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In 2020, Google Cloud signaled to the industry its plans to make big investments in data sovereignty the term for hosting cloud data in the same country where its users reside particularly in Europe and Asia, where data-privacy regulations are strictest.

Leaked internal documents that Insider viewed show that Google Cloud sees an initiative called "trusted partner cloud," or TPC, as the linchpin of this strategy. The push toward TPC entails Google Cloud partnering with local data-center providers in certain countries, the better to reassure customers that their data is being stored in accordance with local regulations. Those data-center partners would provide Google Cloud's platform services out of their own facilities.

An internal site for employees, dated August 30th, makes clear that TPC is a major bet for Google Cloud, calling it the "most important program" of 2022 for the division. In an internal FAQ dated August 9, Google Cloud estimates that data sovereignty is a $100 billion market.

"We either do this or risk half of our market share," the FAQ said.

Tech companies have been scrambling to help European customers comply with regulations like the General Data Protection Regulation. Court decisions like Schrems II in 2020 also restrict international data transfers between the US and Europe. Likewise, Asian countries including China, Indonesia, and Vietnam have laws that require sensitive data to be stored on servers within the country.

The organization-wide mandate to employees was to drop everything and make Google Cloud's services work for TPC by the end of the year, said an employee, who spoke on condition of anonymity because they aren't authorized to speak to the press. They added that this can be a challenge since many of these services were designed to work on Google's hardware rather than other data centers.

Google Cloud's FAQ said that TPC potentially required "invasive and disruptive changes to our production infrastructure and operational models" and that "if GCP can't evolve its operating model to meet these new requirements, we face being left behind in half the world."

Google Cloud has already been investing in data sovereignty in Europe for years, starting with a commitment to European businesses in 2019. It has partnered with T-Systems to offer a sovereign cloud in Germany and with Thales to offer a sovereign cloud in France. It also launched data sovereignty control features for European customers last year.

TPC would allow Google Cloud to better compete with Microsoft, which announced a similar product in July and operates similar partnerships in countries like France, Germany, and China.

"The lack of European hyperscale providers means that most European companies must negotiate with US-based companies," a Google Cloud internal deck from August 2021 about tech executives' perspectives on data sovereignty in Europe said. "Microsoft is perceived as ahead in terms of willingness to customize individual contracts, though AWS has improved."

Google's TPC project builds on its plans for a sovereign cloud in Europe, giving customers the choice of where to host their data. The documents Insider viewed, which were dated from June, show that Google Cloud plans to launch that European cloud service in different countries through 2023 and 2024.

TPC itself will aim for "region readiness" through the end of 2023, including launching data centers in Paris, the documents say. Meanwhile, Google Cloud plans to launch a "TPC Lite" program to let users host their data in Google's existing data centers in some countries.

The full version of TPC plans to offer features such as the ability for only personnel based in a certain country to handle data stored in that region; heightened data security; and tighter control over where data physically resides.

"Acting quickly and addressing the market not only lets us address these customers but gives us an opportunity for differentiation from our competitors," the FAQ said.

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Google Cloud Bets Big on Europe and Asia With Data Sovereignty Cloud - Business Insider