Data Sovereignty in the Cloud: Everything you need to know

With data sovereignty, businesses can keep their data within the borders of their own country. This is done with the purpose of protecting that data from being accessed or used by other entities without authorization. Almost 93% of the IT industry has switched to cloud computing – these companies are looking into whether or not it’s feasible to store and access their data outside of their home country to take advantage of cloud benefits. In this post, we’ll explore what data sovereignty is and how it applies to cloud computing, as well as some things for organizations to consider when making a decision about where to store their data.

What is Data Sovereignty?

Data sovereignty refers to the laws applicable to data because of the country in which it is physically located. The legal rights of data subjects (any individual whose personal information is being gathered, retained, or processed), and data protection requirements, depending on the location in which their data is stored. Accordingly, organizations will have different responsibilities for data in different geographical locations.

data sovereignty

What is Data Sovereignty in the Cloud?

Renewed attention is being directed to issues that arise globally from the storage of business and personal data in the cloud. Besides existing requirements to keep certain types of data within the country of origin, some nations’ data sovereignty laws introduce significant limitations on data transmission outside the country of origin.

Some countries also have privacy laws that limit the disclosure of personal information to third parties. This means that companies doing business in such countries may be prohibited from transferring data to a third-party cloud provider for processing or storage. Cloud data can be subject to more than one nation’s laws. Depending on where it is being hosted or by whom it is controlled, different legal obligations regarding privacy, data security, and breach notification may be applicable.

In some cases, large categories of data may not be allowed to be transmitted beyond the country’s geographic borders or outside its jurisdiction. Such restrictions affect businesses that employ a hybrid cloud strategy – they use multiple cloud providers that maintain local data centers and comply with the separate, local legal requirements for each country.

Despite the benefits of flexibility, scalability, and cost savings offered by cloud infrastructure, companies adopting the cloud need to consider potential security and data sovereignty issues.

What is the importance for businesses?

In times of digitalization, public sector companies and those operating as part of the free economy must observe two basic rules to guarantee data security:

  • IT infrastructure must be secure, flexible, and up-to-date at all times
  • Data sovereignty over the customer, user, and business data must be guaranteed.

Once appropriate safeguards and contractual arrangements are in place, companies can protect trade secrets and process personal data in accordance with EU data protection directives. Companies should always know how third-party service providers handle data and what rights of use they have. Since there are also legal uncertainties and gray areas when it comes to data sovereignty, it should be contractually regulated what happens to data and how it is stored, processed, and transferred.

3 steps to Ensure Data Sovereignty in Cloud Computing

Here are key steps that can help you ensure data sovereignty in your cloud infrastructure:

Leverage cloud provider capabilities

Most cloud providers have data centers in geographical locations around the world. By fine-tuning the physical location of each dataset, you may be able to meet the requirement for data geolocation. Your cloud provider might also have other features that can help meet sovereignty requirements, such as data encryption.

Implement data sovereignty requirements uniformly

Each country has its own data sovereignty requirements. If you operate globally, adapting to each region’s regulations can be complex. You can simplify things by selecting one location with the strongest data sovereignty requirements and applying those across all regions. Applying more stringent data protection than actually required might appear wasteful – but it will provide additional security and data protection that can benefit the organization in the long term.

Keep track of backups

Data sovereignty not only applies to production workloads but to backups as well. Understand how your organization currently backs up information – whether on-premises, using dedicated cloud services like Dropbox or Google Drive, or using public cloud services like Amazon S3. Evaluate these backup options and ensure they are in line with each territory’s data sovereignty requirements.

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The challenges with compliance

Considering that over 100 countries have data sovereignty laws, things can get complicated. This is especially true for larger companies that are more likely to be working with data from multiple territories.

Common challenges with achieving compliance include:

  • Changing laws. Data sovereignty is still a pretty new idea, meaning that relevant laws tend to evolve quickly as countries discover and navigate new situations. These changes aren’t always negative, but they can still make the environment challenging for businesses to remain reactive.
  • Business growth. A business that expands beyond its own borders should be a reason to celebrate. However, it also makes things more complicated when it comes to data. The more data a business collects, and the more territories it operates in, the more challenging it will become to determine which data sovereignty laws it needs to abide by.
  • Data mobility. Simply put, data mobility means getting data where and when you need it. Data sovereignty laws can inhibit that mobility. It can mean additional restrictions on how businesses can move data between two countries. It can also mean that specific cloud locations and services cannot be used. There might also be rules regarding the degree of encryption for data while it’s in transit and at rest. This brings up issues such as data transfer methods, related cyber protections, and network systems and security.
  • Technological transparency. To prove that you are complying with data sovereignty laws, you have to be prepared to detail how you handle your clients’ sensitive data.
  • Cloud Infrastructure. Cloud infrastructure is often dispersed over multiple territories, which can make data sovereignty an issue. If you aren’t careful, you might find that your cloud deployment extends into countries with different data sovereignty laws. Certain data sovereignty regulations also dictate where data can be processed, which could limit your choices in terms of cloud services.
  • Higher Costs. Data sovereignty laws could result in higher operational costs. For example, you might have to provide additional internal training to ensure that everyone knows the rules you have to comply with. It might also be necessary to change how you collect, store, and process data to ensure that you are accommodating all the relevant rules and regulations. You may even have to make repeated changes to maintain compliance due to the speed with which laws are still evolving.

Implement the most common Data Sovereignty rules into your data storage process

Many businesses are taking steps to ensure compliance with the most common data sovereignty rules. This includes implementing measures such as data security protocols. Businesses may safeguard their data from loss or corruption and reduce the chance of data sovereignty concerns by following these best practices.


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