Public cloud has been transformative for businesses over the years, however, country-specific jurisdiction laws and data protection concerns have brought in a growing emphasis on sovereign cloud. According to a recent survey by HCLTech, approximately 24% of organisations are planning to migrate a portion of their data from the cloud to on-premise data centres within the next three years. 

One of the things that the survey did indicate was a huge interest in sovereign cloud, according to Alan Flower, EVP and head – Cloud Native and GenAI Labs, HCLTech. “Often what is driving this migration back to on-premise is security or regulatory adherence. There is this kind of awareness from clients that they may benefit from moving into a sovereign cloud, typically to align with their country preferences,” Flower said.

However, another interesting observation from Flower was that many organisations’ migration to the cloud was not transformational, but transitional. If organisations moved their IT from their data centres to someone else’s data centres, the cost savings for them were not very evident. 

“In my view, the potential cost savings can have an immensely transformative effect on your business, especially if you’re on a journey of transformation. However, if your ambitions are not aligned with this transformation and you’re merely migrating your IT infrastructure to the cloud, you might find yourself in a situation a couple of years later wondering where the expected impact has gone.”

Demand for sovereign cloud to grow 

Sovereign cloud is a cloud infrastructure that is subject to the laws and regulations of a specific country or region designed to ensure data sovereignty, which means that data is subject to the laws and governance of the country in which it is hosted.

Over the years, data protection concerns and laws have resulted in a significant rise in the demand for sovereign cloud. Flower expects the trend around sovereign cloud to continue. A focus on security and regulatory concerns is driving a lot of the activities.

“Especially in Europe, we notice a pronounced emphasis on sovereign cloud, which is not a trend seen worldwide but is notably prominent in this continent.” For example, earlier this month, AWS, the largest hyperscaler by market size, announced the release of AWS European Sovereign Cloud. 

However, going forward, the demand for sovereign cloud may further rise due to the implementation of data protection laws in various countries. For instance, in India, the Digital Personal Data Protection Bill 2023 has been approved by both Houses of the Parliament and is expected to be enacted soon. This legislation might require certain organisations, especially those in highly regulated industries to store their data locally or opt for a sovereign cloud solution.

“Moreover, I see lots of indications that clients are increasingly happy to consume what I would call a hybrid-multi-cloud estate. Many clients have adopted a flexible approach that enables them to relocate data workloads to the most suitable destinations. I anticipate that clients will take advantage of this flexibility, making decisions based on efficiency gains or enhanced transformative potential when moving workloads to more appropriate locations.”

Opting for a hybrid cloud strategy

In the future, more and more organisations are expected to adopt a hybrid model strategy recognising that some workloads and data are best suited for on-premises data centres, while others benefit from cloud delivery.

Notably, container-based infrastructure, exemplified by technologies like Kubernetes, has gained significant traction, according to Flower.  These container platforms enable centralised management of multi-cloud environments from a single control plane. This approach offers two key advantages.

Firstly it offers centralised management, meaning organisations can efficiently manage all their workloads, regardless of their cloud environment, as a unified piece of infrastructure. This centralisation simplifies administration and reduces complexity. Secondly, it also brings in the advantage of workload portability which means organisations can seamlessly migrate workloads between on-premises data centres and various cloud providers.

This ease of movement enables organisations to choose cloud providers based on the specific services they offer.

“We are observing a growing trend where clients actively seek the inherent portability facilitated by containerisation. This portability appeals to clients because it allows them to transfer various applications and solutions between different cloud providers seamlessly. Clients appreciate the flexibility to choose providers based on the rich array of services each one offers,” Flower said.

Disconnect between IT and business 

The HCLTech report titled ‘Cloud Evolution: Make Innovation a Habit’ also states that many companies plan to increase their investments in cloud technologies going forward. This is mostly driven by a genuine appetite for transformation. 

However, Flower also notes that there exists a slight disconnect between IT and the business when it comes to the cloud. While business leaders expressed a clear understanding of how the cloud could address their challenges, such as responding quickly to customer needs, increasing agility, and fostering innovation, IT leaders had a different perspective. 

“The IT leaders were telling the survey that they believed that the business may not fully appreciate the cloud’s capabilities. Hence, there is a slight disconnect between the expectations of business leaders and IT leaders. While the businesses are really sold on the strategic benefits of cloud, the IT leaders just need to get a little bit closer to those business leaders to help them achieve that ambition,” Flower said.

To align with this perspective, IT should focus not only on technology but also on enabling cultural change. Organisations must ensure that IT functions support the business in achieving the expected agility and access to innovation, Flower concluded.