Data Sovereignty vs. Data Residency: 3 Myths Uncovered

Nimrod Iny
|
Aug 25, 2022

Data sovereignty and data residency are often confusing for businesses managing data across borders, especially with the rise in cloud infrastructure, multi-cloud, and hybrid.

This issue is exacerbated when the term is used interchangeably. While they both relate to data - data sovereignty and data residency are two different things.

Here's what they are in a nutshell:

  • Data sovereignty refers to the legal ownership of data.
  • Data residency refers to where the data is physically located.

These terms are often used interchangeably, but there are important distinctions between the two.

Data sovereignty is a legal concept and is governed by national laws. Data residency, however, is a physical concept determined by where the data is stored.

It can get confusing, mainly because the physical location of data can also lead to data sovereignty claims by foreign governments. This often leads us down a slippery slope of ownership, privacy compliance, and potential breaches simply based on the origins of your data source, the residency of your company, and where you stored the data.

What is Data Sovereignty?

Data sovereignty is the legal ownership of the data, despite its physical location. It's also about protecting sensitive data from potential privacy breaches.

While data may feel intangible, it still needs to be stored somewhere. This somewhere is usually in the cloud.

So why is data sovereignty important?

Firstly, it ensures that data is subject to the laws and regulations of the country in which it is collected, which is important for data protection and privacy.

Data sovereignty also protects data from being accessed by other countries. This is vital for security and confidentiality. Data sovereignty also ensures that data is available for use by the country in which it was collected, which is essential for economic and social development.

Data sovereignty is a complex issue, and several stakeholders are involved. These include governments, businesses, and individuals. Each of these stakeholders has different interests and needs. As a result, data sovereignty is an evolving concept, and there is no one-size-fits-all solution.

What is Data Residency?

Data residency refers to the physical location of where data is stored. It is an important consideration for organizations that must comply with data privacy regulations, such as the General Data Protection Regulation (GDPR).

Organizations may store data in multiple locations, including on-premise, in the cloud, or hybrid environment. Each option has different implications for data privacy and security.
On-premise data storage gives an organization the most control over its data. The organization is responsible for ensuring that the data is stored securely and is accessible only to authorized personnel. However, this option can be costly and may require more IT resources to manage.

Cloud-based data storage offers more flexibility and scalability than on-premises storage. Organizations can choose from various cloud-based storage solutions, such as public cloud, private cloud, or hybrid cloud. Cloud storage can be more cost-effective than on-premises storage, but it may be less secure, as the organization does not have complete control over where the data is stored or how it is managed.

Data residency is essential for any organization that must comply with data privacy regulations. The data storage solution you choose will depend on your specific needs.

What is Data Localization?

In a globalized world, data localization is the act of storing data on servers physically located within the country or region in which the data was generated. The purpose of data localization is to keep data within the legal jurisdiction of the country or region in which it was generated to comply with data protection laws.

Data localization has recently become controversial as more companies collect data from users worldwide. Some countries, such as the European Union, have passed laws requiring companies to store data within the EU to protect the privacy of EU citizens. Other countries, such as China, have passed laws requiring companies to store data within China to comply with Chinese law.

Critics of data localization argue that it creates a barrier to trade and innovation and is unnecessary in the internet age. They say that data can be stored securely in any location and that the benefits of global trade and innovation outweigh the benefits of data localization.

Supporters of data localization argue that it is necessary to protect citizens' privacy and that it helps ensure that companies comply with the laws of the countries in which they operate.

Why you should prioritize Data Sovereignty

Data sovereignty is a term that is often used in the context of data security and privacy. It refers to the concept that data should be stored and managed in a way that complies with the laws and regulations of the country or jurisdiction in which it is located.

Cloud security is more than just putting everything under lock and key. Data sovereignty is important because -

  • It helps to ensure that data is protected from unauthorized access and misuse.
  • It ensures that data is subject to the same laws and regulations as other types of information.
  • It helps ensure that data is accessible to those entitled to see it.

Data sovereignty is becoming increasingly important as more and more businesses store and process data in the cloud. Businesses can protect themselves from potential legal liabilities by ensuring that data is stored and managed in a way that complies with the laws and regulations of the country or jurisdiction in which it is located.

3 Cloud myths uncovered

The cloud is often considered a safe and secure place to store data and applications. However, some myths about cloud security can lead to problems if you're not careful. Here are three cloud myths uncovered:

Myth 1: My cloud provider will keep me secure

Reality: When it comes to security in the cloud, there is a shared responsibility model in place between you and your cloud provider. This model outlines the specific responsibilities of each party when it comes to keeping data and applications safe in the cloud.

According to a 2020 Cloud Security Report, the top-ranked cloud threat are misconfigurations.

As the cloud customer, you are responsible for securing the data and applications you put into the cloud. This includes ensuring that your data is encrypted and your applications are updated and patched. You must also set up strong access controls to restrict who can access your data and applications. Your cloud provider is responsible for securing the cloud infrastructure itself.

The shared responsibility model for security in the cloud ensures that you and your cloud provider have a role to play in keeping your data and applications safe. By understanding your responsibilities, you can help to keep your data and applications secure in the cloud.

Myth 2: Bad actors aren't attacking the cloud

Reality: Despite common misconceptions, the cloud is not impenetrable to bad actors. Bad actors are often drawn to the cloud because it presents new challenges and opportunities to exploit.

As the cloud has become more prevalent, so have bad actors used tools, tactics, and procedures (TTPs) to compromise cloud accounts. 79% of companies have experienced at least one cloud data breach in the past 18 months. In many cases, these TTPs are the same ones used to compromise on-premises accounts. The only difference is that bad actors have adapted their TTPs to the cloud environment.

Automated data compliance methods can prevent this issue and ensure your infrastructure is safe to store sensitive data.

Myth 3: The cloud is inherently insecure

Reality: We often hear that the cloud is less secure than on-premises data centers. However, the security of your digital assets is only as strong as the permissions your team has configured on them.

The security of the cloud is constantly improving, and in many cases, it can be more secure than an on-premises data center. While cloud providers are responsible for the security of their data centers, it is still the responsibility of the customer to secure their data and applications. This can be done by using the security features that are provided by the cloud provider, such as encryption and access control.

According to Foundry, 69% of companies have accelerated their cloud migration in the past 12 months. However, it is also reported that 42% of enterprises struggle with data privacy and security, while another 39% face issues with implementing data governance and compliance.

The issue here is that the cloud is not inherently insecure. Instead, the lack of resources ensures that the infrastructure is utilized at its maximum potential capacity.

See, follow and protect your cloud data with Polar Security

Data sovereignty is essential for businesses because it determines who has the legal right to access and use the data. Data residency is also important for businesses as it determines where the data is physically located and how accessible it is.

But keeping track of everything can be difficult. This is where Polar Security can help by enabling an automated data security and compliance platform. Book a demo today to uncover the data iceberg, know where your sensitive data is located, and map your data residencies and sovereignty with ease.

Polar security-The First Automated Cloud-Native Data Security & Compliance Platform
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