Salesforce has recently announced the launch of its Hyperforce EU Operating Zone, working with the Hyperforce cloud platform. Thanks to this move, Salesforce can now sell its products, along with customer and technical support, using only EU delivery resources and data storage. Compared to the past, EU customers now have an option to have all of the vendor’s services delivered entirely in Europe and under a one-umbrella offering directly, rather than via third-party ecosystem partners.
Salesforce is following the path trodden by other US-based cloud and software-as-a-service (SaaS) providers, needing to respond to the shifting attitudes from customers and regulators in Europe on working with US-based vendors. Overall, the launch of the EU Operating Zone should also help Salesforce mitigate its international operations risk profile, as noted in its annual report.
Hyperforce Will Help Salesforce Deal With EU Regulatory And Legal Challenges …
Salesforce’s EU Hyperforce instance will help its ability to attract and retain customers operating in the EU. With the trans-Atlantic Data Privacy Framework’s enforcement coming up later in 2023 and an activist-focused legal climate in the EU, the Hyperforce EU Operating Zone will help Salesforce better meet EU regulations. Salesforce has been pursued over alleged GDPR and national-regulation privacy violations in the Netherlands and the UK. While Salesforce has successfully defended many of these, the Hyperforce option will help it better stay on the right side of EU privacy legislation by having a more clearly delineated operating environment from the wider US-based SaaS offerings that it already has.
… But This Big Bet To Change Perception Is Unlikely To Impress Holdouts
Salesforce is moving with the times and replicating moves, such as those seen by AWS, Google, and Microsoft, to shift its operating model to face upcoming EU rules governing data flows in cloud services head on. The dedicated EU region will go some way to convincing some customers that Salesforce can better comply with upcoming sovereignty requirements. For most customers, this will allow them to happily use Salesforce in the same way that they have been without incident. For some customers, however, and, notably, many European politicians, this will not be enough, as new regulations and operating constraints are precisely designed to limit the (competitive) power of US vendors in Europe in favor of local European alternatives.
The goalposts continue to shift, and European customers will need to continue to keep a close eye on both how international digital operations platform providers respond to these regulatory changes but also on how regulators and politicians react to the moves being made by firms like Salesforce. Salesforce first announced the EU Operating Zone for Hyperforce more than two years ago. While Salesforce meets current needs, don’t underestimate further issues in establishing an enduring US-EU trans-Atlantic Data Privacy Framework, continued GAIA-X progress, and good old-fashioned protectionism from European politicians. In this context, Salesforce’s EU Operating Zone is a valid response for trying to meet genuine legal concerns, but it is unlikely to be an enduring solution, as we anticipate that the regulatory goalposts will continue to shift.
Learn more about how sovereignty is impacting public cloud and cloud-based services providers by reading The Forrester Wave™: Public Cloud Development And Infrastructure Platforms In Europe, Q1 2023, viewing EU customer references for cloud vendors, checking out my blog post on digital sovereignty, and continuing to follow my research.