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Understanding Data Residency

Updated on February 22, 2016

If you’ve been following recent tech news, you’ll be aware that cloud computing services are making waves around the world. Cloud computing companies are changing the ways that businesses use and store their data, platforms, and software.

But with new technology comes new terminology to learn. Data residency may seem like a broad term that makes no sense, but it’s really about two things: where is your data being stored and how safe is it?

What is data residency?

Similar to permanent residency in a country, data residency is just a way to describe where your data is hosted. With cloud computing and online networks, a company’s information is no longer stored and retained in one state or country; instead, it is distributed all around the globe. Your company could be based in Japan, have servers in China, and be delivering to customers in the US, but data residency specifically pertains to where your data is being stored – in this case, your data resides in China.

Different countries have different data laws

Much like a traveller has to abide by the laws of the country they are visiting, the information you’re storing and accessing must comply with the data laws where your servers are located. When you consider where to store your information, you not only have to consider the physical server and the laws governing that space; you must also consider the countries your company is affiliated with and the countries your consumer is based in.

Don’t skimp on security

Cloud computing is expensive, but when it comes to the security of your business’ information and data, no price is too steep. Do your research and shop around before you commit to one company. A cloud provider with a reputable, secure data centre (such as Macquarie Telecom’s Intellicentre 2) is absolutely vital to protect the interests of your company. If you cut costs here, you could be paying a much higher price later down the track.

If you must, encrypt your data

If you’re still worried about data security, you can encrypt the data before you store it in your chosen country. This way your information is less accessible and you will have an added layer of privacy and security for your data. Thankfully, you won’t have to learn how to encrypt the data yourself – there are companies out there that can encrypt your data for you.

Watch this video on Cloud Server Storage & Business Data residency

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