Harnessing data without betraying customer trust: the role of sovereign clouds

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Businesses today struggle to perform a delicate dance: turning customer data into actionable insights while managing customer information. This task has never been so complex and full of risks.

The term "data monetization" definitely has a negative connotation. Many assume that these are only companies that sell our personal information. There is no doubt that the collection of our personal data is increasing, and it is both troubling and frightening. But for the vast majority of organizations I speak with, data monetization represents something completely different: it's about gleaning valuable insights to reduce costs, increase employee productivity, and improve existing products and services. This form of data monetization has nothing to do with selling personal data and everything to do with improving business performance.

And yet, almost every business leader I speak with recognizes that they must maintain a delicate balance: when analyzing customer behavior for competitive advantage, it's critical that they manage their data with care to protect customer privacy. This, in turn, forces them to navigate complex data sovereignty laws that differ from country to country. There are currently 137 countries that have their own laws governing how data should be processed and stored within their sovereign borders, according to the UN. This does not include economic areas such as the European Union, which apply data protection regulations beyond national borders. All of these data laws are rapidly evolving and constantly changing.

Growing impact on the data economy

The stakes are high on both sides of this challenge. Today, 29% of all organizations are already using data to improve performance and increase revenue, according to new research conducted by Vanson Bourne and commissioned by VMware. Going forward, that number is expected to more than double, with 63% saying they expect to gain competitive advantage and revenue from their data in the next five years. In Europe alone, the impact of the data economy on GDP is expected to increase from 2.6% to 4.2% by 2025, according to the European Commission. As economic uncertainty escalates, it's no surprise that more and more business leaders are focusing on their data as an untapped revenue stream.

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Yet the downside is just as important: Organizations that violate data sovereignty laws often end up paying hefty fines. To date, more than 900 organizations have been fined for breaching the EU's Global Data Protection Regulation (GDPR), the largest totaling $877 million. The damage to brand reputation is potentially even worse, when customers realize their data has been misused and their privacy compromised. Of the nearly 6,000 organizations surveyed, 95% identified data sovereignty as a top business concern.

So how can organizations perform this delicate dance in a way that allows them to leverage customer data without betraying their customers' trust?

There is no data sovereignty without cloud sovereignty

The answer lies in the ability to share, monetize, and protect data that resides across multiple clouds. Gone are the days of customer information living in a monolithic database residing in a single cloud. Today, the average organization uses two or more