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Data Sovereignty: Why European SMEs are reassessing digital trust

  • Reading time: 8 minutes
  • Category: team.blue

Data has become the lifeblood of modern business. It powers decision-making, fuels innovation, and underpins the trust between companies and their customers. It also plays a critical role in compliance, resilience, and long-term competitiveness.  

As more small and mid-size businesses (SMEs) rely on cloud services, understanding where data resides and under which jurisdiction it falls is increasingly critical. This urgency comes into sharp focus in a comprehensive study by team.blue. The research was a collaboration of several team.blue brands, including LetsHost, Combell, Register.it, names.co.uk, ScanNet, TransIP, HostingIreland.ie, Catalyst2, GURU Cloud Hosting, UKdedicated, Register365, Simply, and LCN.  

The findings reveal a striking reality: 

  • more than half of SMEs (57%) don’t know if their cloud provider guarantees data storage within EU borders.  
  • 72% express concern about their data being stored in the United States.  

Given the conflicting legal frameworks, it is unsurprising that SMEs experience uncertainty and concern. The U.S. CLOUD Act requires American tech companies to provide data access to the U.S. government upon request, regardless of where data is physically stored. This conflicts directly with Europe’s GDPR and puts companies in a legal and ethical dilemma. Adding to this complexity, the upcoming EU Data Act will introduce new requirements for data portability and sharing, making data sovereignty even more critical. 

This growing awareness of regulatory uncertainty and the risk of sensitive information becoming accessible to foreign governments is now influencing real business decisions, with 1 out of 5 European SMEs actively considering or have begun moving their data, according to the study. 

Growing Demand for European Data Hosting 

As SMEs navigate this shifting landscape, the importance of data sovereignty in building trust with customers and stakeholders has become more evident. The research reveals 51% of SMEs report increased stakeholder interest or concern about data location. Amongst all stakeholders, customers and company directors expressed the most concern. 

Data sovereignty goes beyond regulatory requirements; it's a competitive advantage. Businesses are increasingly recognising that European hosting delivers a wide range of tangible benefits, such as: 

  • Security and Trust: protection from foreign interference and strong security measures build confidence and safeguard sensitive data. 
  • Transparency and Reputation: greater transparency and control over data handling strengthen trust and reputation with customers and partners. 
  • Economic Benefits: localised expertise and reliance on regional providers help boost the European economy and improve service quality. 

Survey findings indicate a diverse landscape of data storage practices among SMEs. Among our customers surveyed, 32.1% of SMEs currently store their data with team.blue, followed by Google Cloud (13.2%) and Microsoft Azure (13%). Notably, 13% of SMEs are still managing their own solutions, while 6% remain either unsure of where their data is stored or lack access to any data storage solutions. 

Our solution: Building  digital  independence 

This shift reflects a broader understanding that data security isn't just about where data is stored, it's about creating comprehensive, integrated solutions that are secure and efficient.

The businesses that make sovereignty core to their digital strategy will have an advantage in the next chapter of the European digital economy, setting new standards for how companies approach digital transformation in an increasingly complex geopolitical climate. 

At team.blue, we believe data sovereignty isn't an add-on, it's the foundation for sustainable digital growth. Our commitment translates into a full range of European hosting brands which operate from ISO-certified European data centres with strict access controls. Through our local hosting solutions, we provide: 

This comprehensive approach ensures your data stays governed by European law with full GDPR adherence. The result? SMEs can focus entirely on growing their business without having to compromise on security, compliance, or performance. 

Are you ready to take back control of your data? Download our full "Data Hosting in Europe: Navigating Trust & Change in our Digital Landscape" report to explore how European businesses are reshaping their digital strategies around sovereignty. 

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