I think it might also be, that if you are a company working on public sector projects, servers being within the country is required or preferred to win the contracts.

Haven't been in this space in a long time, but when I did work on such projects in Switzerland mid 2000s having anything outside the country would at least raise eyebrows. Back then we had to run most things on-premise, but from what I have heard, they opened up to the cloud to a degree.

See also the tags of the article "[...] Education, Government, Healthcare, Nonprofit, Public Sector, [...]"