The sovereignty shift: how UK and Irish SMEs can regain control of their data

Anxiety around data hosting is mounting among small and mid-sized enterprises (SMEs) across the UK and Ireland, as concerns about compliance, control and customer trust intensify.

With more than six million SMEs across both countries relying on data storage, this issue has broad implications for national economies and deserves serious attention from business leaders.

Geopolitical tensions and evolving regulations are reshaping the global cloud landscape. What was once a technical consideration for IT teams has now become a boardroom-level priority. Increasingly, SMEs are questioning how their data is protected, stored and accessed in the face of these new pressures.

Our recent research found that 61% of UK SMEs and 45% of Irish SMEs worry about where their data is stored.

A changing data landscape

Regulatory change and geopolitical volatility have brought new urgency to the issue of data sovereignty. In the UK, post-Brexit divergence has propelled sovereignty up the national agenda.

The Data (Use and Access) Act 2025, alongside the government’s 2024 decision to classify data centers as critical national infrastructure, signals that sovereignty is becoming embedded in the UK’s digital DNA.

Ireland, meanwhile, remains aligned with the EU Data Act, which underlines the bloc’s intent to foster a resilient and self-reliant digital economy.

Globally, shifting tariffs and the implications of the US Cloud Act have injected uncertainty into data-sharing relationships. Against this backdrop, UK and Irish SMEs have ample reason to act now to secure their digital infrastructure.

The challenge is clear: SMEs want greater certainty over their data, but remain deeply entangled with global providers.

Despite rising concerns over data sovereignty, concrete action is yet to be seen. In the UK and Ireland, 42% and 39% of SMEs, respectively, have no plans to switch providers.

Why are SMEs hesitant to act?

A major factor is lack of visibility. Most SMEs are unsure whether their data is hosted within EU borders. Without that knowledge, businesses cannot assess their exposure or take corrective steps.

Beyond awareness, a lack of guidance and support compounds the issue. Unlike large enterprises, SMEs often lack the resources to map their data flows or navigate compliance requirements.

This lack of transparency increases the risk of regulatory breaches and reputational harm if there’s a data breach, for example. Without the right guidance, SMEs can also overlook the importance of the issue entirely.

SMEs are also wary of the perceived risks of switching, including a fear of downtime, data loss or system incompatibility. These are understandable concerns, but with the right partner, transitions can be seamless. The right European provider should manage migration with minimal disruption.

Finally, cost and scale perception remains a barrier. Many SMEs will opt for global providers because historically they have been able to provide the same service at a fraction of the price and on a larger scale. However, as digital infrastructure becomes a continental priority for Europe, these concerns should soften.

The sovereignty advantage

Pressure for change is growing as sovereignty shifts from a technical concern to a defining competitive advantage.

In today’s climate of digital uncertainty, data sovereignty has become a marker of trust and long-term stability for customers. Directors are increasingly aware of this shift with 14% of UK and 16% of Irish business leaders driving sovereignty initiatives within their organizations according to our research.

Customers, too, are adding pressure, demanding greater transparency about where data is stored.

This shift in perception is understandable, as data sovereignty offers SMEs clear advantages, from stronger protection against foreign interference to greater control over sensitive information. Local partnerships often bring enhanced transparency, supported by shared regulatory frameworks and common compliance standards.

By reducing reliance on international providers, SMEs can limit exposure to volatile global markets. Moreover, keeping data within Europe helps fuel local innovation, economic growth, and digital talent development

We see sovereignty not as a limitation, but as an opportunity to build stronger, more sustainable digital infrastructure. Those that embed sovereignty into their digital strategy will be better placed to lead in Europe’s next digital chapter.

Charting the sovereign path forward

To make this transition to sovereignty, SMEs need practical guidance to move beyond short-term bandage solutions and embed sovereignty into their long-term strategy. The first step is education. SMEs cannot make informed decisions about data sovereignty if they do not know where their data is located.

Practical support is equally essential. Many SMEs need hands-on guidance to navigate the technical and regulatory aspects of sovereignty. Service providers that offer transparency, seamless migration processes, and clear communication will be the ones to stand out.

The most effective partners will help businesses transition without disruption, ensuring compliance and continuity along the sovereign path.

European providers must continue to meet the performance and cost expectations set by global competitors. High-performing, locally based infrastructure, supported by robust service-level agreements and clear compliance commitments, will be key to convincing SMEs that sovereignty does not mean compromise.

The path forward is clear: sovereignty is becoming a commercial differentiator as much as a regulatory necessity. Right now, European SMEs have an opportunity to embrace Europe’s digital future and gain a competitive edge in deciding how their data is hosted.

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