Hyperscaler exit plans rise as IT leaders weigh geopolitical exposure
Sovereignty fears and risk evaluations are driving interest in alternative providers and sovereign clouds
In the fifth part of our technology trends research we look at security, with a focus on cloud plans and how they are changing with the geopolitical outlook.
Our most recent research into IT trends covered AI, smart glasses and robots. You can find that in the articles below.
In this piece we look at we look at risk, with a focus on cloud plans and how they are changing with the geopolitical outlook. The poll, conducted in January, was answered by 138 UK IT leaders.
Declouding
Eighteen percent of 138 UK IT leaders polled in January said they will be “declouding” some data and/or services in 2026, removing them from cloud platforms in favour of on-premises infrastructure or locally hosted service. Last September, we found similar numbers planning to "decloud” (16%). Digging into the responses we noted the main drivers were improved security and lower costs.
Moving away from hyperscalers
Seventeen percent said they are considering moving data or services from US or Chinese cloud service providers this yeasr in favour of other cloud providers. Another 17% said they have already done so.
Comparing these results with those from September 2025, moving away from hyperscalers seems to be a growing trend. At that time, just 10% said they had moved data and/or services to other providers, while a further 8% planned to do so.
The reason? A director of DevOps and transformation in a technology company didn’t beat about the bush: “The risk of Trump”.
Indeed, the USA’s willingness to use its tech giants as blunt instruments of foreign policy was foremost in many minds. “We’re worried about the dominance of US companies and political implications of having our business dependent on US services,” said a CIO in education.
Sixty-five percent of respondents said they are worried about the legal and operational reach of some nation states into their data and infrastructure.
“[We’re] worried about foreign intervention, especially with US services,” added an availability manager in retail.
A strategist in government was concerned about "the risk of access denial in time of international adversity.”
Others said their customers were in regulated sectors, where increasing regulation is driving demand. “Customer demand - varies by sector, but some asking now,” said a head of digital services in the business services sector.
“It is essential in some of the markets we work within and it feels like the correct secure model for the future with how the world is at the moment,” added a CIO in finance.
Meanwhile, some respondents saw cost advantages and other benefits in restructuring operations around alternative services. “There may be better options on cost and compliance in terms of customer requirements for the states where we plan to expand the business,” said a CTO in technology.
Sovereign cloud services
Thirty-seven percent of respondents believe that “sovereign clouds” will become the norm for regulated industries.
Cognisant of the increasing wariness of their customer base, the hyperscalers have stepped up with their own sovereign clouds, with promises and guarantees around data location and the security and staffing of datacentres.
Given the dependence of most UK organisations on Microsoft, it is no surprise to see its offering at the top of the list (33%). Microsoft Sovereign Cloud is run out of datacentres staffed by EU employees and management. Microsoft also offers a service called Azure Local which allows customers to run its services from their own data centres.
Next comes AWS (21%), whose soveriegn cloud is described on its website as a "new, independent cloud for Europe entirely located within the European Union (EU), designed to help you meet your most stringent sovereignty requirements”. After that we find Oracle (13%), which, like the others, offers physically separated operations. Oracle also provides special services aimed at government and regulated sectors.
However, as a US companies, these services are still subject to the Cloud Act meaning protections from US government access are legally limited. The first European player, SAP, comes a distant fourth (4%).
As desirable as they might be, sovereign cloud services come at premium (typically around a 30% uplift), and at a time when most respondents (70%) expect day-to-day cloud prices to rise by 10% or more, plans to migrate may be limited by finances to the most sensitive workloads.
Future risks
In terms of emerging risks, respondents were most concerned about AI enabled disinformation, supply chain attacks, an escalation of ransomware, and an over-reliance on LLMs for decision making.
Despite the NCSC nudging organisations to act on the risk to encryption of future quantum computers, this is a top-three concern for just 9% of respondents. However, 19% said quantum-readiness is now the subject of boardroom discussions.
We’ll be looking at the quantum threat in much greater detail in coming research, which will be showcased at Computing’s Security Leaders Summit later this month.