A new International Data Corporation (IDC) whitepaper sponsored by AWS, Trusted Cloud: Overcoming the Tension Between Data Sovereignty and Accelerated Digital Transformation, examines the importance of the cloud in building the future of digital EU organizations. IDC predicts that 70% of CEOs of large European organizations will be incentivized to generate at least 40% of their revenues from digital by 2025, which means they have to accelerate their digital transformation. In a 2022 IDC survey of CEOs across Europe, 46% of European CEOs will accelerate the shift to cloud as their most strategic IT initiative in 2022.
In the whitepaper, IDC offers perspectives on how operational effectiveness, digital investment, and ultimately business growth need to be balanced with data sovereignty requirements. IDC defines data sovereignty as “a subset of digital sovereignty. It is the concept of data being subject to the laws and governance structures within the country it is collected or pertains to.”
IDC provides a perspective on some of the current discourse on cloud data sovereignty, including extraterritorial reach of foreign intelligence under national security laws, and the level of protection for individuals’ privacy in-country or with cross-border data transfer. The Schrems II decision and its implications with respect to personal data transfers between the EU and US has left many organizations grappling with how to comply with their legal requirements when transferring data outside the EU.
IDC provides the following background on controls in the cloud:
- Cloud providers do not have unrestricted access to customer data in the cloud. Organizations retain all ownership and control of their data. Through credential and permission settings, the customer is the controller of who has access to their data.
- Cloud providers use a rigorous set of organizational and technical controls based on least privilege to protect data from unauthorized access and inappropriate use.
- Most cloud service operations, including maintenance and trouble-shooting, are fully automated. Should human access to customer data be required, it is temporary and limited to what is necessary to provide the contracted service to the customer. All access should be strictly logged, monitored, and audited to verify that activity is valid and compliant.
- Technical controls such as encryption and key management assume greater importance. Encryption is considered fundamental to data protection best practices and highly recommended by regulators. Encrypted data processed in memory within hardware-based trusted execution environment (TEEs), also known as enclaves, can alleviate these regulatory concerns by rendering sensitive information invisible to host operating systems and cloud providers. The AWS Nitro System, the underlying platform that runs Amazon EC2 instances, is an industry example that provides such protection capability.
- Independent accreditation against official standards are a recognized basis for assessing adherence to privacy and security practices. Approved by the European Data Protection Board, the EU Cloud Code of Conduct and CISPE’s Code of Conduct for Cloud Infrastructure Service Providers provide an accountability framework to help demonstrate compliance with processor obligations under GDPR Article 28. Whilst not required for GDPR compliance, CISPE requires accredited cloud providers to offer customers the option to retain all personal data in their customer content in the European Economic Area (EEA).
- Greater data control and security is often cited as a driver to hosting data in-country. However, IDC notes that the physical location of the data has no bearing on mitigating data risk to cyber threats. Data residency can run counter to an organization’s objectives for security and resilience. More and more European organizations now are trusting the cloud for their security needs, as many organizations simply do not have the resource and expertise to provide the same security benefits as large cloud providers can.
For more information about how to translate your data sovereignty requirements into an actionable business and IT strategy, read the full IDC whitepaper Trusted Cloud: Overcoming the Tension Between Data Sovereignty and Accelerated Digital Transformation. You can also read more about AWS commitments to protect EU customers’ data on our EU data protection webpage.
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