Dive Brief:
- Three-fourths of business leaders are concerned with the geopolitical risks of storing and managing their data in global cloud environments, according to the 2025 Cloud Readiness Report published Wednesday by Kyndryl.
- Local requirements such as digital sovereignty regulations have pushed 65% of business leaders to change their cloud strategies as a result, the report found.
- “With AI demanding seamless data access and governance requirements rapidly evolving, a hybrid cloud model is the differentiator that enables successful AI adoption,” Nicolas Sekkaki, global cloud practice leader at Kyndryl, said in a press release.
Dive Insight:
Hybrid cloud strategies can help businesses support AI functionality while adhering to local regulations for data storage and management.
Indeed, 84% of cloud leaders intentionally opt for multiple clouds, the Kyndryl report found. Another 41% reported repatriating some of their data from public cloud to on-premises servers. Integration between public and private clouds has improved, allowing enterprises to use the best option for each workload, especially in countries with strict data rules, according to the report.
Hyperscalers are investing billions to build out cloud servers for customers to store data locally, Kyndryl found.
Google plans to invest 5.5 billion euros (around $6.4 billion) over the next four years in cloud and AI infrastructure in Germany, according to a Tuesday announcement. The hyperscaler said it would continue to offer sovereign cloud products to let companies adopt advanced cloud and AI capabilities while adhering to local regulations.
Microsoft also expanded its sovereign cloud offerings in June with the launch of Microsoft Sovereign Cloud, a suite of offerings spanning public cloud and private digital infrastructure, according to an announcement.
While hyperscalers lead the market for cloud and AI services, the rise of specialty cloud providers such as Akamai, Vultr and Expedient, enable businesses to meet certain use cases that might fall between the cracks, Gartner Distinguished VP Analyst Ed Anderson said during the Gartner IT Symposium/Xpo in October. That includes sovereign clouds to meet location-specific requirements, he added.
“Hybrid is going to be critical no matter what,” Anderson said.
