Enterprise Data Sovereignty

Around the world, data has been growing in an unprecedented way and this is driven by the adoption and use of modern technologies and new business platforms. This explosion of data has caused data to be treated as an asset of inestimable value. While this data can represent an opportunity for more quality products and services, it can also be a source of concern for other organizations.

Valuable data can take several forms, it could be as simple as someone’s contact details, or it can be more detailed to include your browsing history and online shopping behavior. But with the rising use of digital platforms, governments, and individuals started to raise concerns about their data privacy, and the accuracy and further use of the information by the collecting organizations and any other organization they decide to share that information with.

In that context, in 2016 the European Union (EU) realized the urgency behind protecting the data originated by its citizens and started demanding more strict rules to ensure the data of its people are subject to the following rules:

• Protected
• Used in a fair and legal way
• Made available to the owner when asked for
• Corrected when the owner asks for the information to be corrected

These types of data protection enforcement have created the need for regulators to construct data regulation frameworks and for data collectors to comply with such new frameworks. Data sovereignty is one example of these regulations, but what does it mean?

What is Data Sovereignty?

Data sovereignty can be simply defined as maintaining authority and control of data within jurisdictional boundaries. The term data sovereignty, on the other hand, is concerned with ensuring that data resides in its country of ownership and the regulations around it from an essential tenet of data privacy and security.

As it is directly linked to data privacy, the concept of data sovereignty has now been widely adopted by both government organizations as well as private enterprises. Today, more than 75 countries around the world have implemented some level of data localization rules. The intent behind these rules can vary between preventing cybercrimes (such as identity theft), promoting local economies (by creating new jobs), and obviously addressing rising concerns about privacy.

Since data sovereignty has a direct bond with the location of the data, it is important to differentiate between data residency and data sovereignty. Data residency refers to the geographic location where an organization stores data, whilst data sovereignty refers not only to the data being stored locally, but also mandating that data remain subject to the local country laws and regulations. Therefore, we could see some variations in relation to the data sovereignty laws and regulations from one country to another. 

Australian data sovereignty laws and residency requirements, for example, extend beyond just the information your store in the database. In most cases, it covers the operational and configurational data related to your technology infrastructure and who handles this data from a day-to-day data management perspective.

The Rising Needs for Data Sovereignty Compliance

As the pace of the introduction of new technologies has never been this fast, chief information officers (CIOs) around the globe are taking every possible opportunity to advance their businesses via the adoption of these modern technologies. Take the cloud and its subsidiaries as an example, 8 out of 10 CIOs are considering Cloud as part of their new digital transformation initiatives. 

On another hand, governments are increasingly recognizing the power of data economically, politically, and geo-politically to drive local, national, and even multi-national economic development.

These factors are adding pressure on two different entities:

1. Governmental Regulatory Authorities – to enforce data privacy laws and regulations aimed at the safe use of data
2. Chief Information Officers (CIOs) – to ensure full compliance with the in-place data sovereignty laws in their current & future digital initiatives

For CIOs, the influx of service providers who pivot their services on the use of cloud infrastructure is constant increase. When CIOs adopt a cloud-first strategy, this means that they must consider the use of cloud in every new digital initiative. Whether they would like to break away from costly on-premises data storage platforms and replace them with flexible consumption-based cloud storage from Microsoft or rely on Google Cloud Platform (GCP) to build a data lake for their unstructured data, there is a risk involved in their data privacy.

Healthcare data has always been considered the most valuable data on the black market given it contains all of an individual’s personally identifiable information compared to a single piece of info that can be found in a financial breach. In fact, a healthcare record can be valued at $250 per record, which is attractive enough to be a target for a ransomware attack.  

The previous examples of cloud adoption and the criticality of healthcare data are only a few examples of why governments and enterprises are required to co-develop strategies and frameworks that mandate certain laws and regulations on where the data should reside and how it can be accessed.  

When the State of Qatar adopted a cloud-first strategy, they wrapped up the strategy with certain laws about the localization and access of the country’s data in the cloud. As a result of this, we have seen major cloud service providers, such as Microsoft, put a heavy investment in building local data centers to comply with such data privacy laws.

Shaping Solutions for Data Sovereignty Compliance

Besides the factors we briefly discussed in this article about the rising need for data sovereignty compliance, there are many others that require detailed research and perhaps lengthy documents. But the crux of the matter is that enterprises are now required to invest in solutions that pave the ground for full compliance with specific data sovereignty rules and regulations.    

These solutions can range from:

• Building sovereign cloud architecture for your enterprise. An example is the EU-based Gaia-X framework that’s built to incorporate certain data sovereignty laws as part of the overall IT infrastructure
• Follow a data-centric approach by building a reliable data management framework so that data security is enabled throughout the entire data cycle   
• Partnering strategically with service providers that can help you meet the compliance you need. These can range from public cloud service providers, private cloud service providers, and co-location service providers

In conclusion, enterprise data sovereignty is a crucial aspect of modern data management, enabling organizations to maintain control over their data, protect it from unauthorized access and misuse, and comply with regulatory requirements. As the amount of data collected and processed by organizations continues to grow, the importance of maintaining data sovereignty will only increase.