When AWS suffered a major outage last month, the ripple effects were felt widely, from online banking portals and retail payment systems to public sector applications. For many businesses, it was a reminder of just how dependent modern economies have become on a handful of overseas technology providers. In an era where cloud infrastructure underpins everything, the incident exposed a growing vulnerability – the erosion of digital sovereignty.
There are a group of businesses – small and medium-sized enterprises (SMEs) – for whom this should be a wake-up call. Yes, the scale may be different to that faced by multinational banks or government departments, but the risk is the same. If the network and cloud systems an SME relies on sit outside its control, so too does its ability to guarantee resilience, security, and trust.
Increasingly, sovereignty is emerging as the new competitive frontier. The question is no longer ‘who can move fastest?’ but ‘who can be trusted most?’
The currency of trust
Digital sovereignty can be defined simply: it’s the ability of an organisation to maintain control over its own digital assets — data, infrastructure, and the rules that govern them — within its legal and ethical boundaries. For SMEs, this is fast becoming the most valuable currency in business.
But right now it’s scarce. As cloud adoption accelerates and data flows across borders at unprecedented speed, too many organisations rely on platforms whose governance and jurisdiction lie elsewhere. When data is stored in an overseas data centre, or processed by a vendor with different security priorities, maintaining compliance with UK or EU regulations becomes complex, and potentially more costly.
Digital sovereignty is not just a compliance checkbox; it’s an essential element in the security arsenal that underpins long-term business confidence.
From regulation to reputation
Frameworks such as the UK Data Protection Act 2018, GDPR and NIS2 demand greater transparency and accountability in how data is managed and secured. All businesses are under growing pressure to demonstrate not only that their systems are compliant, but that they are verifiably trustworthy, particularly as customers become more discerning.
For SMEs, this convergence of regulation and reputation presents a conundrum. On one hand, they face increasing compliance burdens and cyber risk; on the other, they have a unique opportunity to differentiate through sovereignty and security. Those who can show that their operations are both resilient and transparent will win a growing share of customer trust — and, in turn, market share.
Zero trust – the foundation of sovereignty
Digital sovereignty can’t be achieved through policy declarations. It requires a technical foundation rooted in zero trust principles where no user, device, or application is implicitly trusted, regardless of their location.
This can cause problems with employees internally, but for SME’s it’s important to remind team members that not every door in the office is open to every one of them without a pre-approved pass. They are entrusted only with access appropriate to their role, and the same applies to the network.
A unified zero trust approach to networking allows businesses to move beyond perimeter-based security toward continuous verification, least-privilege access, and automated threat detection. And it provides the visibility and control needed to align with regulatory mandates.
The evolving cloud debate
The once-polarised debate between cloud and on-premises infrastructure has evolved. Early cloud evangelism promised limitless scalability and cost efficiency. Yet, as the AWS outage showed, the convenience of outsourcing critical workloads can come at the expense of control and predictability.
The pendulum is now swinging toward hybrid architectures that balance elasticity with sovereignty. For many SMEs, this means combining the agility of cloud services with the performance and assurance of on-premises systems.
Hybrid models allow businesses to determine where specific workloads and data sets should reside — based on sensitivity, compliance requirements, or latency needs. Financial data, for instance, may stay within a UK data centre for regulatory reasons, while less sensitive analytics workloads run in the public cloud.
Next-generation infrastructure
Vendors offering deterministic, low-latency switching and embedded automation are emerging as enablers of sovereignty. Determinism ensures predictable performance which is vital for time-sensitive operations, while automation reduces the human error that often undermines security.
Modern networking platforms integrate telemetry, AI-driven analytics, and policy-based orchestration to deliver visibility and governance across hybrid estates. The result is a more transparent, self-healing infrastructure which complies with regulatory frameworks and strengthens operational resilience.
For SMEs, advances in software-defined networking (SDN) and edge computing mean that sovereignty-grade performance can be achieved without enterprise-scale budgets.
But common sense also has a role to play. SMEs can allow employees access to ChatGPT, for example, but if they upload some of the content they create into an AI for translation or summarisation, this can spread the company’s intellectual property worldwide. Good advice from installers can help with identifying the best approach in designing a network, so a solution can be found quickly, but training employees is essential.
Turn compliance pressure into competitive power
Ultimately, the conversation around digital sovereignty is about empowerment. For too long, smaller businesses have viewed compliance as a cost of doing business rather than a source of differentiation. But in a digital economy built on trust, sovereignty can be a powerful lever of growth.
A sovereign digital strategy allows SMEs to transform regulatory pressure into competitive advantage. It enables them to assure customers that their data is safe, their systems resilient, and their operations transparent, and in the wake of the AWS outage it’s clear that dependence without control is a risk few businesses can afford. Written By Richard Jonker, VP Marketing & Business Development, NETGEAR Enterprise
