Data residency is the physical location or locations of an organization's data and the area of storage management involved with issues specific to managing data in those particular locations; data residency is sometimes called data sovereignty.
As the enterprise increasingly moves to the cloud computing model -- and often a hybrid cloud model -- the challenges related to data residency become more complex. One of the chief problems for the enterprise is ensuring compliance to the laws and standards of any location where data resides. Variations in those regulations means that the data itself and the ways in which it's stored, accessed and made available can differ for the same data in different locations.
Legal requirements for data privacy and residency are different from one location to another. Clients of cloud providers must comply not only with the rules in each jurisdiction where they operate but also the rules governing how data is managed at the cloud service provider locations.
Data residency areas of concern include requirements for data exportation, encryption, access and sharing.