EU cybersecurity vendors grow 35% as firms prioritize digital sovereignty

European firms shift spend to EU cybersecurity vendors

A report from research firm Context, cited by TechRadar, shows EU-based cybersecurity vendors grew sales by 35% over the two years ending in Q3 2026. The overall market expanded by 10% in the same period, while US vendors saw only 8% growth.

US providers still hold 62% of the EMEA cybersecurity market. Their dominance remains strongest in identity and access management and cloud security, areas where European alternatives have gained less traction.

European enterprises show the strongest demand for local vendors in security awareness training, vulnerability management, and security information and event management (SIEM). These segments align with sectors where data residency and control are top priorities.

Concerns about digital sovereignty are reshaping procurement. Nearly half of European firms—45%—plan to add or replace IT suppliers due to sovereignty requirements within the next 18 months. In North America, only 30% of enterprises report similar plans.

Digital sovereignty claims lack regulation. An Omdia report from October 2026 found 28% of providers do not disclose proof of their sovereignty, and there is no oversight of such claims. Research VP Joe Turner notes that buyers increasingly ask who controls encryption keys, who can access sensitive logs, and where data is stored.

Transparency gaps persist despite local preference

The Context report’s findings echo an earlier investigation by Lighthouse Reports, which revealed that most European data centers refuse to disclose energy and water usage. Both cases highlight a pattern in EU tech infrastructure: a preference for local providers alongside persistent gaps in transparency and regulation.

What this means

Lazyfounder analysis — our interpretation, not reported fact.

The shift toward EU-based cybersecurity vendors reflects a broader tension between compliance risks and practical vendor performance. Founders expanding into Europe now face a two-tier market: US providers still lead in critical areas like cloud security and identity management, while local vendors are gaining traction in training, vulnerability management, and SIEM. The lack of regulation around sovereignty claims means operators must conduct their own due diligence—auditing encryption key control, log access, and data storage—rather than relying on marketing labels. For startups selling into Europe, this trend could open doors if they can credibly demonstrate sovereignty without sacrificing feature depth or scalability.

Key takeaways

• European cybersecurity procurement is splitting into sovereign-sensitive and US-dominated segments, forcing vendors to pick a lane or invest in dual compliance.
• 45% of European enterprises plan to add or replace IT suppliers for sovereignty reasons within 18 months, a near-term sales opportunity for local vendors.
• Sovereignty claims lack regulation, so founders must verify encryption key control, log access, and storage location directly with providers.
• US vendors retain 62% of the EMEA market, particularly in identity and access management and cloud security, limiting the scope of displacement.

Related on Lazyfounder

• EU data centers refuse to disclose energy and water usage, investigation finds
• More business news