Digital Sovereignty: What Took Us So Long?
Why many middle-market family enterprises don’t own their own information, and how a changing digital landscape will pave the way for owners to own again.
By Amy Hatfield
Teachers teach, nurses nurse, ballers ball, owners own and losers lose — except when things go sideways. And when that happens, sometimes owners fail to own. Instead, owners lose. In fact, for the better part of this century, we’ve failed to hang onto our own information. This information migration started in the early 2000s, accelerating from about 2010 to 2015. We lost ownership of information, a foundational piece of any family enterprise.
Or — one might argue — we gave it away.
But it’s OK because you already know what many of us watched happen. In that era, information shed its old skin and stepped into something different. It wasn’t the same, use it and manipulate it effectively and efficiently, it became part of an intangible hyperreality like other abstract things: email, online transaction, a Facebook page.
In some ways, information was unrecognizable in its new form, so it wasn’t classified as a thing to own in the same way it once was. It’s sort of like when your little one is just beginning to eat real food and falls madly in love with mashed potatoes, only to emphatically reject the same food — potatoes — in the form of a hashbrown.
To the toddler’s untrained eye, hashbrowns look so unlike the mashed version of potatoes; they aren’t potatoes at all. And to the untrained analog eyes accustomed to information captured on printed documents or legal pads, digital information housed on subscription-based online platforms wasn’t information at all.
When Information Changed Its Skin
There was, however, a transition period from print to digital, when owners relied on disks with the software they’d purchase, own and install on computer hard drives, or in some cases, internal servers they also owned, otherwise known as the Software as a Product (SaaP) era, which dominated the 1980s and 1990s.
But with the emergence of Software as a Service (SaaS), digital information became as abstract as the stars in the heavens: Both gave off light; both were out of reach. One, the stars, are trillions of miles away. The other, our information, was backlit and untouchable, housed on servers on someone else’s infrastructure. SaaS improved reliability and scalability, but it also separated access from custody. Information was still produced by the owner, but it was no longer physically or operationally under the owner’s direct control.
The emergence of AI is going to change all of that. In many ways, it already has. In fact, the dawn of AI is moving so rapidly into our everyday lives that it’s hard to say when to classify its effects as past tense or present tense. We’re in the midst of a real-time implosion of change that’s conflating the “somewhere in the near future,” with the “right now.”
All of AI's sweeping side effects are unknown and likely will be until humanity has the benefit of hindsight. But for now, we believe we’re entering the era of digital sovereignty. In 2026, our company — i3 Global Enterprises — is wrangling up what’s been roaming free. And we’re doing it for a whole host of reasons we’re about to unpack and examine.
SaaS-y Consequences: What We Lost
The widespread adoption of Software as a Service (SaaS) changed not just how software was delivered, but how information was housed and governed. Remember how we said SaaS “separated access from custody?” What does that really mean? Essentially, our critical tools, which house and manipulate a company’s private information, including legal and financial records, are all subscription-based rentals.
Despite the rental paradox, the shift to subscription-based software brought clear operational benefits: faster deployment, lower upfront costs, automatic updates and improved reliability. Plus, it took companies out of the business of creating their own operational systems and processes, arguably a drain on resources and, now that these processes were digitized and required developers who could code, there was a lack of know-how.
So this work was outsourced to software companies instead. And while the outsourcing left middle-market businesses and family enterprises with a one-size-fits-all operational solution, the advantages outweighed concerns about where information physically resided, particularly as service providers offered strong guarantees around uptime and security.
The problem? These subscription-based online platforms introduced a structural separation. Access to information remains continuous as long as the service relationship holds, but the systems that store, structure and ultimately govern the information create inherent vulnerabilities. As IT Transactional Lawyer Ward Classen writes, “the customer has ceded control over its data and is now dependent on the cloud provider for protection.”
Ownership, in this context, did not disappear outright. Instead, it became conditional —defined by contracts, service terms and technical limits. It also made attorneys like Classen indispensable for multi-million-dollar corporations that had the capital to ensure their information was protected, while middle-market companies and family enterprises like those i3 Global serves were left to rely on blanket SaaS contractual agreements.
