Why concerns over data sovereignty are driving organizations away from the cloud.
With cloud-based services in demand, the future should be bright for the cloud. However, growing fears over data privacy and compliance — and technology providers’ failure to quash these concerns — may stunt the public cloud’s growth as enterprises consider moving their data on-premise.
New and updated national data privacy and data localization laws are fundamentally altering the way that companies can conduct business internationally, which is, in turn, transforming their attitude to cloud infrastructure. The EU’s General Data Protection Regulation (GDPR) and China’s Cybersecurity Law — two of the most comprehensive packages of data privacy regulations — have already had cascading impacts on businesses in these markets and all of their trading partners. And this is just the beginning. Japan announced earlier this month that it is making changes to its Protection of Personal Information (AAPI) Act, tightening controls of international data transfer from 2022 to bring it in line with GDPR and over 70 other countries have passed new or updated data privacy laws in the last few years that include some form of data localization.
The challenge with the public cloud is that it runs across a distributed infrastructure and providers tend to store data in technically and commercially practical locations. In light of recent enterprise data breaches and incidences of data misuse, the dispersed nature of the cloud leaves businesses with concerns on a number of levels: How can they be assured of the privacy of their data? Where is their data stored? And who ensures the sovereignty of their data? Them or their cloud partner?
Without sufficient reassurance from their technology providers that their data is secure and compliant with data regulation laws, private and public organizations are beginning to rethink their commitment to and use of the public cloud. Ultimately, unless technology providers do not become fully transparent with how they store and handle enterprise data and offer greater reassurance to customers, privacy concerns may lead to a demise in the cloud’s appeal.
Three trends are emerging:
1. Companies are abandoning the public cloud altogether and moving critical applications to private cloud or on-premise, where they have complete control of where their data is stored and who can access it.
2. Companies are looking to move to technology platforms and providers that offer complete transparency with regards to their privacy policies and have a ‘zero trust’ model of security to give them complete peace of mind that their data is safe and their digital privacy assured.
3. Companies are restructuring their cloud infrastructure along national lines or considering moving to regions where data jurisdiction is more favorable in terms of storing and processing data.
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