Why Data Sovereignty Matters More Than Ever

When we talk about data sovereignty, we’re really talking about control: who has it, where your data lives, and which laws apply to it. In simple terms, data sovereignty is the principle that data is subject to the laws of the country where it’s collected, stored, or managed.

Sounds straightforward, right? But here’s where it gets tricky. Businesses operate globally, cloud services store data all over the world, and every country has its own rules. That means data sovereignty isn’t just a legal concern, it’s also a business and technology challenge.

Data Residency vs Data Localisation vs Data Sovereignty – What’s the Difference?

These three terms often get mixed up, so let’s clear that up:

• Data Residency: This is about where your data is stored and where it can be shared. Maybe you choose to keep it in a specific region for compliance, customer transparency, or cost reasons.

  
  

• Data Localisation: This is stricter. It’s a legal requirement to keep data within a country’s borders. Think of China requiring its citizens’ data to stay in China.

  
  

• Data Sovereignty: This is about jurisdiction. Even if your data is stored elsewhere, it’s still subject to the laws of the country where it was collected.

  
  

Why It’s Becoming a Big Deal

Take the US CLOUD Act as an example. It allows US authorities to access data from US-based companies, even if that data is stored in another country. For multinational businesses, this raises serious questions: Who really controls my data?

It’s not just the US either. The EU27 has been vocal about reducing reliance on US-based cloud providers to protect its own digital independence. Even Microsoft recently said “it cannot guarantee” its cloud is fully sovereign under existing US law, which shows how complex the landscape really is.

And it doesn’t stop there. More governments around the world are exploring similar legislation, so the challenge of meeting these requirements is only going to grow.

Technology Can Help, But It’s Not Just About Encryption

A lot of organisations look to encryption as the answer, and don’t get me wrong, it’s critical, but it’s not the whole picture. You need a way to:

• Automatically classify sensitive data.

  
  

• Apply the right policies to that data wherever it moves.

  
  

• Enforce “sovereign keys” so you control who decrypts it and where.

  
  

For example, Apple has famously refused to create backdoors for government access. They’ve taken the stance that encryption keys should remain in the hands of users, not providers or governments. That’s a core principle of data sovereignty: you decide who sees your data and under what laws.

But Data Sovereignty Is Only Part of the Story…

Data sovereignty is just one piece of a much bigger picture: digital sovereignty.

Digital Sovereignty = Data Sovereignty + Technical Sovereignty + Operational Sovereignty

According to Gartner and Deloitte (2025), digital sovereignty is now a strategic imperative. IDC breaks it down into three core areas: data, technical, and operational sovereignty. When approached strategically, it requires carefully balancing control, cost, speed, and innovation, not just compliance.

Digital sovereignty is about having full autonomy over data, technology, and operations within defined geographic areas while staying aligned with local regulations. It covers everything from how you protect and govern data across borders to how you maintain control over the infrastructure and software that power your business.

Where eXate Comes In

eXate makes this complexity manageable. Our platform combines centralised policy management, automated sensitive data detection, and advanced Privacy Enhancing Techniques (including key sovereignty) to ensure your data stays secure, compliant, and under your control wherever it resides.

We simplify and automate data privacy, protection, and governance across borders. That means:

• Pseudonymisation and masking at scale, ensuring sensitive data stays secure wherever it moves.

  
  

• Jurisdiction-aware data protection, so you always know how and where your data is being used.

  
  

• Built-in compliance with evolving regulations, reducing operational risk and complexity.

The Takeaway

Digital sovereignty isn’t optional anymore, it’s becoming a strategic necessity for every organisation operating in a global, regulated environment. By taking control of your data, infrastructure, and operations now, you’re not just complying with today’s rules but you’re building trust, resilience, and freedom to innovate in the future. 

And as we like to say: “Operate globally, comply locally”