Data localization is the requirement that data about a nation’s citizens or residents be collected, processed, and/or stored inside the country.
Overview
Data localization is a legal or regulatory requirement where a country mandates that data generated within its borders remain within those borders. This is often driven by concerns over:
- National Security: Protecting critical data from foreign surveillance.
- Law Enforcement: Ensuring local authorities can access data for investigations.
- Economic Protectionism: Encouraging the growth of local data centers and IT services.
Difference from Data Residency
While Data Residency is the choice of where to store data (often for performance or business reasons), Data Localization is a mandatory legal requirement. You might choose residency, but you are compelled to localization.
Architectural Challenges
Implementing data localization often requires:
- Geofencing: Technical controls to prevent data from leaving a specific boundary.
- Siloed Architectures: Maintaining separate infrastructure stacks for different jurisdictions.
- Data Sharding: Partitioning user data based on their citizenship or location.