PUBLISHER: The Business Research Company | PRODUCT CODE: 1877596
PUBLISHER: The Business Research Company | PRODUCT CODE: 1877596
Data residency services encompass solutions and practices designed to ensure that data is stored, processed, and managed within defined geographic boundaries in compliance with local laws and regulatory requirements. These services allow organizations to maintain control over the physical and legal location of their data, supporting adherence to data protection, privacy, and sovereignty standards.
The primary components of data residency services include solutions and services. Solutions consist of software and technological tools that enable organizations to manage, store, and safeguard data within specific regions to meet local compliance obligations. Deployment modes include on-premises and cloud-based options, catering to organizations of various sizes, such as small and medium-sized enterprises (SMEs) and large enterprises. These services are applied in areas such as data storage, data security and compliance, and data processing, among others, and are utilized by key sectors including banking, financial services and insurance (BFSI), healthcare, government, information technology (IT) and telecommunications, retail, and others.
Note that the outlook for this market is being affected by rapid changes in trade relations and tariffs globally. The report will be updated prior to delivery to reflect the latest status, including revised forecasts and quantified impact analysis. The report's Recommendations and Conclusions sections will be updated to give strategies for entities dealing with the fast-moving international environment.
The rapid escalation of U.S. tariffs and the resulting trade tensions in spring 2025 are significantly impacting the information technology sector, particularly in hardware manufacturing, data infrastructure, and software deployment. Higher duties on imported semiconductors, circuit boards, and networking equipment have raised production and operational costs for tech firms, cloud service providers, and data centers. Companies relying on globally sourced components for laptops, servers, and consumer electronics are facing longer lead times and increased pricing pressures. In parallel, tariffs on specialized software tools and retaliatory measures from key international markets have disrupted global IT supply chains and reduced overseas demand for U.S.-developed technologies. To navigate these challenges, the sector is accelerating investments in domestic chip fabrication, diversifying supplier bases, and adopting AI-driven automation to enhance operational resilience and cost efficiency.
The data residency services market research report is one of a series of new reports from The Business Research Company that provides data residency services market statistics, including data residency services industry global market size, regional shares, competitors with a data residency services market share, detailed data residency services market segments, market trends and opportunities, and any further data you may need to thrive in the data residency services industry. The data residency services market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenarios of the industry.
The data residency services market size has grown rapidly in recent years. It will grow from $25.36 billion in 2024 to $29.53 billion in 2025 at a compound annual growth rate (CAGR) of 16.4%. The growth observed during the historic period can be attributed to increasing concerns over data privacy, the implementation of stricter cross-border data transfer regulations, the widespread adoption of cloud services by enterprises, the expansion of data-intensive applications, and the enforcement of regulatory compliance requirements.
The data residency services market size is expected to see rapid growth in the next few years. It will grow to $53.56 billion in 2029 at a compound annual growth rate (CAGR) of 16.1%. The growth projected for the forecast period can be attributed to the expansion of multi-cloud strategies, the rise of data sovereignty initiatives, increasing localization requirements for AI and IoT data, growing government investments in secure data infrastructure, and the escalating demand for hybrid and edge computing solutions. Key trends expected during this period include the emergence of sovereign cloud solutions, the adoption of confidential computing, the use of AI-powered data mapping tools, the application of blockchain technology for data provenance, and the automation of multi-jurisdictional compliance processes.
The growing adoption of cloud-based services is driving the growth of the data residency services market due to digital transformation initiatives. Cloud-based services refer to computing resources such as software, storage, and processing power that are delivered through the internet rather than on-premises infrastructure. The rise in cloud adoption is primarily fueled by digital transformation efforts, as organizations across industries modernize their IT systems to improve operational efficiency, reduce costs, and enable remote work capabilities. Companies implementing cloud-based solutions increasingly require data residency services to ensure that stored data complies with regional data sovereignty laws and remains within specific geographic regions. For instance, in January 2025, according to AAG IT, a United Kingdom-based IT services company, an estimated 63 percent of small and medium-sized business (SMB) workloads and 62 percent of SMB data were projected to be hosted in public clouds by 2023, compared to 57 percent of workloads and 56 percent of data in 2022. Therefore, the growing adoption of cloud-based services is propelling the growth of the data residency services market.
Key companies operating in the data residency services market are expanding regional data storage and processing capabilities to strengthen compliance and improve data privacy. Regional data storage and processing involve hosting and managing data within specific geographic boundaries to comply with local legal and regulatory standards, helping organizations mitigate legal risks and adhere to data protection regulations such as GDPR while enhancing user trust. For instance, in May 2025, OpenAI, a United States-based artificial intelligence company, introduced data residency in Europe, enabling organizations to store and process data within the European Economic Area (EEA) and Switzerland. This service allows API customers to create projects in Europe to ensure that data processing occurs within the region, while ChatGPT Enterprise and Edu customers can store content, including prompts, uploaded files, and other data, at rest in Europe. It follows enterprise-grade privacy, security, and compliance protocols, using AES-256 encryption for data at rest and TLS 1.2+ for data in transit, and it does not utilize customer data for training unless explicitly opted in. This highlights the increasing importance of data residency solutions for enterprises subject to stringent regional data protection laws.
In August 2025, Cloud Software Group, a United States-based provider of enterprise infrastructure software solutions, acquired Arctera for an undisclosed amount. This acquisition aims to strengthen Cloud Software Group's portfolio with enterprise-grade, mission-critical software, enhancing data protection, resilience, and compliance. The move improves the company's ability to address evolving global challenges in enterprise data management. Arctera is a United States-based provider of data residency services.
Major players in the data residency services market are Google LLC, Microsoft Corporation, Alibaba Group Holding Limited, Amazon Web Services Inc, Dell Technologies Inc, Tencent Holdings Limited, International Business Machines Corporation, Oracle Corporation, SAP SE, Salesforce Inc, Hewlett Packard Enterprise Company, Fujitsu Limited, Capgemini SE, NTT DATA Group Corporation, Atos SE, Equinix Inc, T-Systems International GmbH, Iron Mountain Incorporated, Digital Realty Trust Inc, Hitachi Vantara LLC, OVH Groupe SAS.
North America was the largest region in the data residency services market in 2024. Asia-Pacific is expected to be the fastest-growing region in the forecast period. The regions covered in data residency services report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East and Africa.
The countries covered in the data residency services market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Canada, Italy, Spain.
The data residency services market includes revenues earned by entities by providing services such as in-region hosting and storage setup, geo-fencing and data-routing controls, compliance assessment and certification support, residency monitoring and reporting, and in-region backup and disaster recovery. The market value includes the value of related goods sold by the service provider or included within the service offering. Only goods and services traded between entities or sold to end consumers are included.
The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD unless otherwise specified).
The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.
Data Residency Services Global Market Report 2025 from The Business Research Company provides strategists, marketers and senior management with the critical information they need to assess the market.
This report focuses on data residency services market which is experiencing strong growth. The report gives a guide to the trends which will be shaping the market over the next ten years and beyond.
Where is the largest and fastest growing market for data residency services ? How does the market relate to the overall economy, demography and other similar markets? What forces will shape the market going forward, including technological disruption, regulatory shifts, and changing consumer preferences? The data residency services market global report from the Business Research Company answers all these questions and many more.
The report covers market characteristics, size and growth, segmentation, regional and country breakdowns, competitive landscape, market shares, trends and strategies for this market. It traces the market's historic and forecast market growth by geography.
The forecasts are made after considering the major factors currently impacting the market. These include the technological advancements such as AI and automation, Russia-Ukraine war, trade tariffs (government-imposed import/export duties), elevated inflation and interest rates.