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The number of data residency and data sovereignty discussions had soared in the past 12 months, stalling technology innovation in many organizations, says Gartner’s Carsten Casper. Originally triggered by the dominance of U.S.providers on the Internet and the Patriot Act, the perceived conflict was then fuelled by revelations of unexpected surveillance by the National Security Agency (NSA) made public by Edward Snowden.
“IT leaders find themselves entangled in data residency discussions on different levels and with various stakeholders such as legal advisors, customers, regulatory authorities, employee representatives, business management, and the public,”Caspersaid.
Gartner identifies four types of data location:
Physical location: Historically, people equated physical proximity with physical control over data and security. Although everybody knows that locally stored data can be accessed remotely, the desire for physical control still exists, especially among regulatory bodies. Gartner advises organizations not to dismiss concerns about physical location, and instead balance the discussion with other types of risk.
Legal location: According to Gartner, many IT professionals are not aware of the concept of legal location. The legal location is determined by the legal entity that controls the data (the organisation). There could be another legal entity that processes the data on behalf of the first entity (such as an IT service provider) and a third legal entity that supports the second one in that endeavor (possibly a captive data center inIndia).
“Statements like ‘it's illegal to store such data outside the country’ are often interpretations of legal language that is far less clear,” saidCasper. “Each organization must decide whether they accept those interpretations.”
Political location: Considerations such as law enforcement access requests, use of inexpensive labor in other countries that puts local jobs at risk or questions of international political balance are more important for public sector entities, nongovernmental organizations (NGOs), companies that serve millions of consumers or those whose reputation is already tainted.
“Unless you fall into one of these categories, you can discount media reports on data residency concerns,”Caspersaid. “While public outrage is still high about data storage abroad, there is little evidence that consumers really change their buying behavior.”
Logical location: This is emerging as the most likely solution for international data processing arrangements and is determined by who has access to the data. For example, a German company signs a contract with the Irish subsidiary of aU.S. cloud provider, fully aware that a backup of all data is physically stored in a data center inIndia. While the legal location of the provider would beIreland, the political location would be theU.S. and the physical location would beIndia, logically, all data could still be inGermany.
For that to happen, all data in transit and all data at rest (inIndia) would have to be defensibly encrypted, with keys residing inGermany. With such an architecture there is an increase in cost and complexity and a reduction of usability through functions like preview and search, mobility and latency.
“None of the types of data location solves the data residency problem alone,”Caspersaid. “The future will be hybrid — organization will be using multiple locations with multiple service delivery models. IT leaders can structure the discussion with various stakeholders, but eventually, it's the business leader who has to make a decision, based on the input from general counsel, compliance officers, the information security team, privacy professionals and the CIO.”
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