Why the Old Tradeoff No Longer Holds
For many years, the tradeoff inherent in subscription-based software — less control in exchange for speed and convenience — was rational. But the operational needs of many middle-market companies used to require a handful of software tools. Now that “handful” has grown into a truckload: A layered web of subscriptions that draw directly from an enterprise’s operating cash, often without central oversight.
That scale now compounds cost in ways that either didn’t exist early on or weren’t as visible. Even when the number of software subscriptions required stays flat, add‑ons, AI tiers and usage‑based pricing drive costs up.
Consider these numbers:
About 75% of all software in use is subscription-based, leaving around 25% on-premises software – housed on-site vs. in the cloud, according to BetterCloud’s State of SaaS 2025 report.
106 is the average number of SaaS apps per company in 2024. Source: BetterCloud.
According to Zylo’s 2025 SaaS Management Index, businesses now spend an average of $4,830 per employee per year on software subscriptions — a 21.9% increase year-over-year. For a 100 employee middle‑market company, that translates to nearly half a million dollars annually, drawn not from discretionary innovation budgets but from core operating capital.
For middle‑market family enterprises, particularly family‑owned enterprises, these costs hit different. Without venture funding or a tolerance for prolonged operating losses, recurring software costs compete directly with payroll, capital improvements, dividends and succession planning. PwC’s 2025 U.S. Family Business Survey notes that most family firms are shifting focus toward margin protection and operational resilience, making recurring, escalating costs particularly painful.
What once felt like the purveyor of efficiencies now seems like that one dried-out gasket responsible for the slow drip of financial leakage.
Real World Example: The Everyday Business Software Stack
Below is a typical, non‑industry‑specific setup you’ll find across countless middle‑market companies.
Accounting – QuickBooks Online
Most growing businesses require the Plus or Advanced tier to handle inventory, projects, multiple users or 1099s
Typical cost: $115–$275 per month
Annual cost: $1,380–$3,300, before payroll, payments and other add‑ons costbench.com
Website & CMS – Squarespace
Businesses that need basic customization or e‑commerce often move beyond the entry tier
Typical cost: $36–$56 per month for Core or Plus plans
Annual cost: $432–$672, excluding email, transactions or marketing tools businessinsider.com
Email & Documents – Google Workspace or Microsoft 365
$12–$22 per user per month is common
Annual cost for 50 users: $7,200–$13,200
Payroll – Add‑on to QuickBooks or Separate Provider
Commonly $45–$85 per month + per‑employee fees
Annual cost often exceeds $3,000–$6,000 for mid‑sized teams ezqgroup.com
CRM (Customer Tracking) – HubSpot, Zoho, or Salesforce Starter Tiers
Often starts “free,” scales quickly
Typical paid plans: $50–$150 per user per month
Annual cost (10 users): $6,000–$18,000
Individually, these costs go down easy. But, together, you’re looking at a recurring operating expense that easily exceeds $40,000–$75,000 per year. And that’s before industry‑specific software, integrations, consultants or add‑ons.
What Digital Sovereignty Looks Like for Today’s Companies
Modern ownership is less about where information lives and more about who governs it. Control can be exercised through hardware, but it’s also gained through authority over how information is structured, retained, combined, moved and reused — independent of any single tool or provider.
Access alone is not ownership, and programming interfaces (APIs) are just bridges from one software application to another. These “bridges,” custom dashboards, role‑based permissions and exports do a solid job of creating the appearance of control. Yet, fundamental decisions reside elsewhere.
“Digital sovereignty is won on several different fronts including the server a company’s information sits on,” said Kevin Heaton, founder and principal of i3 Global Enterprises.
Heaton and i3 have spent years investing in RAAMP, an infrastructure platform designed to manage a company’s operational needs. Software built as an ERP (or Enterprise Resource Planning tool), RAAMP essentially combines the core pieces operators are often required to stitch together from multiple vendors and software subscriptions. Put another way, with RAAMP, i3 can run every aspect of its company through one software package.
