SAP introduces on-site cloud infrastructure to meet data sovereignty demands

SAP has announced a global expansion of its Sovereign Cloud portfolio with a new on-site solution, allowing customers to host SAP-managed cloud infrastructure directly within their own data centers. This move is a direct response to a growing demand from governments and regulated industries for greater data sovereignty and control over their digital environments.

The SAP Sovereign Cloud On-Site solution is designed to give customers the highest level of physical control and data residency without sacrificing the benefits of cloud computing, such as scalability and innovation. According to Thomas Saueressig, a member of the Executive Board of SAP SE, the offering "empowers customers to define their own sovereignty boundaries while leveraging our global infrastructure expertise".

Key features of the on-site solution

The new on-site model is part of SAP's broader Sovereign Cloud initiative, a full-stack framework that addresses four key dimensions of sovereignty:

• Data sovereignty: Ensures data is stored in local data centers or approved countries, preventing unauthorized cross-border transfers and complying with critical infrastructure regulations.

• Operational sovereignty: Guarantees that sensitive operations are handled by approved, local personnel with the necessary security clearances.

• Technical sovereignty: Gives customers control over the infrastructure, with strong separation enforced through encryption or dedicated infrastructure.

• Legal sovereignty: Aligns governance with local legal frameworks, ensuring compliance for public sector and regulated industries.

By offering this new deployment option, SAP is providing a flexible alternative to its existing SAP-hosted and hyperscaler-based models, catering to a diverse range of regulatory and operational needs. The infrastructure is built on open-source technology, which provides customers with transparency and operational flexibility.

Strategic market impact

This expansion comes at a time of increasing geopolitical tensions and stricter data protection laws, particularly in Europe. SAP has made digital sovereignty a strategic priority, pledging to invest over €20 billion to expand its sovereign cloud offerings in Europe over the next ten years.

This move also differentiates SAP from major U.S.-based cloud providers, with SAP positioning itself as a secure and compliant alternative. SAP CEO Christian Klein has stated that SAP is the "only vendor that can offer sovereignty over the entire stack from the infrastructure to the application".