If you manage regulated workloads for a US enterprise, you have probably heard the term “data sovereignty” thrown around in sales pitches and marketing copy. Most of the time, it is being used incorrectly. Region selection on a hyperscaler is not sovereignty. A US data center operated by a multinational corporation is not sovereignty. Understanding the difference matters — especially if your organization is subject to ITAR, CMMC, HIPAA, or state-level privacy regulations.
This post breaks down what US data sovereignty actually means, why it differs from simple data residency, and how to evaluate whether your cloud provider delivers true sovereignty or just marketing language.
Data Sovereignty vs. Data Residency vs. Data Localization
These three terms are often used interchangeably. They should not be.
Data Residency
Data residency refers to the physical location where data is stored. If your data lives on servers in a US data center, you have US data residency. This is the baseline requirement — your data is physically stored within a specific geographic boundary.
Most cloud providers support data residency through region selection. You pick “us-east-1” and your VM instances and block storage reside in that region. Done.
Data Localization
Data localization is a legal or regulatory requirement that data must remain within a specific jurisdiction. Countries like Russia, China, and Indonesia have data localization laws that mandate data about their citizens be stored within their borders.
Data localization is about compliance with a government mandate. It does not necessarily address who controls the data or who has access to it — just where it must physically reside.
Data Sovereignty
Data sovereignty means the data is subject to the laws of the jurisdiction where it physically resides and is controlled by entities within that jurisdiction. Sovereignty is residency plus jurisdictional control.
For data to be truly US-sovereign:
- The data must be stored on US soil
- The infrastructure must be operated by a US-based legal entity
- Access to the data must be governed by US law
- Personnel with physical or logical access to the data must be subject to US jurisdiction
- The parent company must not be subject to foreign government data access requests
This is not just a technical distinction. It is a legal and operational one.
Why Region Selection Is Not Sovereignty
The three major hyperscalers all offer the ability to select US regions for your workloads. This satisfies data residency, but it does not deliver sovereignty. Here is why.
Multinational Corporate Structure
Even if your data resides in a US region, the parent company may be headquartered abroad or have substantial international operations. That corporate structure exposes your data to foreign government requests under laws like the UK Investigatory Powers Act or the EU GDPR Article 48.
A US subsidiary of a multinational corporation can still be compelled to produce data stored in the United States if the parent company is subject to foreign jurisdiction. The CLOUD Act attempts to address this with bilateral agreements, but the complexity remains.
Support and Operations Staff
Your data may reside in us-east-1, but who has access to it? If support personnel, operations teams, or platform engineers can access your environment from offices in India, Ireland, or Singapore, you do not have sovereignty.
For workloads subject to ITAR, this is a dealbreaker. ITAR requires that data be accessible only by US persons. A global support organization disqualifies a platform from ITAR use, even if the data resides in the United States.
Metadata and Control Plane
Even if your application data stays within a US region, metadata about your workloads — resource identifiers, API logs, billing records, account details — often flows through centralized global systems. That metadata is data, and in many cases, it is regulated data.
A truly sovereign platform keeps the control plane within the same jurisdiction as the data plane. If your API calls are logged in Dublin, you do not have full sovereignty.
Encryption Key Management
Where are your encryption keys stored? Who manages them? If key management infrastructure is operated as a global service with key replication across regions, your encrypted data is not truly sovereign — anyone with access to the key escrow can decrypt it.
True sovereignty requires that encryption keys remain within the same jurisdiction as the encrypted data, managed by personnel within that jurisdiction.
What Regulations Actually Require or Benefit from Sovereignty
Not every workload requires data sovereignty. For many organizations, data residency is sufficient. But if your business operates under certain regulatory frameworks, sovereignty becomes a requirement, not a preference.
ITAR (International Traffic in Arms Regulations)
ITAR governs the export and access of defense-related articles and technical data. If your organization is a defense contractor or produces technology subject to ITAR, your data must be:
- Stored on US soil
- Accessible only by US persons (US citizens or permanent residents)
- Managed by a US-based entity
Region selection does not satisfy ITAR. You need a platform with US-only operations and personnel clearance.
CMMC (Cybersecurity Maturity Model Certification)
CMMC is the DoD’s framework for ensuring defense contractors meet cybersecurity requirements when handling Controlled Unclassified Information (CUI). While CMMC does not explicitly mandate data sovereignty, the CUI controls around access, physical security, and incident response align closely with sovereign infrastructure.
Contractors working toward CMMC Level 2 or 3 certification benefit from platforms designed to support workloads subject to these requirements.
HIPAA (Health Insurance Portability and Accountability Act)
HIPAA does not require US-only hosting, but it does impose strict controls around who can access Protected Health Information (PHI), how that access is logged, and how Business Associate Agreements (BAAs) are structured.
If your cloud provider has global support teams with access to your environment, the BAA becomes more complex. A US-sovereign platform simplifies compliance by eliminating cross-border access concerns.
SOX (Sarbanes-Oxley Act)
SOX requires publicly traded companies to maintain accurate financial records and implement controls around data integrity and audit trails. While SOX does not mandate sovereignty, financial data is often sensitive enough that organizations prefer to keep it within a single legal jurisdiction to simplify audit and legal discovery processes.
