Article | September 4, 2026

Hybrid cloud as a data sovereignty strategy

As data sovereignty laws tighten globally, enterprises need a cloud strategy built for compliance, cost, and flexibility

Most enterprise cloud strategies were built on the assumption that data moves freely, but many leaders are reexamining that premise as data sovereignty rules tighten. Across North America, Europe and Asia, new and evolving data sovereignty policies increasingly determine where critical data resides.

At the same time, the infrastructure that stores and computes that data keeps getting more expensive. Memory shortages drive up hardware prices, and third parties adjusting their pricing models compound maintenance costs.

As a result, many CIOs and CTOs are navigating the challenges of complying with tighter data rules while containing costs. A third challenge compounds both: executives must also decide where to place workloads.

“Ecosystems need to embrace a workload mix to underpin their business outcomes,” said Andy Haigh, Head of Cloud & Infrastructure Offering at DXC Technology. “The reality is not public vs. private — it is about enabling the outcome whilst orchestrating all forms of workload as one.”

DXC Private Cloud+ addresses this bind directly, giving enterprises the control of private cloud and the flexibility of public cloud without the complexity of managing an either-or and it’s generally available today.

The solution runs on Dell's purpose-built infrastructure paired with DXC OASIS's agentic AI operations platform. Together, they keep data sovereign, cut infrastructure costs, and let enterprises move workloads between private and public cloud without re-engineering them.

The sovereignty squeeze, region by region

The push toward data sovereignty is part of a growing global trend. In June, the European Commission proposed the Cloud and AI Development Act, which would require any cloud provider serving EU public-sector customers to meet one of our four sovereignty assurance levels – formalizing “sovereign cloud” as a regulatory requirement rather than a marketing term.

The same month, Canada introduced a bill, the Protecting Privacy and Consumer Data Act, which if passed, would explicitly cite digital and data sovereignty as a national priority. And Australia’s Privacy Act, with its 13 Australian Privacy Principles, continues to tighten how personal data can be stored and processed offshore.

But compliance isn't the only reason business leaders are looking to keep their data close.

As enterprises build out their AI strategies, the data fueling those models increasingly lives in private environments. A 2026 survey found that 79% of organizations have already moved AI workloads away from public cloud, with nearly three-quarters planning to shift further toward on-premises or hybrid infrastructure within two years.

AI thrives where the data lives. Rather than designing enterprise AI around a default platform preference, teams should design it around the data itself – factoring in where trusted enterprise context lives, how sensitive it is, how quickly they must act on it, and what it costs or risks to move.

"Our customers don't want to choose between flexibility and control," Andy said. "Private Cloud+ gives them both — the agility of public cloud with the governance of private."

Strategic exit from costly enterprise data centers

Another reason to consider a hybrid cloud option is cost. Data centers owned by individual enterprises are capital-heavy and increasingly expensive to maintain, but walking away from them isn't simple.

Hybrid cloud offers a practical path out. With DXC Private Cloud+, traditional workloads can move quickly into private cloud, without the costly and often complex re-engineering that public cloud often requires.

Once those workloads are migrated, teams can take their time deciding what stays in private cloud and what eventually moves to public cloud.

"It's a dual hop," Andy explains. "Private cloud doesn't compete with public cloud in that scenario. It enables it."

Enterprises save in multiple ways. They stop funding their own hardware refreshes, avoid the expensive re-engineering public cloud demands, and offload day-to-day operations to DXC OASIS. What's left is a predictable, managed service running on Dell infrastructure, without the capital burden of owning the tin.

Flexibility over lock-in

Licensing costs for virtualisation software have surged, and many enterprises find themselves locked into terms they didn't anticipate.

DXC Private Cloud+ offers a way out. Customers can move their workloads onto Dell infrastructure under DXC's license agreement and pay only for what they consume.

"We hold the license, we run the infrastructure, and customers pay only for what they use," Andy says. "It's cloud simplicity with private cloud control."

Modern infrastructure without the price tag

Hardware and memory costs are other factors weighing on CTOs and CIOs. Prices have risen sharply and continue to climb, with vendors holding quotes for just two to three weeks.

Rather than buying new hardware and memory at inflated prices, enterprises can move onto DXC Private Cloud+, which already runs on modern infrastructure. Where a customer might require seven aging servers they own to run workloads, Private Cloud+ can handle that same work on one, using less power, less network, and fewer people to manage it.

"The savings compound, server by server," Andy says.

One environment, one set of rules under DXC OASIS

DXC OASIS reimagines operations across all workloads, public to private. It automates high-volume, low-risk tasks, intelligently triages and orchestrates workflows, and gives teams real-time visibility across the estate in business context. Human-in-the-loop governance anchors every critical decision.

It also unifies Infrastructure as Code, Policy as Code, and platform engineering into a single layer, so teams can shift workloads across environments without rearchitecting for each one. That same flexibility helps them adapt as regulations and compliance guardrails evolve, whether the driver is sovereignty, AI, or both.

DXC OASIS is the agentic AI operations layer that runs Private Cloud+, integrating private and public into one hybrid ecosystem.

Bottom line

For CIOs caught between sovereignty mandates and infrastructure costs, Private Cloud+ offers a real advantage. It absorbs regulatory complexity and establishes the necessary controls, while aligning with the wider ecosystem strategy and working seamlessly with public cloud. It also insulates workloads from rising third-party costs.