In an increasingly digital world, organisations often rely on cloud platforms and managed services to power their operations. Yet one question continues to puzzle many decision-makers: where exactly is our data, and how does that differ from where our services are hosted?
Understanding this distinction is not merely academic — it has significant implications for compliance, performance, and governance.
Data Location: Where Your Information Lives
The location of data refers to the physical place where information is stored. This might be a data centre in London, Dublin, Frankfurt, or elsewhere. The physical location determines which country’s data protection laws apply.
For example, data stored within the United Kingdom is governed by the UK GDPR and the Data Protection Act 2018. However, if that same data is replicated or backed up in an EU or non-EU data centre, additional legal frameworks may come into play, including international transfer mechanisms such as Standard Contractual Clauses (SCCs).
In short, data location is about jurisdiction and control.
Service Hosting: Where Your Application Runs
By contrast, service hosting refers to where the software or infrastructure that processes the data is operating. A company might host its application on servers in Amsterdam while storing customer data in a UK data centre.
Cloud providers like AWS, Microsoft Azure, and Google Cloud often separate these functions — your database might reside in one region, while your web application runs in another. This flexibility allows for scalability and resilience but can introduce complexities for data governance and compliance.
In simple terms, hosting location affects performance and connectivity, while data location affects compliance and trust.
Why the Distinction Matters
- Regulatory Compliance – Laws such as the UK GDPR and the EU GDPR focus heavily on where data is stored and processed. Organisations must ensure that data transfers between service and storage locations comply with relevant regulations.
- Performance and Latency – Hosting services close to users improves responsiveness. However, storing data in a compliant location might mean balancing legal obligations against technical performance.
- Disaster Recovery and Redundancy – Backups and failover systems may exist in multiple regions. It’s essential to know all the locations involved, not just the primary one.
- Transparency and Trust – Customers are increasingly aware of how their information is handled. Being clear about data location and service hosting builds confidence.
When Hosting Goes Wrong: Lessons from the AWS Outage
The recent AWS outage highlighted how dependent many organisations have become on a single hosting region or provider. Even when data remained safely stored and untouched, the services that accessed and processed that data were unavailable — causing widespread disruption across websites, applications, and APIs.
This event underscored an important truth: data location and service hosting resilience must be considered together. Storing your data in a compliant and secure location is only half the equation; if your hosting region fails, users may still lose access to critical systems, even though the data itself is intact.
For global organisations, the AWS outage also raised cross-border implications. Services hosted in one region can affect users in another, and outages can cascade across dependent systems. For businesses handling sensitive or regulated data, this demonstrates the importance of multi-region hosting strategies and clear disaster recovery planning that takes both data locality and service availability into account.
Making Informed Decisions
When choosing a provider or designing your own infrastructure, always ask:
- Where will the data physically reside?
- Where will the services (such as APIs or applications) actually run?
- How are cross-border data transfers managed?
- What happens if a hosting region fails?
- What legal jurisdictions apply in the event of a dispute?
By clarifying these questions, organisations can ensure compliance, optimise performance, and maintain the trust of their customers — even when the unexpected happens.
In conclusion, while data location and service hosting are closely related, they are not the same thing. The former defines where information lives; the latter defines where it is used. Recognising and managing that difference — as the AWS outage reminded us — is essential for building resilient, transparent, and compliant digital operations.
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