Digital Sovereignty: The Freedom to Innovate on Europe’s Terms

Digital sovereignty is about freedom, and that freedom depends on procurement. The choices you make—what you sign, who you partner with—directly shape Europe’s competitiveness and security.

Why sovereignty matters

Europe’s digital future is highly sensitive to events beyond its borders. Major disruptions have shown how fragile our digital foundations can be:

• The SolarWinds attack—one supplier, global fallout, thousands of European institutions exposed;
• The Huawei 5G bans—entire countries had to rip out infrastructure at massive cost;
• The Meta vs GDPR battles—proof of what happens when platforms aren’t built for our rules;
• Export bans on AI chips—suddenly Europe’s innovation speed depended on decisions made elsewhere.

Lock-ins as a threat

Global platforms like Microsoft 365 save us time and money. The danger is when dependence turns into lock-in. Switching becomes too costly, compliance is defined elsewhere, and innovation slows down.

Current figures are cause for concern:

• The global software market is worth over $650 billion today and will hit $1.6 trillion by 2034. But Europe’s share is 23–25%;
• In the cloud, European providers hold just 15% of the market, down from 30% a few years ago;
• Even our largest champions—SAP, Deutsche Telekom—have only ~2% each;
• Almost 60% of IT organizations outsource at least some software development services (many likely to non-European locations);
• While 80% of CIOs worry about vendor lock-in, fewer than half have procurement policies to prevent it.

When we choose a service provider, an AI tool, or any platform, we often choose between a global giant and a much smaller European competitor.

That’s why procurement is the front line of whether Europe keeps its freedom to innovate. Every contract, every vendor choice either preserves flexibility or locks dependency in for years.

Where Europe already leads

Europe already has powerful assets. What’s missing is scale and adoption. Four pillars stand out:

• Infrastructure & Data: Many European cloud platforms meet the highest certifications, yet hold only ~15% market share. Every choice that includes European players helps rebalance the ecosystem;
• Compliance: Europe leads with the GDPR, the Data Act, the AI Act, and the NIS2 Directive, and more. Buying GDPR-ready solutions from day one builds trust;
• Cybersecurity: After the 2017 WannaCry ransomware attack, NIS2 raised the bar. Procurement still decides whether organizations buy certified European solutions or patch together tools without regional assurance;
• Software: Europe has plenty of homegrown alternatives—collaboration tools, security platforms, analytics, and e-signatures.

Custom software: Europe’s untapped advantage

Our greatest untapped strength in digital sovereignty is software talent. With over 6 million developers—the second-largest pool worldwide—and a custom software market worth $11 billion and growing 20% annually, we can create solutions aligned with regulations, security, and industry needs from day one.

Why custom software is key to sovereignty:

• Regulatory alignment by design: European-built platforms integrate compliance from the start. For instance, by 2030, all EU citizens must access electronic health records online—a U.S. off-the-shelf system would need costly adaptation;
• Avoiding lock-in: Organizations own their code, data models, and integrations. They are not hostage to license changes, forced upgrades, or sudden exit fees;
• Differentiation & competitive edge: From MES systems in manufacturing to smart grid platforms in energy, custom solutions enable processes aligned with EU sustainability and climate targets;
• Seamless integration & easy exit: Built on open standards and APIs, custom solutions allow switching partners without disruption.

Concrete steps for procurement

This is how procurement can strengthen digital sovereignty:

• By designing tenders that require open standards, portability, and EU compliance, you open the door to local providers;
• By valuing lifecycle cost over license cost, you make the business case for custom solutions;
• By giving European software houses room to scale through contracts, you help them mature into global competitors.

“Why not just buy the best technology from abroad?” you may ask. “Take the best outside, use the best inside.”

But we shouldn’t build a European clone of every product. We should focus on where control truly matters:

• Critical infrastructure (energy, transport, and defense) where sovereignty is non-negotiable;
• Infra & data services where data location and freedom from lock-in shape long-term resilience;
• Software logic – it’s vital who writes the code and sets the rules.

The hidden costs of neglecting all this are huge:

• Regulatory risk: GDPR fines of €20 million or 4% of global turnover, or AI Act delays that can freeze or even cancel product launches;
• Reduced flexibility: Over 80% of businesses find switching cloud providers too complex or expensive;
• Missed value: Adapting foreign systems to EU rules sacrifices the chance to turn compliance into a competitive global advantage.

Let’s turn capability into action

How ready are you to stand on your own digitally? A quick self-assessment can help you gauge your business today. Follow the link to download our practical tool.

https://form.andersenlab.com/digital-sovereignty

The laws are written. Technology exists. Top talent is here. It’s time to build that freedom together.