Data sovereignty is becoming a critical business topic in Europe as executives grapple with changing regulatory environments and customer demands. Historically, business sentiment across the region has moved in lockstep with a political emphasis on providing alternatives to the US and China-based technology giants dominating digital markets. However, over time sentiment shifted away from a purist focus on creating new companies entirely towards a more balanced effort to better manage and regulate leading firms.
For instance, initiatives such as Gaia-X are working to build a framework and consensus around Cloud technologies, with many of the world's largest cloud providers contributing to the effort. More pressingly, the EU released the Cloud Code of Conduct - a measure worked on to varying extents for close to a decade. In a bid to balance requirements across the global cloud giants and smaller providers, the code contains three levels of compliance cloud providers can align to from self-assessment to more rigorous compliance standards.
To this end, with a view to building data and digital sovereignty capabilities as a point of differentiation above and beyond compliance, many leading firms are also making specific investments. Microsoft recently announced a significant process of rewiring core operations to support EU-centric storage and processing capabilities - effectively going above and beyond existing requirements and assuring EU customers that they no longer need to move their data out of the region for all core Microsoft Services.
The latest firm to go above and beyond core compliance requirements is ServiceNow. Who this week announced a multimillion-euro investment to support creating an EU, cloud-based digital workflow solution that helps ensure customer data doesn't leave the EU. Effectively, from early 2022 ServiceNow's EU clients will have the option for their data to be solely handled within the EU.
According to the firm, there are three core reasons behind the investment. The first is to proactively remove potential headaches for customers, particularly around regulatory change. The second, to support companies achieve compliance requirements. And the third, to enable innovation among their customers. While all three are essential, it's the final point that's likely to resonate most with the market. Regulatory headaches and shifting compliance requirements aside, one of the most significant challenges is overcoming specific barriers to entry for cloud adoption. In highly regulated industries, compliance concerns hit transformation roadmaps early on, leaving enterprises trapped with precious few options for driving more value from their technology investments. By tackling the growing sovereignty concerns head-on, ServiceNow opens up new doors for enterprises and significantly reduce barriers to entry for industries and jurisdictions that are prime candidates for future cloud and technology investments.
ServiceNow's proactive investments are characteristic of its commitment to bring innovative solutions to business challenges - and in this case, it could herald growing demand for the firm's platform in industries that have been formerly reluctant to engage.