Data sovereignty becomes a double-edged sword for UC
The growing demand for data sovereignty in UC requires a careful balancing act between the scalability of modern collaboration tools and control over security and privacy.
Organizations increasingly want full control over the data generated by their unified communications platforms.
IT leaders are moving away from basic collaboration features, such as screen sharing and screen blurring, to prioritize flexibility, security and tailored offerings, with security emerging as the most significant concern, according to Omdia's 2026 "Unified Communications and Collaboration" trends report.
About 62% of companies in the United Kingdom cite data sovereignty and privacy risks as the biggest factor slowing AI projects in the public cloud, according to a 2026 study commissioned by the Arqit Group.
Europe is a different beast altogether, with already well-established frameworks, such as the GDPR and various data localization laws. In contrast, the U.S. takes a more fragmented approach.
While sector-specific laws, like HIPAA, and state-level regulations, such as California's Consumer Privacy Act and Privacy Rights Act, exist, data sovereignty in the U.S. is largely a matter of choice for organizations, whereas in Europe it is considered a legal right enshrined into law.
From a UC perspective, this fragmented regulatory structure does not hinder progress, but it remains a practical challenge. Some vendors have stepped in to address the issue, introducing offerings that give users full control over where and how data is stored, accessed and governed to enable compliance with industry, state and critical international standards.
Microsoft Teams, Webex by Cisco and Zoom all support data residency, enabling users to choose where their data is stored. For true sovereignty, where governments can't access that data without specific legal reasons, private cloud or on-premises options are both widely popular.
Finding balance between control and scalability
An evolving geopolitical and digital landscape has primarily driven this demand for data sovereignty, Prachi Nema, principal analyst at Omdia, a division of Informa TechTarget.
"We moved from on-premises to cloud and are now seeing movement back toward more controlled environments," Nema told TechTarget. She noted that while data sovereignty has clear benefits, it can also lead to fragmentation, serving as a double-edged sword.
"When we talk about cyber balkanization in unified communications, we are really talking about fragmented deployments across different countries," Nema said.
Cloud and artificial intelligence offer scalability, but on-premises offers control. Finding the right balance is key.
Prachi NemaPrincipal analyst, Omdia
For those who want to have their cake and eat it too, they'll likely also jump on board with some form of data sovereignty offer or, at the very least, extend options like hybrid cloud or pure on-premises offerings.
Nema said Omdia expects to see a growing demand for regional UC as a service providers, particularly in Europe, while larger U.S. vendors may face pressure in some markets -- especially if they want a European presence.
"U.S. providers are still subject to the Clarifying Lawful Overseas Use of Data Act, which allows authorities to request data stored overseas," Nema said.
As for getting on board, organizations must start to understand their data and regulatory obligations, as sensitive workloads may need to stay on-premises or in private environments, while others can remain in the cloud.
"Cloud and artificial intelligence offer scalability, but on-premises offers control," Nema said. "Finding the right balance is key."
UC vendors split on data sovereignty
Data sovereignty not only offers organizations flexibility, but also empowers them to safeguard their data sources by using private cloud or on-premises platforms that work at the edge, said Luiz Domingos, chief technology officer and head of large enterprise R&D at Mitel.
"This delivers the control business leaders want, without being forced to compromise on the modern communications tools their employees, especially those on the front lines, need to do their jobs," he said.
In response to this growing need, Mitel launched Edge to enable organizations to maintain control over data, security and resiliency.
However, not all UC vendors share this perspective on data sovereignty.
"I don't think traditional data sovereignty is as big a deal as people think it is," said Brian Peterson, chief technology officer and co-founder at Dialpad.
Peterson said he's spoken with hundreds of C-suite executives since the launch of ChatGPT, and nearly all of their companies use it. But not once has the topic of data sovereignty come up.
"ChatGPT didn't give enterprises choices for infrastructure until last year, and those options only pertained to storage location, not where the AI was run or executed from," Peterson told TechTarget. "And in the present day, it does not guarantee that your preferences will be applied."
Despite the talk about data sovereignty as a roadblock, most enterprises still use software without perfect data controls.
"Turns out no one cares if it's helping the business grow and if they trust the company to keep their data safe with the right security and cloud practices," Peterson said.
Moshe Beauford is a writer with nearly a decade of experience covering enterprise technology, including AI, unified communications and customer experience.
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