Microsoft has added new controls to its Sovereign Cloud. A trusted EU partner will oversee Microsoft engineers' remote access to production systems. A tamper-evident ledger will record that access and what was done. Customers can keep the root encryption key in hardware they own.1 These are real controls. The question is what they make sovereign.
The Controls That Make It Sovereign
Taken together, these give you real control over who can see and touch your data. Each one is something you can verify, not a promise.
Customer-held keys. External key management with Azure Managed HSM is now generally available. It lets customers keep the root encryption key in hardware they own and operate on-premises or through a trusted third party. Managed HSM already gives dedicated, single-tenant control over the keys used by supported Azure services. Microsoft does not hold the root key, so a legal demand for your stored data reaches ciphertext. This is the strongest piece.1
Data Guardian. For EU and EFTA customers, Data Guardian adds European-resident oversight by a trusted EU partner for qualifying Microsoft engineer remote access to in-scope production systems.1
Production Touch Ledger. Also in phased rollout in the EU and EFTA, it creates tamper-evident records of that access and the actions performed.1
Just-in-time Access and Customer Lockbox. These give customers additional control over access to their environments across the operator-access lifecycle.1
Sovereign Control Panel. Entering public preview at Microsoft Ignite, it shows your sovereignty posture in the Azure portal, helps you apply controls and find gaps, and helps you assess workload dependencies and portability.1
Confidential computing. Azure confidential computing helps protect supported data while it is processed, inside a hardware-based, attested trusted execution environment. That covers the gap that keys at rest leave open, for the services that support it.1
Sovereign Private Cloud on Azure Local. Customer-run environments support connected and disconnected operation, with SQL Server already available and Foundry Local and GitHub Enterprise Local becoming generally available at Ignite. For workloads that need it, the public cloud drops out of the loop.1
Sovereignty over who can see the data is not sovereignty over who can compel the vendor.
What It Does Not Control
Microsoft is still a US company. The CLOUD Act lets US authorities compel a US provider to produce data in its possession, custody, or control, wherever the server sits. A customer-held key limits what Microsoft can hand over, but it does not change who the order is addressed to. A ledger shows you what happened after the fact. It does not stop an order, a sanction, or a service suspension from reaching Microsoft's own operations.
Microsoft France has said as much. On June 10, 2025, Anton Carniaux appeared before the French Senate inquiry on public procurement.3 Asked whether data of French citizens could be passed to the US government without French consent, he answered, in our translation from the French:
“No, I cannot guarantee it, but it has never happened.”4
That is the gap in one sentence. The controls above govern what Microsoft's engineers can do. They cannot govern what a court can order Microsoft to do.
The limits are practical too. Keys protect data at rest, and confidential computing covers only supported services. Metadata and telemetry sit outside your keys. And a key held in your own hardware ties your uptime to that hardware.
Continuity is the last gap. We covered a US export directive that forced a vendor to switch off its models for every user overnight.2 If your cloud can be switched off by a decision made outside your jurisdiction, you hold a lease.
The Contract Question
So the answer is split. On visibility, the new controls are credible. On legal compulsion and continuity, nothing announced changes the vendor's exposure. Before you sign, ask your counsel two separate questions: who can read our data, and who can compel the provider to act on it or cut us off. The announcement answered the first.