Geopolitics and EU regulations: how to adapt your cloud strategy

Geopolitical Risks in the Cloud Provider Chain

It has probably not escaped anyone that the security situation is becoming colder both in Europe and globally. This has, of course, led to geopolitical uncertainty, sanction risks, and disruptions in supply chains that affect both IT strategic decisions and supplier dependencies even at home. Swedish companies have become more restrictive when it comes to partners in the USA and China, while trust in Nordic and EU-based partners is increasing.

This has resulted in companies no longer being able to regard their cloud solution merely as a technical platform, but rather as part of a supply chain with several geopolitical dependencies in the form of data flows, subcontractors, and infrastructure. Having control, flexibility, and a sustainable strategy moving forward is crucial to be able to adapt to how the situation develops.

EU Regulations Governing Your Cloud Strategy

The uncertain global situation has already led to regulations and restrictions that affect which cloud investments we want to, and are allowed to, make, especially within the AI area.

EU initiatives on sovereign cloud, GAIA-X, and regulations such as NIS2, DORA, the AI Act and the Data Act have increased demands for governance, incident reporting, supplier control, and data storage within the EU. But it also provides a clear framework for security and transparency that can help you with structured compliance and stronger protection against external threats.

The regulations also aim to reduce our dependence on non-European cloud providers and to stimulate an internal digital market with common standards. For you as a business owner, this means your cloud strategy needs to include a clear EU dimension. Not just for compliance, but for access to future collaborations and data flows within the EU.

Many regulations to keep track of? Read more in our cloud report.

How to Adapt Your Cloud Strategy

• Make supplier and chain risk a management issue, not just IT. The organisation’s choice of cloud provider, region, and operating model should be a question for management and the board as it affects business-critical risks in the event of sudden regulatory changes, sanctions, or conflicts.

• Implement a geopolitically aware placement policy. Define your first-choice options for each information class. For especially sensitive data, Swedish data centres or private clouds may be preferred. For other operations, a public solution like Azure may be the right choice. For some organisations, only Sweden is acceptable. Practice scenarios for geopolitical disruptions and plan to quickly be able to move operations or data storage to another geographical location.

• Build a systematic compliance flow. Map out which services are critical. These may include identity, access, backup, or customer and business systems. Appoint responsible persons and create routines for incident reporting, supplier review, and traceability. Tie the requirements of relevant regulations to operations, automate controls and anchor continuity plans.

• Add sovereignty and portability clauses to contracts. Agree on where data may be physically stored and processed to guarantee processing within the EU. Have exit clauses for data export and clear timelines if the platform or provider must be changed due to regulatory changes or risk.

• The right thing in the right place through standardisation. Standardise interfaces, formats, and deployment methods to reduce lock-in and ensure portability. Preferably consolidate around a main provider when it lowers risk and cost, but ensure critical components and data can be moved and run in alternative environments if necessary.

By making placement choices per information class, strengthening compliance and continuity, and building portability and freedom of action, you can innovate securely in an increasingly uncertain world.