The Sovereignty Gap: Why UK Data Is Exposed in US-Owned Clouds

A primary limitation for UK businesses using US-owned cloud storage is the sovereignty gap created by the US CLOUD Act. This 2018 law allows US authorities to demand access to data controlled by US companies, regardless of where it is stored. This means your data in a UK-based data centre is not exempt from US jurisdiction. This legal conflict puts UK firms in a difficult position, risking non-compliance with UK GDPR, which governs data transfers. Choosing a provider with strictly EU-centric governance eliminates this risk entirely. True data sovereignty is a legal reality, not a marketing claim based on server location. This jurisdictional risk is a critical factor for over 80% of compliance officers in 2025.

This fundamental conflict creates unavoidable compliance challenges for businesses in regulated sectors. The following are key areas of exposure:

• Legal jurisdiction conflicts with UK GDPR Article 48.
• Risk of data access without notification to the UK data owner.
• Inability to guarantee data residency under EU legal frameworks.
• Exposure of sensitive intellectual property and client data.
• Increased complexity for Data Protection Impact Assessments (DPIAs).

Understanding this distinction is the first step toward building a truly resilient and compliant data strategy.

Economic Constraints: The Problem of Unpredictable Egress and API Fees

Beyond compliance, UK businesses face significant economic limitations from hyperscaler pricing models. Unpredictable costs for data egress and API calls create major budgeting challenges, impacting total cost of ownership by up to 60%. These variable fees penalise businesses for accessing their own data, hindering multi-cloud strategies and data mobility. This model directly contradicts the principles of the new EU Data Act. A predictable, transparent model with zero egress or API fees offers a stable financial foundation. This allows for accurate forecasting, with some partners seeing a 40% improvement in margin predictability. You can learn more about hidden cloud costs in our detailed guide.

This pricing complexity actively discourages efficient data management and creates vendor lock-in. The EU Data Act, applicable from September 2025, is designed specifically to dismantle these barriers. This new regulation prepares the market for a more equitable cloud landscape.

The EU Data Act: Mandating a Fairer, More Portable Cloud Future

< p>The EU Data Act, fully enforceable from September 12, 2025, introduces a new reality for cloud providers and their customers. It mandates that users must be able to switch providers easily and phases out switching charges, including egress fees, entirely by 2027. This legislation makes data portability a legal right, requiring providers to offer clear exit paths without financial penalties. For many UK businesses, this is a chance to escape cloud vendor lock-in. Providers whose business models rely on these fees face a significant operational challenge. A storage architecture that is sovereign and predictable by design is already compliant with these future-facing rules.

Key requirements of the EU Data Act for cloud providers include:

1. Removing all commercial and technical obstacles to switching services.
2. Providing all exportable data in a structured, machine-readable format.
3. Phasing out all switching charges within a defined 3-year timeframe.
4. Offering transparent contracts that facilitate easy termination and migration.

This shift empowers UK businesses to choose solutions based on value, not contractual entrapment.

Architectural Limits: The Hidden Risks of Complex Storage Tiering

Many hyperscaler storage platforms rely on complex tiering, moving data between hot, cool, and archive layers. While seemingly cost-effective, this model introduces architectural limitations and operational risks. Restoring data from archival tiers can take hours, incurring unexpected fees and delaying critical recovery operations by up to 24 hours. This latency is unacceptable for ransomware recovery or urgent data analysis. An “Always-Hot” object storage model ensures all data is immediately accessible without restore delays. This simplifies operations for over 95% of backup and disaster recovery use cases. This approach aligns with a modern Azure storage evaluation framework.

This simplified, always-accessible architecture provides several key advantages:

• Eliminates restore fees and unpredictable retrieval delays.
• Reduces operational complexity and the risk of lifecycle policy errors.
• Ensures third-party backup tools like Veeam and NovaBackup function without API timeouts.
• Provides consistent, predictable performance for all data workloads.

This resilience is essential for meeting the stringent demands of modern data protection strategies.

NIS-2 Compliance: Securing the Digital Supply Chain

The EU's NIS-2 Directive, with enforcement beginning in 2025, raises the bar for cybersecurity across 18 critical sectors. It mandates robust risk management, 24-hour incident reporting, and stringent supply-chain security. For UK businesses, this means vetting every provider, including cloud storage, to ensure end-to-end compliance. Using a non-EU provider adds layers of complexity, making it difficult to verify the security posture of their entire supply chain. Personal liability for management under NIS-2 makes provider selection a board-level concern. A European provider operating under these same regulations offers a clear advantage. This simplifies the path to demonstrating due diligence and securing your digital ecosystem. For those considering a change, understanding how to handle migrating from Azure is a key first step.

A Partner-Ready Solution for the UK Channel

< p>For UK MSPs, resellers, and system integrators, these hyperscaler limitations represent a significant opportunity. Offering a sovereign, predictable, and compliant storage solution is a powerful differentiator. Impossible Cloud is partner-ready, providing the tools for success. With our new UK distributor, Northamber plc, access for UK resellers is more streamlined than ever. Predict able margins are built-in, as there are no egress or API fees to erode profitability. The multi-tenant console, full API/CLI automation, and simple onboarding process enable partners to scale their Backup-as-a-Service (BaaS) and archiving offerings quickly. This allows partners to build services that are more competitive than typical Azure storage UK providers.

Our partner program is designed for growth and simplicity:

• Guaranteed margins with a zero-egress-fee pricing model.
• A multi-tenant console with robust IAM, RBAC, and MFA controls.
• Full automation capabilities via a 100% S3-compatible API and CLI.
• Dedicated support for fast onboarding, completed in under 24 hours.
• Joint marketing and sales support through our UK distribution channels.

This approach empowers our partners to deliver true data sovereignty and value to their clients.