Finding the Goldilocks Zone on data sovereignty

The conversation around digital infrastructure is changing. A decade ago, most organisations asked only whether the cloud was secure enough for sensitive workloads. Today, the debate is not about whether businesses should adopt cloud services, but how they can balance their benefits of global scale while meeting intensifying demands for local control. In turn, data sovereignty has moved from a niche concern for compliance teams to a more common boardroom issue.

However, achieving data sovereignty is not as simple as flicking a switch or installing a neat piece of software. Instead, it’s more accurate to see it as a spectrum where each organisation has a “Goldilocks zone”. This “just right” spot gives an organisation the security and control they require over their data, while also giving them the performance, agility and cost that works for them.

Sovereignty at different levels

Sovereignty ultimately boils down to the control and security of data. However, an organisation’s view of that threshold will vary based on the regulatory requirements of their industry, the nature of their operations, and performance requirements. At one end lie fully isolated, on-premises facilities, sometimes referred to as “dark sites”, often used by military and intelligence agencies for highly sensitive work. This setup maximises control and security, and though most businesses wouldn’t object to higher levels of protection, the rigidity of these systems and the costs of maintaining them make them ill-suited for use cases in many industries.

Banks, insurers, healthcare providers and energy companies must also meet strict regulations around data residency and protection. Yet they also rely heavily on connectivity, collaboration, and speed to compete with disruptive startups while meeting evolving customer demands. As a result, their systems require higher levels of flexibility and performance. This is also why many have adopted hybrid models, keeping their most sensitive data, such as patient records and financial history, local, while using the scale and efficiency of the cloud for less critical workloads.

An example of a global bank shows this challenge well. Regulators in Europe, Asia, and North America each set distinct requirements for storing customer data. For the bank, centralising too much risks compliance breaches, while excessive fragmentation creates inefficiency. The answer lies in a balanced hybrid model. They must keep account details within national borders, but operations like analytics can run at a global scale. Here, data sovereignty provides the compliance safeguard without sacrificing efficiency.

The starting point

Getting to that “just right” level is a balance that hinges on three forces. These are regulatory obligations that dictate where and how data must be stored, performance demands that require proximity and low latency, not to mention managing the risks of overreliance on a single cloud provider subject to foreign laws and pressures.

To navigate these pressures, organisations need governance and visibility. This means having clarity on where data resides, how it moves, and who accesses it. It is crucial as compliance must extend across jurisdictions and adapt as rules evolve. For this very reason, flexible infrastructure is essential today.

We also cannot afford to ignore the end of the lifecycle in our conversations of data control and security. Without secure disposal, true sovereignty is impossible. In turn, infrastructure for managing, monitoring and deleting data is quickly becoming an important building block in establishing and proving sovereignty.

The “just right” spot isn’t fixed

Sovereignty decisions influence how quickly businesses can adopt new technologies, how confidently they can enter new markets, and how much trust they inspire among customers and partners. However, data sovereignty should not be seen as a fixed state, as today’s threshold may fall short tomorrow.

It is a moving target, shaped by performance requirements and shifting geopolitics. Businesses that treat sovereignty as an ongoing process will be far better prepared for whatever comes next.

Author

Technology and Innovation programme activities

techUK bring members, industry stakeholders, and UK Government together to champion emerging technologies as an integral part of the UK economy. We help to create an environment where innovation can flourish, helping our members to build relationships, showcase their technology, and grow their business. Visit the programme page here.