Part 2 of 8. Part 1 covered how renting replaced buying.
What this post covers
- How the price gets set once leaving is hard.
- Where the profit is taxed.
- Whose law applies to your data.
- How trade decisions reach your kit.
- What happens if a service simply stops.
1. The price follows your exit cost
Start with the one most organisations have already had.
In 2023 Broadcom bought VMware. VMware makes the software used to run many virtual servers on 1 physical server.
Broadcom then stopped selling permanent licences. Customers had to shift to subscriptions.
Prices went up sharply for a lot of them. AT&T said in court papers its costs were set to rise by about 1,050%.
CISPE is a trade body for European cloud providers. It has complained to the European Commission about the changes, using figures of a similar size.
In March 2026 CISPE complained again, after the European partner programme was shut. The Register reported what providers made of it.
Nothing unlawful has been proven here. The complaints are still being looked at.
But the pattern is plain enough to learn from.
A renewal is a negotiation. Your position in it rests on 1 thing: how easily you could walk.
If walking would take you 3 years, you have very little room to say no.
This is not just about American suppliers, mind. Any supplier in that position has the same advantage.
2. Where the profit is taxed
The second cost is harder to see.
Plenty of large technology companies sell to customers in 1 country and book the profit in another.
The local company is often treated as a service provider to its parent. Most of the profit goes elsewhere.
So you get big sales in a country and a small tax bill in that country.
TaxWatch is a research group in the United Kingdom. It reckoned that 7 large technology groups made close to £15 billion of profit from UK customers in 2021. It estimated their arrangements knocked around £2 billion off the UK corporation tax due.
Europe has taken these arrangements on. The results are mixed, and it is only fair to show both sides.
- Apple lost. In September 2024 the Court of Justice of the European Union confirmed that Irish tax arrangements were unlawful state aid. Ireland got back around €14 billion.
- Amazon won. In December 2023 the same court threw out the European Commission’s appeal in a similar case about Luxembourg.
There is a global agreement as well, called Pillar Two. It sets a minimum tax rate of 15%.
In January 2026 the Organisation for Economic Co-operation and Development published a side-by-side arrangement. Under it, companies headquartered in the United States follow United States rules instead of most of the global ones.
Some countries tried their own digital services taxes. Canada passed one, then dropped it in June 2025 after the United States called off trade talks over it.
So the money is earned in one place. Where it gets taxed is settled somewhere else.
3. Whose law applies
This one gets misunderstood more than any other, so it is worth being exact.
Plenty of people believe that keeping data in Europe keeps it under European law and nothing else.
That is not quite right. What counts is who controls the company holding it.
The CLOUD Act is a United States law from 2018. It requires a United States provider to hand over data it controls, wherever that data sits. The Department of Justice sets out the detail.
So a data centre in Frankfurt, run by a company owned in the United States, can still be reached by a United States legal order.
“Our data stays in Europe” and “our data is outside United States law” are 2 different statements. Careful suppliers only make the first.
The rules here are shifting too, in both directions.
Section 702 is a United States surveillance law. It ran out on 2026-06-12 when Congress did not renew it.
That does not mean collection stopped. Approvals already granted carry on until they expire, expected to be around March 2027. The Brennan Center keeps track.
There is also the EU–US Data Privacy Framework. It lets personal data move from Europe to the United States.
A legal challenge to it was thrown out in September 2025. That decision is now under appeal.
The framework is good law today. It is also the third of its kind, because the 2 before it were struck down.
If a transfer arrangement fails, the cost lands on the European organisation using it. In 2023 the Irish Data Protection Commission fined Meta €1.2 billion over transfers to the United States.
There is a calm, practical answer to all this, and it is worth knowing.
If your provider holds the keys to your data, your provider can answer a legal order.
Hold the keys yourself and the order has to come to you instead. As such, the decision sits under your own country’s law.
4. Trade decisions reach your kit
Technology is part of trade policy now.
In January 2026 the United States put a 25% tariff on a narrow group of advanced computer chips and the products containing them. A second stage has been signalled.
Whether your own kit is caught changes over time. Your supplier is the right one to ask.
Trade relationships can turn quickly, too. Talks between the United States and Canada broke down on 2026-08-22, with new tariffs of 50%. Canada announced measures in reply.
The Canadian Prime Minister set out the reasons publicly.
The point for you is a narrow one, and it does not rest on anybody’s politics.
The cost and availability of kit can change because of a decision taken in another country, at short notice.
Worth allowing for in a 3-year plan.
5. A service can stop for reasons that are not yours
This last one is unlikely for most organisations. It is here because it works differently from the rest.
In February 2025 the United States put sanctions on the Prosecutor of the International Criminal Court.
The Prosecutor then lost the use of his Microsoft email account, and moved to a Swiss provider.
Microsoft’s president said publicly that the company did not close the account. Exactly what happened is still disputed, and it is only fair to say so.
What is not disputed is the effect. The German technology publication heise reported it as a turning point for digital sovereignty in Europe. It was raised in the European Parliament.
By late 2025 the Court had moved to openDesk, an open source alternative.
It is the mechanism that matters here.
No unpaid bill. No rule broken. Nowt wrong with the service.
A government took a decision, and a supplier had to work out what it could lawfully carry on providing.
Your agreement is with your supplier. Your supplier’s legal duties are to its own government.
You cannot monitor for this. There is no warning light on a dashboard.
For most readers the risk is small, and accepting it is reasonable. It is only reasonable if you have thought about it.
The pattern across all 5
These 5 costs are very different from one another.
You will most likely meet the first. You may never meet the last.
But they share 1 thing.
Every one of them gets worse the harder it is for you to leave.
A price rise is a nuisance if you have somewhere to go. It is serious if you have not.
That is the thread running through the lot, and it points somewhere useful.
The question worth working on is not which country your supplier sits in. It is how quickly you could change your mind.
Part 3 looks at who else pays for the software you use.
First published: 2026-08-25. Last updated: 2026-08-25.