State Privacy Laws
California (CCPA/CPRA), Virginia (VCDPA), Colorado (CPA), Connecticut (CTDPA), and other states have enacted privacy laws that give consumers rights over their data. While none explicitly require data sovereignty, multi-state organizations benefit from consistent jurisdictional control to simplify compliance and legal response.
Government Contracts and FedRAMP
Federal agencies often require cloud providers to achieve FedRAMP authorization. FedRAMP does not mandate sovereignty, but many agencies impose additional requirements around US-based operations, personnel clearances, and data residency guarantees.
For organizations pursuing government contracts, a US-sovereign platform reduces compliance friction.
The Practical Differences: Sovereignty in Action
What does sovereignty look like in practice? Here are the operational and legal differences between a residency-only platform and a sovereign one.
| Consideration | Data Residency Only | True Data Sovereignty |
|---|---|---|
| Physical Access | Data center may be US-based, but operated by a multinational with global personnel | US data center with US-based operations staff only |
| Encryption Keys | Keys may be managed globally or replicated across regions | Keys remain within US jurisdiction, managed by US personnel |
| Legal Jurisdiction | Parent company may be subject to foreign government requests | US-based legal entity subject only to US law |
| Support Access | Global support teams with access to customer environments | US-based support teams only |
| Data Center Ownership | May be owned by foreign entities or third-party colocation providers | US-owned and operated facilities |
| Metadata and Logs | API logs and metadata may be centralized globally | All logs and metadata remain within US jurisdiction |
| Incident Response | Security incidents may be investigated by teams in multiple countries | Incident response conducted by US-based personnel only |
How Open Edge Delivers US Data Sovereignty
Open Edge is designed from the ground up to provide true US data sovereignty for enterprises that require it. Here is how we deliver on that commitment.
US-Owned and Operated
Open Edge is a US-based limited liability company (Open Edge LLC) with no foreign parent entity. We are not a subsidiary. We are not a regional office of a global corporation. All decisions, all operations, and all infrastructure management occur within the United States.
Enterprise-Grade US Data Centers
Our infrastructure is deployed in Iron Mountain VA-1 (Manassas, Virginia) and STACK Infrastructure POR02A (Hillsboro, Oregon — coming Q2 2026). Both facilities are US-owned and operated with 24/7 on-site security, biometric access controls, and redundant power and cooling.
No data replication to foreign jurisdictions. No cross-border backups. Everything stays on US soil.
US-Based Support Teams
Every person with access to customer environments is based in the United States. Support, operations, and engineering teams are all US-based. We do not outsource support. We do not use offshore contractors.
For organizations with ITAR or personnel clearance requirements, this is a foundational requirement.
Encryption at Rest and in Transit
All data stored on Open Edge infrastructure is encrypted at rest using AES-256. All data in transit between your workloads and our APIs is encrypted using TLS 1.2 or higher. Encryption keys are managed within the same US data centers where your data resides — no global key replication.
Customer Data Ownership
You own your data. Period. Open Edge does not claim any rights to customer data. We do not mine it, analyze it, or use it for any purpose other than delivering the service you contracted for. Our Terms of Service and Data Processing Agreement make this explicit.
Contractual Data Residency Guarantees
Every customer agreement includes contractual language guaranteeing that your data will remain within US jurisdiction. This is not a policy we can change on a whim — it is a binding legal commitment.
Security and Compliance Frameworks
Open Edge follows SOC 2 and ISO 27001 control frameworks across our operations — including access management, change control, incident response, encryption, and monitoring. Our platform architecture is designed to support workloads subject to ITAR requirements, CMMC security controls, HIPAA-eligible workloads, SOX audit trail capabilities, and state-level privacy laws.
We maintain transparency about where we are in our compliance journey. If your organization has specific certification requirements or timelines, we are happy to discuss your needs and provide architecture documentation.
When Sovereignty Matters (and When It Does Not)
Not every organization needs data sovereignty. If you are running a SaaS product for consumers, data residency is probably sufficient. If you operate in industries without strict regulatory requirements, region selection may be enough.
But if you are a defense contractor, a healthcare provider handling PHI, a financial services firm subject to SOX, or a government contractor pursuing CMMC certification, sovereignty is not optional. It is table stakes.
And if your legal, compliance, or security teams spend time debating whether a hyperscaler’s regional data guarantees are sufficient for your regulatory posture, the answer is probably no. A purpose-built sovereign platform eliminates the ambiguity.
Questions to Ask Your Cloud Provider
If you are evaluating cloud providers for regulated workloads, here are the questions you should be asking:
- Where is your parent company headquartered, and what jurisdictions is it subject to?
- Are support and operations personnel based exclusively in the United States?
- Where are encryption keys stored and managed?
- Does metadata (API logs, billing records, account data) remain within US jurisdiction?
- Can you provide a contractual guarantee that data will not leave US soil?
- What is your incident response process, and who conducts investigations?
- Are your data centers US-owned and operated, or are they third-party colocation facilities?
- Do you have customers operating under ITAR, CMMC, or similar frameworks?
If the answers are vague, or if the provider cannot commit to US-only operations, you do not have sovereignty.
Ready to Talk Sovereignty?
Open Edge was built for enterprises that need more than region selection. If your organization operates under ITAR, CMMC, HIPAA, SOX, or state privacy regulations, we can provide the architecture documentation, compliance mappings, and contractual guarantees your legal and security teams need.