Compliance used to mean following a rulebook. Increasingly, it means juggling dozens of rulebooks that nobody wrote to work together, and that challenge is landing hard on companies operating across borders.
A new report from research firm Omdia finds that diverging national data sovereignty rules are piling fresh burdens onto global businesses, as governments across every major region tighten their grip on how data moves, where it sits, and who gets to touch it. The findings point to rising costs, fragmented legal environments, and a compliance landscape that keeps shifting before organizations finish adapting to the last change.
More than 100 countries now enforce some form of data sovereignty or localization requirement. That number sounds like progress toward a global standard. In practice, it works out to the opposite. Definitions vary, scope varies, and enforcement varies so widely that companies cannot rely on a single compliance model across their operations. What passes as acceptable data handling in one jurisdiction triggers violations in another, and legal teams end up interpreting overlapping frameworks that nobody designed to interact at all.
The regional picture adds further complexity. The European Union introduced its European Cloud Sovereignty Framework in late 2025, placing meaningful constraints on where data can travel when equivalent protections do not exist at the destination. Across Asia, countries including India, Vietnam, and Indonesia keep expanding localization requirements, with some mandating domestic storage and others requiring government approval before data crosses any border. The United States takes a sector-by-sector approach with no unified federal framework, creating its own variety of gaps and inconsistencies for multinationals to navigate.
For businesses, the operational consequences show up quickly. Companies now duplicate infrastructure to keep data within specific borders, build out regional compliance teams, and redesign workflows that originally centered on unified systems. All of that adds cost, and not always in ways that organizations can predict or budget for in advance.
A broader trade-off is also emerging. As data grows more localized, running global platforms efficiently gets harder. Silos expand. Integration becomes more complicated. Systems turn more regional, more layered, and more expensive to maintain over time.
Omdia’s core finding is difficult to argue with: fragmentation is not a temporary phase companies can wait out. For the foreseeable future, it is simply the operating environment.
