The classic irony for me was a service manager in just such an environment resisting a cloud move "because it's someone else's computer" - even though his (ancient) application was running on a rented partition of a remote, IBM owned & operated S/390...
No surprise therefore that the big clouds have country resources dedicated to moving the needle on cloud awareness in highly regulated environments.
(obdisclosure: I am former .au AWS manager)
lawyers
I've supported multiple legal firms who have assured me they cannot legally host their data in the cloud.Noone ever seems to be able to refer to a specific law, but then, it's an IT person talking to lawyers, so there are some battles you just don't fight.