“We rely on cloud computing as much as the next guy,” Heaton said. “Platforms like RAAMP benefit from the nimble conditions cloud computing makes possible — the ability to deploy a quick fix, automatic updates and reliability and access across devices.”
The difference, Heaton says, is to own the infrastructure your information is on.
RAAMP President Landrum Randolph has developed this platform in a way that makes digital sovereignty possible. “The world is fundamentally changing, and digital sovereignty is going to be the differentiator between a company renting its infrastructure or truly owning it,” he says. “And the thing is, if you don’t own your infrastructure, then you don’t own the operations of your company.”
Randolph says this does not mean you must burn the proverbial ships.
“But what I am saying is to have a lifeboat,” he says. “Having those on-premise systems and ensuring your company has the ability to easily transition from something that is 100% cloud to 100% on-premise. You need to have that ability. Sovereignty is about getting off the digital grid, but by degrees and when you choose. Leverage its nimbleness without sacrificing ownership.”
Heaton says RAAMP started as a way to solve a problem. The aim was to create an alternative that would achieve two things for i3 and its clients: own data and operational infrastructure, and two, they’d end the mounting costs of subscription-based software tools.
Still, the idea that RAAMP would succeed as a subscription-based software service for the end user at large was never in the cards.
“The capital demands were too steep,” Heaton says. “But we kept building the software anyway. Now AI has made control and ownership more feasible than we ever believed it would be.”
With AI, maintaining software is no longer a pipe dream. Before, many companies needed to rent their operational infrastructure via subscription-based software because the alternative wasn’t feasible. A company would essentially be forced to purchase and own a tool or piece of equipment it couldn’t maintain or fix. The fear was, “When the software breaks, who’s going to fix it?”
How AI Changes Feasibility
This circumstance isn’t new, and the resulting choices we make are common. For instance, most people could learn to change the oil in their own vehicles. Yet, they choose not to because they lack the resources to do it: motor oil, oil filter, oil filter wrench, socket/wrench set for the drain plug, oil drain pan, funnel, container for used oil transport, not to mention a garage or enough yard space for the project.
In these scenarios, resources can usually be acquired, just like a team of developers could be hired to maintain software, but it’s not possible to acquire the resources needed for less than it would cost to hire someone else to do it.
“With AI, companies won’t be stuck,” Randolph says. “They won’t need a group of in-house developers to maintain or fix the software they’ll soon own.”
AI is the key that turns the lock because, now, those who don’t speak the language have a translator. Heaton equates AI and its role in digital sovereignty to the central theme of Geoffrey Moore’s book Crossing the Chasm. New technologies fail, according to Moore, not because they lack value, but because they fail to cross the gap between early adopters and the practical majority.
“If you think about AI in the context of digital sovereignty, the chasm was never about awareness,” Heaton says. “It’s been about the degree of confidence, or rather lack of confidence, we’ve had in our ability to execute. AI is now poised to collapse the barriers we’ve always faced when it comes to owning our own information and getting away from mounting subscription fees. AI is helping our company and our client families cross the chasm.”
AI makes complex, distributed information systems more legible. It can observe patterns across applications, reconcile inconsistencies and assist with tasks such as classification, normalization and ongoing system maintenance. These are the data-related activities that previously required specialized technical teams or sustained external support.
“This is key,” says Heaton. “Because it’s not that the barriers are eliminated completely. But the more code a company develops and owns, the more that company will be able to leverage AI to build and maintain its systems, and the better off they’ll be in the future.”
By translating intent into working software and assisting with the detail-heavy tasks that once made custom development impractical, AI enables a company of non-specialists to participate meaningfully in building and maintaining its own operational systems.
And as a result, ownership becomes possible — not because systems are simpler — but because the effort required to operate and evolve them no longer depends entirely on scarce human specialization.
For readers seeking a more detailed understanding of how i3 is putting these principles into practice, or to learn more about RAAMP, you can reach us through our contact page or send us an email at info@i3resources.com.
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