From cloud-first to cloud-smart: Why Indian enterprises need a sovereign strategy

Time of India

23-06-2025

Over the past decade, Indian enterprises have quickly adopted the cloud and are now embracing a cloud-first approach to accelerate their digital transformation. But today, the conversation is shifting. With rising compliance demands and geopolitical concerns, this strategy to gain agility and scale is being re-evaluated. This transition from "cloud-first" to "cloud-smart" is especially relevant in a country like India, where there is growing emphasis on digital sovereignty.
In the early phases of digital transformation, the cloud-first model was effective. It prompted companies to update their IT systems, migrate workloads more rapidly, and respond to business demands more quickly. However, soon, a lot of businesses began to face difficulties. They discovered that not all workloads are suitable for the public cloud, including performance bottlenecks for applications sensitive to latency, and soaring costs. Businesses began to encounter increasingly complex challenges related to data control, security, and regulatory compliance as digital systems evolved.
Cloud-smart: Optimizing for control, and compliance
A
cloud-smart strategy
involves the judicious usage of cloud resources. It emphasizes choosing the right deployment model, which is either public, private, hybrid, or
sovereign cloud
, based on regulatory obligations and the organization's workload requirements. Gartner predicted that by 2023, 60% of all organizations that had adopted a cloud-first policy would seek out a more balanced, cloud-smart approach to it.
This is a vital approach for India. The Digital Personal Data Protection (DPDP) Act mandates strict guidelines for localization and data handling. Sectoral regulators such as the RBI and IRDAI have introduced data residency requirements for financial and insurance data. In this context, data storage with processing overseas might not always be a viable or compliant option when depending on foreign hyperscalers.
Why sovereign cloud is becoming non-negotiable
Digital sovereignty is having national jurisdiction over data and digital infrastructure. While global cloud platforms offer scalability and innovation, they bring challenges. With escalating cyber threats, enterprises and governments are prioritizing control over security. India recorded over 1.6 billion cyberattacks in 2023 alone. Enterprises now face risks due to foreign surveillance laws, such as the U.S. CLOUD Act. Hyperscalers worldwide, even with technological prowess, cannot often provide a guarantee of jurisdiction.
In contrast, a sovereign cloud ensures data is stored, processed, and managed under Indian laws within Indian borders. It allows enterprises to control their digital assets and aligns itself with the vision of the government for a self-reliant digital India.
The problems with relying on global hyperscalers
Many CIOs and CTOs are now rethinking how their infrastructure is set up, especially when it comes to critical workloads. It's becoming harder to ensure that data stays within India and keeps up with changing local regulations. There's also a growing security concern, with limited visibility into where exactly data is stored or who might have access. Moreover, using proprietary tools often leads to vendor lock-in, making it tough to switch providers when needed. Shifting global politics poses the constant risk of foreign policy changes. This can disrupt access to essential data or services. These concerns are pushing tech leaders to look for smarter, more resilient strategies that offer better control and resilience.
The roadmap for enterprise leaders
1. Give hybrid and multi-cloud architectures top priority: Use a combination of sovereign, private, and public cloud services. While less sensitive workloads can use global infrastructure, sensitive data can remain in India, providing flexibility and ensuring compliance.
2. Integrate Compliance by Design: Ensure your cloud strategy incorporates Indian data protection laws from the outset. Decide on deployment models based on the sensitivity of the data. Collaborate with suppliers who provide clear data residency controls.
3. Reduce Vendor Lock-In: Use infrastructure-agnostic tools, containerized apps, and open standards. To maintain resilience and bargaining power, design systems with portability in mind.
4. Make Security and Observability Better: Implement strong encryption methods, keep track of your own encryption keys, and make sure that data flows between platforms are always being watched and audited.
5. Partner with cloud providers based in India: Local cloud partners can give you sovereign infrastructure, faster support, and a better understanding of the rules and regulations. Look for providers that MeitY has approved for government and BFSI workloads.
Looking ahead
The cloud will be the cornerstone of India's projected $1 trillion digital economy by 2027. However, this foundation needs to be based on compliance, sovereignty, and smart architectural decisions. The cloud-smart approach is a strategic necessity rather than merely a tactical change. In addition to future-proofing their operations, businesses that adopt a sovereign-first mentality will also support India's larger goal of technological autonomy. The time has come for IT leaders to review their cloud strategy and establish sovereignty as a key component of their digital approach.