EU cloud sovereignty remains unrealistic by 2026
European companies are pushing hard to control their digital infrastructure. That’s good. But full cloud sovereignty, owning and operating everything without relying on external providers, won’t happen by 2026. That’s Forrester’s take, and they’re probably right.
Most firms in the EU still run critical workloads on US hyperscalers like AWS, Google Cloud, and Microsoft Azure. These platforms are reliable, scalable, and deeply embedded in daily business operations. That’s not going to unwind in just a couple of years.
Yes, some sectors are experimenting with more specialized, local cloud solutions. You’ll see banking, defense, and government moving niche services to sovereign or hybrid setups. But these moves don’t scale across the broader European economy. And most local cloud providers still can’t match the enterprise-grade performance, ecosystem integration, and R&D muscle that US providers have.
If you’re an executive, what matters is execution. If your teams are trying to decouple from hyperscalers too quickly, you’ll likely run into cost overruns, performance gaps, and integration headaches. That slows down innovation and weakens your competitive position. So, right now, the key is not to abandon the idea of digital sovereignty, but to be realistic about timelines.
According to Forrester’s 2026 European Predictions, no major player will fully exit US cloud dependencies within the next two years. That means you optimize decisions for business continuity while laying the groundwork for more control in the long term.
Dane Anderson, Senior Vice President of International Research and Product at Forrester, put it clearly: while EU institutions are aiming for deeper competitiveness and independence, companies are forced to be pragmatic. They’re playing the long game, but starting from a place of operational necessity.
The path to sovereignty isn’t impossible. It’s just going to take longer, and it’ll require more than declarations. It’s about scaling actual capacity, trust, and interoperability in Europe’s cloud ecosystem. Until then, smart companies will keep using the best tools available while investing in alternatives that are viable.
Pragmatism triumphs over the ideal of complete digital independence
There’s ambition, and then there’s execution. Many European institutions want full digital independence. That’s understandable, especially with geopolitical tensions climbing. But businesses aren’t driven by policy declarations. They’re driven by performance, cost, and stability. And right now, pragmatism is in the driver’s seat.
Forrester’s report makes this point clearly. While the vision of cloud sovereignty is alive, the operational realities force companies to work within the constraints they’ve got. Infrastructure gaps, budget limitations, and compliance challenges all add friction.
If you’re in the C-suite, your job is to create resilience and certainty. That means thinking about sovereignty not as a binary, on or off, but as a scale. Companies can reduce dependency on US hyperscalers by restructuring workloads, diversifying providers, and investing in local platforms where they make business sense. Total decoupling is not mandatory, or even practical, for progress.
Dane Anderson from Forrester emphasized this shift in mindset. He called for companies to enable a form of digital sovereignty that’s “feasible, desirable, sustainable, and affordable.” That’s the right framework. If a goal checks all four of those boxes, move hard on it. If it doesn’t, don’t build your roadmap around it.
Decision-makers should also account for regulatory complexity. Europe’s environment is unique. Compliance isn’t just a legal issue, it impacts product timelines, data architecture, and cost structure. That reinforces the need for tailored sovereignty strategies rather than standardized plans copied from other markets.
In high-pressure environments, it’s tempting to make bold moves for fast gains. But sustainable change comes from alignment between technical feasibility and strategic vision. That’s what Forrester is pointing to. Forget the all-or-nothing approach. Focus on what you can build now that moves your company forward, without slowing momentum or overextending teams.
Continued dominance of Microsoft in the European desktop market
There’s been some noise around moving away from proprietary software, shifting to Linux desktops or open-source collaboration tools. Some regions have greenlit these transitions, like Schleswig-Holstein in Germany or the city of Lyon in France. But those are isolated cases, not market-wide shifts. By 2026, don’t expect widespread change. For most European organizations, Microsoft remains firmly entrenched.
Forrester’s analysts explain why. It’s about infrastructure readiness and support. Most open-source desktop environments today simply don’t offer the same level of mission-critical reliability or enterprise integration. That makes them a risk for large-scale deployments, especially in sectors where uptime, compatibility, and user familiarity are non-negotiable.
If you’re running IT for a multinational, the cost of switching goes beyond software licenses. There’s training, support, app compatibility, and broader security implications. Unless the alternative is as mature and fully backed, CIOs won’t touch it. And right now, the open-source desktop ecosystem isn’t there yet.
This is where leadership decisions matter. Chasing independence for its own sake, without ensuring performance, supportability, and user experience, is not strategy. It’s distraction. Microsoft’s stack is embedded in enterprise workflows, especially with Microsoft 365, Teams, and integration into cloud backends. Removing that isn’t just a technical project, it’s a business transformation, and most firms aren’t prepared to manage the risk-reward ratio yet.
If the goal is to reduce dependence or improve control over your IT environment, fine, start with modular moves. But don’t let ideology drive platform decisions unless the business case stands on its own. Right now, according to Forrester’s forecasts, Microsoft will retain its dominance simply because the alternatives don’t match the enterprise-grade requirements needed to make a competitive switch.
European companies are poised to lag behind the US in generative AI adoption
The pace of AI development is accelerating, particularly in the generative space. By 2026, daily use of generative AI tools is expected to double. But European enterprises won’t be leading that surge. According to Forrester, EU-based companies will lag behind their US counterparts by about 10% when it comes to company-wide deployment of generative AI.
One reason for the delay is launch sequencing. Most major AI providers debut their solutions in the US first. That creates a natural lag, both in product availability and enterprise adoption. But the larger issue is structural. European businesses, on average, have less mature AI infrastructures. That affects everything, from integrating new AI features into legacy systems, to enabling safe, compliant deployment across teams.
There’s also regulation. The EU’s approach to digital oversight is strict and detailed. That’s not inherently a bad thing, it can drive better governance and trust. But it does create friction. Building compliant AI systems takes time, money, and clarity. Right now, many companies are stuck in the proof-of-concept stage because the frameworks and certifications needed to scale aren’t yet in place. If you’re a C-suite leader in Europe, that complexity has to be part of your AI roadmap.
Forrester’s recommendation is clear: don’t wait. Get past the experimental phase and move fast toward embedded, production-grade AI. That means investing in your own AI capabilities, teams, tools, infrastructure, and not depending entirely on vendor roadmaps. Waiting for perfect regulatory clarity or mature plug-and-play solutions will only widen the adoption gap.
This lag isn’t permanent, but doing nothing will make it longer. Decisions made now will either position your organization to compete, or leave it trailing behind more agile markets. The companies that scale generative AI early will gain efficiency, insight, and market leverage. The ones that stall will play catch-up for years.
Key takeaways for decision-makers
- EU cloud independence will remain limited in the short term: European companies won’t fully exit US hyperscalers like AWS, Google Cloud, or Microsoft Azure by 2026. Leaders should optimize around hybrid models while investing in local alternatives that deliver real business value.
- Pragmatism is shaping cloud strategy: Complete digital sovereignty isn’t feasible in current market conditions. Executives should focus on reducing dependence where it’s practical and sustainable, without compromising critical performance or continuity.
- Microsoft will retain a stronghold on European enterprise desktops: A broad shift to open-source alternatives is unlikely due to a lack of mature, mission-critical support. C-suite leaders should prioritize stability and integration over unsupported experimentation.
- Europe is falling behind on generative AI adoption: Forrester expects a 10% lag compared to the US, driven by slower market rollouts and regulatory friction. Executives must accelerate investments in AI capabilities and push past proof-of-concept to scale usage.
