The first instalments of this insight series addressed the importance of interconnectivity and data sovereignty for the Caribbean. This insight addresses cloud readiness. At its core, cloud readiness refers to the ability of an organization, country or entire region to effectively adopt and benefit from cloud-based technologies. This includes having the right digital infrastructure, policies, skills and cybersecurity measures in place. For the Caribbean region, the cloud represents a strategic enabler for sustainable growth, digital inclusion, data sovereignty and resilience. 

Cloud benefits 

The cloud has already significantly reshaped how governments and other organizations utilize IT resources, emphasizing cost savings, agility, scalability and improved service delivery. By shifting from traditional, capital-intensive IT infrastructure to cloud-based models, organizations can now access on-demand services, which are both flexible and efficient. This shift allows them to pay only for the resources they use, reducing the need for large-scale investment in rarely used infrastructure and enabling dynamic scaling based on actual demand. Furthermore, the cloud accelerates innovation by simplifying the adoption of advanced technologies such as AI and machine learning, leading to faster data-driven decision-making and more integrated collaboration. 

A robust cloud ecosystem—supported by reliable infrastructure and seamless connectivity—also enhances the Caribbean’s appeal to digital entrepreneurs and remote workers, including digital nomads, who rely on secure and accessible digital environments. Crucially, the cloud additionally strengthens disaster resilience by enabling off-site data backups, remote access to critical systems and faster recovery in the event of natural disasters. 

There are also cloud pitfalls 

While the cloud has its benefits, it also presents some challenges for small Caribbean island states.  

The Caribbean region still faces limitations in its digital infrastructure, for example resulting in slow internet speeds, limited internet coverage or lack of redundancy in undersea cable connections. When governments rely on cloud-based systems to deliver essential public services – such as tax filing or disaster response portals – any internet outage or slowdown can interrupt access to these services. Data sovereignty is another concern, as hosting sensitive information in foreign owned public clouds can raise legal, compliance and national security risks. Additionally, long-term cloud costs and vendor lock-in can strain both public and private sector budgets. Public cloud providers are not always transparent about pricing structures and costs can escalate over time due to increased usage, hidden fees or changes in pricing models. 

Caribbean cloud adoption 

Cloud adoption across the Caribbean region is steadily growing, with revenue in the public cloud in the Caribbean market projected to reach US$1.19bn in 2025 and an annual growth rate of 17,9%. This growth is driven by the need for improved public services, resilient infrastructure and economic diversification. According to PwC’s 2024 Caribbean Digital Readiness Survey, digital transformation is a top priority for both public and private sector leaders, though many organizations remain in early or developing stages of implementation. Moreover, UNDP digital readiness assessments conducted in several Caribbean countries, highlight critical gaps in digital infrastructure, talent and policy frameworks, while also pointing to a growing momentum and strategic commitment. 

The region’s overall digital readiness is marked by high ambition with various levels of execution – offering significant potential if governments can align infrastructure investments with capacity building and clear digital governance strategies. However, many Caribbean governments utilizing the cloud still rely primarily on hyperscale cloud providers – Amazon (AWS), Microsoft (Azure), and Google (Google Cloud) – for their data and cloud needs. These three account for approximately 67% of the cloud infrastructure services market globally in Q2 of 2024. The dependency on these commercial, non-local cloud service providers has started to raise concerns globally, and also in the Caribbean. 

Hybrid cloud and need for Caribbean federated cloud 

To address the risk of losing control over data in the public cloud (U.S. CLOUD Act), Caribbean governments and organizations can turn to a hybrid or private cloud model. This approach allows organizations to balance flexibility with control, ensuring that sensitive workloads – such as those involving personal data – remain on dedicated infrastructure within a local data center to maintain data sovereignty, while still benefiting from the scalability and efficiency of the cloud. 

In order to truly safeguard regional digital autonomy and foster collective resilience, the Caribbean additionally requires a federated cloud – a shared infrastructure model that connects national or island-specific clouds under a common governance framework. This will allow governments and organizations within the region to share resources, standardize data protection practices to improve cybersecurity and reduce reliance on foreign providers, while retaining control over their own data. A Caribbean federated cloud would also support cross-border services, regional collaboration and disaster recovery capabilities. 

A Caribbean federated cloud 

To develop a Caribbean federated cloud, the region can draw inspiration from Europe’s Gaia-X initiative. Gaia-X was designed to ensure data sovereignty and interoperability by creating a common framework where cloud providers operate under shared principles for data protection, access control, transparency and cybersecurity. Rather than building an entirely new infrastructure, Gaia-X connects existing cloud and edge providers through standardized interfaces and governance models. This allows organizations that either offer or use digital services within the federated cloud ecosystem to participate while maintaining control over their data. 

The Caribbean can take a similar approach to Gaia-X by adopting open standards, shared policies and a governance structure based on mutual trust and national sovereignty – regional governments can collaborate. Coordinated policies around cross-border data flows, compliance and security would ensure seamless data exchange between nations, while each country retains control over its own infrastructure and services. A Caribbean federated cloud model would enhance digital autonomy, empower regional innovation and give the region’s nations a stronger leverage when negotiating with global technology providers – all the while promoting digital resilience and economic growth.