What Is Data Sovereignty?

As global businesses increasingly rely on digital tools, the location of their data, and the laws governing it, has become a critical concern. This is where data sovereignty comes into play. In simple terms, data sovereignty refers to the legal concept that data is subject to the laws and governance of the country where it is physically stored.

For organizations collecting and storing sensitive information, such as personal health records, financial data, or intellectual property, understanding and managing data sovereignty is essential to remain compliant, secure, and operational.

Why Data Sovereignty Matters

Every country has different regulations regarding data privacy, security, and government access. For example:

• The U.S. has industry-specific rules such as HIPAA for healthcare and GLBA for financial institutions.
• The EU enforces the General Data Protection Regulation (GDPR), which applies even to non-EU businesses handling EU citizens’ data.
• Canada and other jurisdictions have strict residency requirements for public sector data.

If your business stores customer or operational data in another country, intentionally or via cloud providers, you may unintentionally become subject to foreign regulations, investigations, or penalties.

Failing to address data sovereignty can lead to:

• Fines for non-compliance
• Loss of customer trust
• Disrupted services due to foreign government actions
• Complications in legal disputes

Worried About Data Compliance Risks?

Don’t leave data sovereignty up to chance. Combined Technology helps businesses across Tulsa and Oklahoma maintain regulatory compliance while enabling growth.

👉 Book a free consultation today

Cloud Storage and Jurisdiction Risks

Many businesses use public cloud platforms like AWS, Microsoft Azure, or Google Cloud, which often replicate or move data across global data centers. While this enhances performance and redundancy, it can also create legal ambiguity regarding jurisdiction.

For instance, if your customer database is hosted in a European region but accessed by a U.S. team, which country’s laws apply? Without clear control and policy enforcement, businesses risk violating sovereignty laws without realizing it.

Partnering with a provider who understands these nuances, like Combined Technology, can help you stay compliant and avoid costly surprises.

The Role of Managed IT Services in Data Sovereignty

Working with a Managed Services Provider (MSP) can give your organization greater visibility and control over data storage and access. Here’s how:

1. Data Residency Planning

MSPs help you assess where your data resides and determine whether that location aligns with industry or government compliance rules. They assist in configuring cloud environments and storage policies to restrict data movement across unauthorized jurisdictions.

You can also pair this with Cloud IT Services to ensure data sovereignty is addressed during migrations and infrastructure design.

2. Regulatory Compliance Guidance

For organizations in regulated industries, healthcare, legal, education, finance, or government, data sovereignty is more than a best practice: it’s a requirement.

Our Cybersecurity Solutions and Digital Transformation Services include audits and consulting to help your business align with jurisdictional requirements such as GDPR, HIPAA, or CCPA.

3. Endpoint and Access Control

Even if your data is stored in a compliant location, weak access control can violate sovereignty laws. An MSP can implement Endpoint Security Services and access management protocols to ensure only authorized users, within legal boundaries, can access certain datasets.

We also assist with configuring user roles, VPNs, and multifactor authentication to reduce jurisdictional risk.

4. Backup and Disaster Recovery

Redundant backups stored across borders can unintentionally trigger sovereignty violations. Our Disaster Recovery and data retention strategies are designed to align with your industry’s legal obligations and ensure your backups don’t undermine compliance efforts.

5. Strategic IT Leadership (vCIO Services)

Sovereignty decisions shouldn’t be reactive. With Virtual CIO Services, we help leadership teams develop long-term IT strategies that anticipate legal risks, growth across regions, and future compliance requirements.

Industries Most Affected by Data Sovereignty

Some sectors face stricter data governance due to the sensitivity of information they handle. We commonly support:

• Healthcare
• Legal
• Accounting
• Education
• Manufacturing
• Oil and Gas

In these industries, storing data in the wrong jurisdiction can lead to reputational and legal damage.

Key Questions to Ask Your IT Team

• Where is our business-critical data stored?
• Are we subject to any data residency regulations?
• Can we prevent cloud providers from moving our data overseas?
• Do our contracts with vendors cover sovereignty responsibilities?
• What is our plan in case of a compliance audit?

If you don’t have clear answers, it’s time to evaluate your data strategy.

FAQs

What is the difference between data sovereignty and data privacy?

Data sovereignty refers to where data is stored and which country’s laws apply. Data privacy is about how data is used and protected, regardless of location.

Can U.S.-based companies violate foreign laws without realizing it?

Yes. If your data is stored or accessed in another country, even by a third-party cloud vendor, you may be subject to that country’s laws.

How do I know where my cloud data is stored?

You can request regional data policies from your provider or consult an MSP to conduct a full cloud environment audit and set location-specific restrictions.

Is it illegal to store data outside the U.S.?

Not necessarily. However, depending on your industry and the type of data, certain laws may require storage within the U.S. or impose strict transfer conditions.

Can Managed IT Services help avoid sovereignty issues?

Absolutely. MSPs offer visibility, control, and strategy to ensure your data stays compliant with local and international laws.