Is Data Sovereignty an Enabler or Roadblock for Cloud Adoption?

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Adhering to data sovereignty regulations a big challenge for enterprises!

Why are Chief Information Officers (CIOs), risk managers, and security chiefs concerned about where cloud-based data resides? Given the immense business benefits cloud services offer, it really does not come as a surprise that enterprises are rapidly shifting to the cloud platform. However, it is crucial to understand that the international laws and regulations regarding data sovereignty are important factors in many countries. Data sovereignty is about information being controlled by the laws and regulations of the country in which it is located. Given the proliferation of hyper-connected urban data centers, physical infrastructure is as essential as access to data is.

What exactly does this mean for cloud users, especially when data moves across international borders? What can be the potential impact of data governance on cloud users? Is there a way that enterprises can safeguard data while coping with regulatory and legal issues?

Why are cloud users worried about data sovereignty?

For many, data is an asset and the cloud has revolutionized its effectiveness. A recent report revealed that 59% of decision-makers see cloud computing as their main short-term priority. The biggest attraction of cloud is its ‘anytime-anywhere access’ feature that goes beyond geographical boundaries.

However, the geopolitical issues, national protectionism and security regulations have restricted the mobility of data. The importance of data sovereignty varies across industries.

Data sovereignty regulations are not restricted to specific industries. Germany, France, and Russia are interesting examples – these countries require all their citizens’ data to be stored within the country.

Given the stringent data sovereignty laws, large enterprises will be required to split their data into different ‘sovereign clouds’. This process could end up creating silos of data across different countries. Are you going to travel to deal with data compliance issues to run your multinational operations? Some C-level executives have reservations about dealing with cloud data, in case things go amiss.

3 lessons to gain control on cloud data

The data sovereignty regulations vary widely – the laws in Canada are different from the US or Europe. It is pertinent to mention that inadequate information about the location of data centers might harm businesses.

Gone are those days when enterprises used to store their data behind firewalls and knew exactly where their data is located. Data location in contemporary times can be ‘anywhere-anytime access’ depending on the scope of operations of the cloud service provider. Hence, it is imperative for enterprises to hold their cloud providers liable when it comes to storing their data.

Fortunately, cloud users can develop standards to deal with the challenges arising out of data sovereignty.

Lesson 1: Ensure compliance issues

In today’s world, data is driving business value. However, enterprises, impatient about collecting and using data, must ensure they meet all compliance regulations. To avoid any failure in adhering to regulations, it is important to balance data accessibility with applicable regulations.

Given the prevailing new data sovereignty laws across the globe, the regulations can have far-reaching ramifications on businesses consuming cloud services. Hence, it is vital for enterprises to be aware of compliance limitations and evaluate those properly before undergoing cloud migration.

Lesson 2: Developing data security strategy based on different types of data

Data classification is the key to developing a data security and privacy strategy. Identifying the different types of data that you will shift to the cloud will help determine the risk and exposure indicators. An assessment of the exposure indicators can help enterprises understand if the different types of data shifted to cloud, have restrictions under sovereignty laws.

The key to developing a data security strategy lies in identifying data sovereignty laws and regulations that restrict the storage of data. A data privacy strategy must address all difficulties cropping up owing to data sovereignty regulations, data ownership, and accessibility laws.

Lesson 3: Cognizance of cloud service providers – bridging the gap

The insatiable demand for adopting cloud services is showing no signs of abating in the near future. However, enterprises must exercise prudence in making cloud investments and avoid complicated issues arising out of data sovereignty regulations. Such cloud investments require an in-depth understanding of how cloud service providers are going to deal with the data of enterprises.

There are a slew of questions that may sound tough. However, it is crucial to know the credibility of cloud service providers. What is the jurisdiction of data centers? How does a data center operator ensure data security? Does the data come through any other geographical jurisdiction to reach the data center? Is there a different data processor than the storage provider? If so, what is the location of the data processor?

These are some of the crucial questions enterprises must ask to understand how the cloud service provider complies with sovereignty regulations. At the end of the day, the data belongs to the business, and hence, the liability equally lies with the enterprises.

Controlling your future – a thoughtful choice

Cloud data seems to be a revolutionary concept for reducing internal IT sprawl. Cloud enables enterprises to free up adequate space for entrepreneurial and innovative opportunities. This new regulatory environment demands forward-thinking from enterprises. Data sovereignty is not about technology – it is an integral part of the management’s vision.

There is no way to avoid data sovereignty, but a smart cloud strategy can surely help avoid data privacy violations. Data responsibility is by far the most important phase of any cloud adoption strategy. Risk-averse enterprises, which overlook data sovereignty regulations while undergoing cloud migration, will end up grappling with myriad issues to gain control of their data.

Vikram Gupta
Vikram Gupta
About the Author

Vikram is a Business Consultant at SG Analytics. He holds a bachelor's degree in electronics and communication design from MNNIT Allahabad.