Data residency refers to the geographic location where data is stored and processed, often dictated by regulatory, operational, or legal requirements. Unlike data sovereignty, which emphasizes jurisdictional control, data residency focuses on the physical location of data and whether it aligns with national, sectoral, or contractual mandates.
For example, an enterprise may store customer data in India to comply with local privacy laws, even if the organization operates globally. In this context, data residency becomes a foundational element of trust, compliance, and infrastructure design.