There is no universal global guideline when it comes to how data is managed, secured, and accessed. Privacy laws vary from country to country and are still being defined in the digital age. In the face of trends like consumerization, mobility, and the distributed workplace, data residency is fast-becoming a vital issue that requires more attention.
Stop and ask yourself. Do you know where your data is?
A Voltage Security survey of nearly 300 IT professionals found that 60% had concerns over data residency preventing them from uploading data to the cloud, 48% didn’t know which countries their data resided in once uploaded, and 30% were simply unaware of data residency requirements or laws.
Taking unnecessary risks
Lacking a policy due to uncertainty, or failing to ask the right questions of managed service partners, will not absolve you from the risks. Any data breach has a tangible impact for the shareholders and can result in legal liability and serious damage to customer perceptions. There’s a big resultant fall-out cost.
The Ponemon Institute’s 2014 Global Report on the Cost of Cyber Crime found that it takes a large organization an average of 31 days at a cost of $20,000 per day just to clean up and remediate after a cyberattack.
Clean up costs and the potential damage to reputation are serious enough risks to justify devoting resources to proper preparation. Data residency is at the heart of the issue, but it can be a complicated balancing act when you don’t have a solid strategy in place.
Understanding data proximity
According to Gartner, physical location will become increasingly irrelevant, but we’re not there yet. Gartner identifies four types of data location:
- Physical location- Where the data is physically stored
- Legal location – As determined by the legal entity controlling the data
- Political location- Considering local laws and working culture
- Logical location- determined by who has access to the data
There are problems with each location type. Does physical proximity actually equate to physical control anymore when data can be remotely accessed? How do companies cater for regulatory compliance that may stipulate that some data doesn’t leave the country? What about the fact that law enforcement requests may be handled differently when data crosses the border?
There’s a huge gray area in terms of legal and political locations. It’s something that’s causing even the most forward-thinking of technology companies’ serious headaches. Apple and Google have both run into trouble in European courts. Google was fined $1.2 million by Spain’s Data Protection Agency towards the end of 2013 for collecting and sharing data on Spanish users without informing them.
Things are not clear cut. Microsoft has challenged federal prosecutors’ right to demand access to its data centers in Ireland, despite the U.S. government claiming rights of access to all data held by U.S. companies regardless of where it is physically stored. A Microsoft blog on the topic points to a poll of Irish people where 89% of respondents agreed personal data in the cloud should have the same privacy protections as information on paper. The same poll in the U.S. found 86% of Americans agree.
Negotiating the minefield
Grappling with data residency is a serious challenge for the enterprise, as flexibility is important but you need to maintain control over security. The acceleration of data access technologies and the infancy of legal policy are muddying the waters. How should organizations proceed?
There has to be an in-depth dialogue with all stakeholders to ensure that limitations are fully defined and understood. A universal data management plan should dictate exactly how data is stored and transferred. It should include a solid disaster recovery plan. It may be possible to mitigate the risks by centralizing your data. Virtualization delivers a dynamic workplace and can dramatically reduce the circumference of your potential exposure in terms of breaches.
With so much uncertainty it’s also important to maintain some flexibility in terms of your structure. Take a good look at existing technologies in the environment and new technologies on the horizon. For example, encryption relies on algorithms that can be acquired or reverse engineered, so it may make sense for some companies to switch to tokenization, where random tokens or alphanumerical values make critical user data much harder to decode.
In a rapidly evolving space like data residency, with so many moving parts, a healthy mix of agility and pragmatism is required for you to develop the right policy for your organization. But one thing is clear – you really do need to work on one.
Published February 14, 2015 – Reads 5,372
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