How Evolving Sovereignty Laws Are Impacting Data Center Users

What made the adoption of cloud-based technology so attractive in the past was its simple delivery model—no matter the physical or geographic boundaries, resources and data could be delivered to devices on demand. But recently, more countries have been adopting regulations that require data centers to be in the same country the data is accessed from.

In a recent report discussing the strong demand and growth of data centers, JLL said the new regulations are a smart move for the nations adopting them, but are presenting a challenge for data center users. The benefit to nations adopting the rules is twofold—the regulations afford additional data protection, while simultaneously boosting investments in those economies.

“[In the report] we referred to the sovereignty laws in context to mitigating risk for our customers who acquire data center space in the areas of the world that might pose a risk to their privacy of information,” JLL managing director Jon Meisel (pictured left) tells Bisnow. “What’s interesting is ever since Snowden this has become a big deal and it’s become a question that our customers ask. You never really had to worry about where your data center was being stored before, and now you have to give it some concern.”

Jon is referring to increased concerns regarding data security, which have spurred much of the new regulation. Governments have been increasingly concerned the growth and complexity of cloud-based tech will increase the likelihood of data security breaches, and limiting data centers to domestic development is seen as way to circumvent those risks.

However, the regulations are taking a toll on data center users. New sovereignty laws coming out of France, Brazil and Russia are pushing data center development into the states and Canada—more than ever before JLL reports.

JLL managing director Mark Bauer (above, right) says most of the firm’s clients have an international presence, and are working their networks in those foreign countries to adhere to these laws and determine where data can be stored.

“We are seeing a need for them to realign their networks internationally, where in the past all that data would just come back here to the United States,” Mark tells Bisnow. “In terms of needs, what they’ll need to do is set up additional capacities in certain markets where in the past they were able to satisfy those capacities in other areas of the world…and it’s not an easy task from a network perspective.”