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Manage data residency for best cloud results

Delving into the crucial role of data residency expertise in mitigating the risks and costs of cloud services.
Nicky Pantland
By Nicky Pantland, Data analyst, PBT Group.
Johannesburg, 31 Jan 2024
Nicky Pantland, data analyst at PBT Group.
Nicky Pantland, data analyst at PBT Group.

In today's corporate landscape, the adoption of online tools and services associated with the cloud has become indispensable for businesses seeking scalability, agility and a competitive advantage.

However, when migrating operations and data to the cloud, organisations are confronted with a host of risks and potential costs that demand careful management and mitigation. This is particularly true within the South African context, given the dominance of foreign vendors and service providers.

One powerful tool in this regard is expertise in data residency. Understanding and effectively managing data residency can significantly assist in reducing risks and costs associated with cloud services.

Data residency refers to the requirement that data is subject to the laws and regulations of the country or region in which it is stored. This concept becomes critical in the context of cloud services because data often traverses national borders and resides in data centres located around the world.

These requirements may limit where companies can store and process certain types of data. Different countries have distinct data protection and privacy laws, and vendors operating in foreign countries may not fully understand or comply with local laws and customs.

The cloud services landscape offers remarkable opportunities for innovation and efficiency; however, it also comes with substantial risks and potential costs.

For South Africa, the most prevalent regulation which needs to be addressed is the Protection of Personal Information Act (POPIA). South African organisations must ensure foreign cloud services comply with POPIA and other relevant local regulations.

There is also the concept of data sovereignty, which is where highly-regulated industries or organisations such as finance, healthcare or government may be required to ensure certain data cannot leave the borders of their country.

Data residency experts can help in identifying the best solutions to maintain data sovereignty and understanding the legal obligations of storing and processing data in specific jurisdictions. This is essential to avoid non-compliance, which can result in hefty fines and legal consequences.

In addition to regulatory compliance, different countries have varying standards for data security, and knowing where to best store the most sensitive information can reduce the risk of data breaches and associated costs.

The level of control offered to the user of a service will also have security impacts. Employing best practices for data encryption, access control and audits is crucial.

Cost is another fundamental aspect to manage. Many cloud vendors charge for data transfer between different regions or data centres. Additionally, the fluctuation of exchange rates can affect the cost of using foreign cloud services.

South African companies must consider the impact of currency exchange rates, taxes and payment terms when budgeting for cloud infrastructure and services. Data residency experts can help optimise costs by selecting cloud providers that offer transparent pricing and currency options, as well as the strategic placement of data to minimise costs.

Risk management of cloud services is equally important. Data residency also impacts network latency and data access speeds. Storing data in international data centres can result in slower access times for South African users, which can affect productivity and user experience. Additionally, remote data centres can complicate data backup and disaster recovery efforts.

Establish reliable backup procedures and disaster recovery plans that account for the geographic separation of data, ensuring the business can recover data quickly in case of an outage or data loss.

By understanding where data is stored and how it can be quickly retrieved, organisations can mitigate the potential risks of data loss or system downtime.

Finally, when choosing a cloud vendor, the availability and responsiveness of support services need to be considered.

Time zones or regions relating to data residency need to be catered for in service level agreements to ensure support is available when needed. Attention to the differences in technological capabilities between regions, political or economic stability of the region and any cultural or language barriers also need to be considered.

All of these aspects could impact the reliability and performance of the services provided, as well as the levels of support received.

In conclusion, the cloud services landscape offers remarkable opportunities for innovation and efficiency; however, it also comes with substantial risks and potential costs.

Having expertise in data residency is indispensable for navigating the complexities of cloud adoption, reducing regulatory and compliance risks, and optimising the associated costs.

To mitigate potential service restrictions, it's crucial to thoroughly evaluate potential vendors, conduct due diligence, and establish robust contracts and agreements that address any concerns.

Selecting a vendor with a strong reputation for compliance, data security and customer support is essential when housing data and computing resources outside of the local environment.

Additionally, working with experts who understand the nuances of international data residency and cloud computing can help organisations to navigate these challenges effectively.

In today's corporate world, where data is the lifeblood of business, understanding where and how it resides can be the difference between success and costly setbacks in the digital age.