Data Residency: things to know

data residencyRemember the days when your computer had a whopping 20GB of storage, and that was just enough? Now take a look at 2012 and compare – 20GB is hardly enough storage for a USB device and your phone probably even has more storage capacity than the computers that were state-of-the-art a decade ago.

Increasingly, the storage space we have in our day-to-day lives is not enough, particularly for business owners and companies – because of this, many are moving their information to cloud hosting options with companies like Macquarie Telecom Ltd.

However, as a relatively new form of data storage, the cloud can be difficult to understand and aspects of the process can be miscommunicated, misappropriated, and misunderstood. Data residency is one – here are some things you need to know about this integral component of cloud computing.

[Read also: Top Five Benefits of Cloud Computing (For Entrepreneurs)]

What is data residency?

This is the million dollar question – what exactly is data residency? While it may seem like a fancy piece of jargon, it’s really not that confusing. Much like citizens have residency in certain countries, data also has residency within the country it “lives” in – and this may not necessarily be the country your company or organization is located in. You could have your headquarters in Nepal, your data in the US, and your customers could be located in Japan – in this situation, your data is a “resident” of the United States.

Different data laws apply for different companies

Like China’s laws for citizens differ from Australia’s laws for citizens, so too do data laws. If your data is stored in a different country, then your data is subject to that country’s data laws. In the US, all data is under regulation by the Patriot Act – this means that all data held by US companies and their subsidiaries is within the territorial bounds of the US, even if they are hosted in a different country.

Data residency can have major impacts on your clients and business

A service provider in New Zealand ended up in a bit of a pickle when he resold US-based cloud services. As he breached US copyright laws, his data and servers were seized and his customers suffered as a result. While data residency can seem like a small subject to consider, the consequences can have negative impacts on your company if you’re not careful.

Data can be protected and encrypted

If you’re storing your data in a different country, you want to ensure that your clients’ information is secure and your company’s interests are kept within your company. While all hosting companies should have high security levels, you can add extra protection by encrypting your data. No amount of security is too high when it comes to your business, after all.


  1. Darnell Jackson
    • Peter Lee
  2. Ray
  3. Mahendra Chhimwal
    • Peter Lee