The sovereignty tax: why UK firms want off US cloud and cannot move
Ask most owner-managers where their business data lives and the honest answer is a shrug and a brand name: it is in Microsoft, or in Google, or in Amazon's cloud. That was a sensible default for years. A new UK study suggests a lot of firms now wish they had more room to move, and are finding they do not have it. The lesson underneath the headline is not about politics. It is about whether you could switch supplier if you had to, and most businesses have quietly lost that option without noticing.
Research by the UK cloud firm Civo, reported by ITPro, found that two-thirds of UK businesses could drop their US cloud provider over concerns about where their data and systems sit, and who ultimately controls them. Nearly three-quarters now call this a strategic priority, up 12 points on last year. Yet only 15% have actually moved to a domestic alternative, a number Civo says has stalled. One in four believe they could leave a US provider entirely. The rest feel stuck.
The lock-in is the story, not the flag
Civo calls the cost of being stuck a "sovereignty tax". It is a good phrase, as long as you read it as a lock-in problem rather than a patriotism one. The reasons firms cannot move are practical and familiar: technical lock-in, the sheer effort of migrating, contract terms that make leaving expensive, and the general cost and risk of switching. None of that is unique to American suppliers. It is what happens whenever your business is built so tightly around one provider that unpicking it becomes a project nobody wants to start.
That is the part worth taking personally. Sovereignty is the reason this study exists, but lock-in is the thing that will actually bite you, and it bites regardless of which flag your provider flies. A supplier that raises prices, changes terms, suffers a long outage, or simply stops offering the service you depend on presents the same question in every case. Could you leave? For most firms the answer has drifted from "yes, with effort" to "not really", one convenient integration at a time. Civo's own figure is stark: 28% of UK firms say they have become more deeply entrenched, not less.
What to do about it, at your size
You are not going to re-architect around this next quarter, and you should not try. But you can stop the lock-in getting worse, and you can keep the exit open. A few moves matter more than the rest.
- Know what leaving would cost before you are forced to find out. Pick your most important service and ask the plain question: if this provider doubled the price or went down for a week, what would we do? Working out the answer once, calmly, is worth more than any policy document.
- Get your data out in a form you can actually use. The single most important thing you own is your data. Make sure you can export it in a standard, portable format, not a proprietary one you can only read inside the same provider's tools. If you cannot get a clean copy out, you do not really control it.
- Read the exit clause, not just the price. The important part of a cloud contract is not the monthly cost, it is what happens when you want to leave: notice periods, data-return terms, and the fees for getting your own data back out. Check it before you sign, not when you are trying to go.
- Keep new commitments loosely coupled. Every time you wire your business deeper into one provider's own tools, you make leaving harder. That can be the right call, but make it a decision, not a drift.
Sovereign cloud may or may not turn out to matter for your business. Being able to switch supplier always matters. Treat the first as a question for later and the second as a habit for now.
How Steelwise can help
Working out what you have plugged in, what leaving would actually cost, and whether you could get your data out cleanly is exactly the kind of review we do with clients. Get in touch.