Data residency and data sovereignty: SaaS providers and shared responsibility

Data is undoubtedly one of a company’s most valuable assets today. It drives decision-making, fuels automation and defines the customer experience. However, as your organization handles a growing volume of data, the complexity of managing it effectively grows proportionately.

No matter the size of your organization or the type of infrastructure you prefer, you need to care about where you store your data — data residency — and who controls it — data sovereignty.

What are data residency and data sovereignty?

The truth of shared responsibility

You must understand data residency and sovereignty to achieve seamless and compliant data orchestration, especially if you run a global and/or remote-first company. If your data infrastructure relies on SaaS solutions, you inherently have less direct control over data location and access compared to on-premises deployments. 

While on-premises software allows you to house and control data as you see fit, SaaS comes with limitations and a shared responsibility model. Your provider manages certain components of data security and infrastructure, but critical compliance responsibilities fall back on you. This can be an overwhelming burden if, like the average enterprise, you use 473 SaaS apps!

Many SaaS providers offer limited guidance on how to remain compliant, expecting you to understand complex regulations and how they apply to you and your use cases. This is why it’s crucial to vet providers and find one that not only prioritizes data residency and sovereignty but also understands it well and designs for it in consultation with customers. 

At Redwood Software, our focus is on providing customers with confidence that their data is both secure and compliant, without the ambiguity that typically surrounds shared responsibility. That means providing clear guidelines and taking proactive steps to handle residency and sovereignty.

Top data management concerns of a global enterprise

Data protection is a multi-faceted problem, as regulations and risks are continuously evolving. Rapid growth in data volumes, changing global mandates and the shift toward cloud adoption and remote work have made achieving protection tougher than ever.

Managing a vast amount of information presents problems for storage and governance. It’s no longer enough to have basic storage solutions; you must make conscious, informed decisions about how you’ll manage and store data in a place and in a way that complies with applicable regulations. To keep your data accessible, secure and compliant, you need to have a deep understanding of data residency and sovereignty requirements.

Making the picture even more complex, localization mandates continue to grow in scope and severity. Governments worldwide are enacting stricter laws that dictate how data must be stored, accessed and transferred. Regulations like the European Union’s General Data Protection Regulation (GDPR) and China’s Cybersecurity Law are prime examples of how specific regions enforce varying regulations. Navigating these mandates well is an absolute must if you hope to operate efficiently with no data flow interruptions. You may need to make comprehensive updates to organizational policies and practices to ensure every transfer and access point is up to par.

Organizations also have to face the challenge of increasingly decentralized data. Widespread cloud adoption and remote workforces have dispersed data and created a demand for cross-border access. The result? A complicated ecosystem that requires advanced data management strategies to reconcile the need for accessibility and sometimes conflicting regulations.

Your employees expect to have quick and reliable access to the information they need, but each data transfer presents a potential legal and regulatory risk. 

Why security can’t be an afterthought

Data breaches are on the rise, and with each incident in the news, the stakes grow higher for your business. The frequency and severity of breaches have created an environment where privacy is not just a compliance issue but a critical differentiator.

Customers and stakeholders expect companies to go above and beyond mere regulatory adherence and actively protect sensitive information. A loss of trust is nearly impossible to regain.

Remote work has increased both risks and expectations. Employees may sometimes use unsecured networks or personal devices, increasing vulnerabilities. Yet, they need seamless data access, regardless of location. Securing data without disrupting productivity is no small task.

One of the most concerning aspects of data security today is the risk of exfiltration — when malicious actors gain access to your information via emails, file downloads, malware or cloud vulnerability exploits. Sophisticated cyberattacks are becoming more common, and strong data protection measures are non-negotiable.

Thus, while automating your data management should be a priority, it’s important to have a solid plan incorporating residency and sovereignty. 

Building a compliant data automation strategy

The best data strategies consist of:

• Defined regulatory requirements and data boundaries
• Resilient, yet malleable, workflows
• Strong monitoring
• Awareness of policy updates

Begin by seeking a clear understanding of the regulatory environment in which your business operates. Then, for each jurisdiction, identify the specific laws and mandates governing how and where data can be processed, stored and accessed.

Document and integrate these requirements into your operational processes. An up-to-date, customized regulatory map can be invaluable as you try to prevent costly compliance failures. 

From there, you’ll want to start building adaptable data workflows. If they’re too rigid, they can leave you vulnerable when unexpected changes occur (which is quite often in the world of data protection laws). Choosing a flexible automation solution will help you design flexible workflows from the start. In a SaaS model, data processing locations may change dynamically due to load balancing or disaster recovery. Design your workflows to handle these changes — reroute data and load during outages — without breaking compliance.

Monitoring and continuous oversight are also crucial components of your strategy. Breaches and non-compliance events happen quickly, and having a clear audit trail of every interaction with data can keep you from getting swept away in the chaos. Alerts for suspicious activity or deviations from protocols are the new norm for mitigating risk.

Finally, keeping your team informed with training and dedicating resources to staying aware of the latest regulations that impact your business are proactive ways to take on the data responsibilities of today and tomorrow.

Use a compliance-aware data automation platform

The right data automation tool can minimize costs while helping you manage technical complexity. Look for a solution with strong SaaS encryption, robust access controls and best-in-class security policies and certifications. 

Redwood’s certifications include: ISO 27001, ISAE 3402 Type II, SSAE 18 SOC 1 Type II, SOC 2 Type II, TX-RAMP Provisional Certification and Cloud Security Alliance STAR Level 1.

These factors, plus a commitment to getting data residency and sovereignty right for customers, will enable you to minimize fines and data transfer restrictions, reduce latency and increase resilience in crisis situations.

Choose a recognized workload automation provider

Gartner named Redwood a Leader, positioned furthest in Completeness of Vision, in the 2024 Magic Quadrant™ for Service Orchestration and Automation Platforms (SOAPs) report. In evaluating providers for Completeness of Vision, Gartner heavily weighed geographic strategy, stating that SOAPs with this distinction “support complex international requirements and features, such as regional-specific compliance with local laws and regulations.”

In its expansion of this analysis, the Critical Capabilities for SOAPs report, Redwood was ranked first in three Use Cases and tied for second-highest score in the Data Orchestration Use Case, receiving a score of 4.05 out of 5.

I believe these achievements represent Redwood’s ability to provide top data protection and responsive support for all geographies — a significant differentiator when you’re looking for a provider who won’t leave you wondering how to handle and protect data without their guidance.

Get a glimpse of our superior data automation features and security standards by booking a demo of RunMyJobs by Redwood.