Digital sovereignty is not about protectionism – it is about creating the conditions for innovation, trust, and competitiveness in a digital world.
This point was well articulated in a recent piece by Christian Klein, CEO of SAP. When asked about the long-term benefits for Europe of getting this right, he said:
“Sovereignty and innovation are complementary objectives. Without secure and accountable frameworks, AI adoption will remain constrained. But if Europe gets digital sovereignty right, it strengthens resilience, competitiveness, and public trust simultaneously.”
Business context (today)
The current geopolitical situation is highly dynamic, with daily changes that have far‑reaching consequences. This is driving a need for better control of enterprise IT across four dimensions:
- Data: Often the most heavily regulated area. Controls on data storage and use (in various states) can be a critical point of impact. In Europe, key laws include GDPR, DGA, and DMA; in the US, the US CLOUD Act and FISA; and further afield, examples include China’s National Intelligence Law – meaning tighter controls may be required depending on jurisdiction and use case.
- Infrastructure: Who controls the physical, logical, and operational layers of systems – and where the data resides – is central. In cloud scenarios, the jurisdictional and legal exposure of the infrastructure is also a key consideration.
- Operations: Operational sovereignty includes the physical location of the resources that deliver services and whether they have the required security to execute them. Solutions that satisfy data and infrastructure requirements must also ensure people and support functions are located appropriately
- Legal: Which legal system ultimately governs the data, platforms, and operators is crucial. If data or systems in one jurisdiction are governed by another, sovereignty can be compromised, potentially creating conflicts of law across countries.
While additional controls are essential to address organizational risks, a potential downside is increased inertia. This inertia can slow change and reduce the value delivered by cloud‑enabled SAP platforms.
Agentic AI brings this trade‑off into sharp focus. Choosing a model or third‑party LLM determines where data is processed, who can operate the stack, and which jurisdictions apply, meaning AI sourcing must be central to any sovereign SAP strategy.
The importance of context: Impact use cases
Digital sovereignty takes a national perspective on IT. When translating that into organizational impact, it’s essential to consider each client’s specific context. Based on our SAP sovereignty experience, here are example use cases that illustrate typical impacts and considerations – while recognizing that each organization must assess its own situation:
- Global organization involved in national security: A global organization, headquartered in the US, with a global supply chain and some business units undertaking defense work, must balance the sovereign demands of its regulated businesses with the non‑sovereign demands of its commercial businesses. Optimization often needs to be considered separately across the different dimensions, as well as end‑to‑end. This can lead to a more fragmented SAP landscape, potentially involving multiple partners to balance commoditization and security. Innovation can still be achieved within this operating model through a collaborative ecosystem.
- A multinational, regulated organization in new energy sector: A multinational organization, headquartered in Europe, may deliver a common suite of products and services under strict regulation. Depending on its requirements, all sovereignty dimensions can be considered together. While this can be perceived as limiting flexibility in SAP delivery, it can also create economies of scale from an edge‑to‑edge, full‑stack perspective – simplifying SAP management and enabling stronger alignment to business outcomes.
- A European public sector organization: Public sector organizations typically operate within a single national jurisdiction. Depending on the nature of the services they provide, different levels of sovereignty and security will need to be considered. Balancing sovereignty and strict security requirements with structured procurement processes can be challenging, often requiring dedicated solutions across infrastructure, data, and operations to meet legal and jurisdictional requirements.
Not just a beginning, but a continuous journey
For many organizations, SAP is a business‑critical application and part of a continuous journey. Each day presents an opportunity to confirm direction and reassess plans based on the prevailing environment.
While the current geopolitical situation remains highly dynamic, several clear takeaways are likely to remain relevant:
- Geopolitical fragmentation: Continued global tensions and regional divides, at least in the short to medium term, will create uncertainty – impacting trade, technology access, and collaboration.
- Increased risk of external pressure and dependency: Globalization has increased dependency, which can be beneficial. However, it can also enable external pressure to be applied, leading to undesired consequences.
- Continued technical dependency: Heavy reliance on technologies such as cloud computing and AI from foreign or third‑party providers can increase vulnerability to disruption across the enterprise IT estate, with potential business and reputational impact.
As we look ahead to the opportunities Sapphire will bring, we should not view digital sovereignty as something relevant only to others or as a constraint on innovation. In the context of cloud and SAP, it is part of a continuous journey of delivery and value realization. A key learning from our current engagements is the importance of understanding context and being clear about impacts and risks across the different dimensions.
As one of the largest and most experienced SAP systems integrators, and SAP’s first accredited Sovereign Partner, Capgemini can help you assess the impact of digital sovereignty on your SAP estate and build a roadmap for success.
