, orchestration and management capability.
Gartner predicts that hyperscalers will face mounting pressure as local cloud providers gain share and governments demand greater platform regionalisation to meet regulatory and national security requirements.
