Oracle CTO and President Larry Ellison expects a widespread shift toward national sovereign cloud setups in the coming years as governments step up their efforts to keep data in-country.
Ellison made the prediction on a recent earnings conference call during a discussion about demand for Oracle's cloud regions, pointing to strong government interest in sovereign cloud services.
“Virtually every government will want a sovereign cloud and a region dedicated to that government,” Ellison said.
Ellison believes Oracle is well positioned to win that type of business by leveraging Oracle Cloud Infrastructure (OCI) to provide dedicated, independent cloud regions for governments at the national and state levels.
“We have several countries where we are negotiating … sovereign regions with the national government,” Ellison said.
Ellison used Oracle's current activities in Japan as an example, explaining how the popularity of Oracle Cloud in the region was going to have a knock-on effect on certain large sectors such as the automotive industry or telecommunications.
The ability for Oracle customers to “add their own services” into Oracle's cloud regions makes them attractive to these sectors, he noted due to the fact that they are sovereign, highly secure and profitable.
This makes them perfect for customer use cases that need to maintain a level of control over data sovereignty.
In the long term, Ellison suggested that Oracle could position itself as the go-to cloud services provider for the government and public sector. While enterprise customers remain core to the company, CEO Safra Catz noted in the same earnings call that the company is the “only provider” to offer a complete cloud ecosystem of sovereign and customer-dedicated clouds.
This puts the company in a strong position to leverage its audience of sovereign cloud customers in the public sector who want to establish themselves in a national cloud region rather than a global one.
Darío Maisto, senior analyst at Forrester, said ITPro Ellison's comments point to a shift in focus for Oracle as it steps up its efforts to work closely with national governments and find its niche in an increasingly competitive global market.
“[Oracle] “They are likely to increase the proportion of their income coming from the public sector,” Maisto said.
That said, Maisto is careful to point out that this is a product that addresses the specific concern of digital sovereignty and therefore lends itself to a more specialized market.
“Selling to countries will work well to expand your business in industries where digital sovereignty concerns are of paramount importance,” he added.
Oracle is stepping up its sovereign cloud efforts
With data sovereignty concerns a recurring theme in recent years, cloud sovereign regions are increasingly emerging as practical solutions to concerns about the legal and regulatory implications of the cloud.
Ellison touched on moves Oracle itself has been making for some time, with one of the most significant developments taking place in 2023, when presented a sovereign cloud region in Europe.
As countries and regions increasingly express concerns about the location of cloud companies' data processing, it makes logical sense for governments themselves to turn to sovereign cloud services.
“Public cloud is no longer taboo for public sector organizations, public agencies and governments,” Maisto said. “Public cloud providers are doing everything they can to comply with local regulations and make their offerings compliant with digital sovereignty restrictions.”
“So yes, the public sector is becoming more attractive and more and more cloud providers are focusing on public sector organizations,” he added.
Rackspace became the latest company to target a sovereign cloud offering directly to the public sector.announcing its UK Sovereign Services platform to provide dedicated computing and storage 'Pods' for various public sectors.
Private companies are increasingly demanding more sovereignty as well to meet strict compliance standards regarding data location.
Microsoft, for example, has been criticized for the time it took to fully implement its data sovereignty plans in Europe.
