The ongoing conflict in Ukraine, EU sanctions and unauthorised military flights near UK airspace. Not since the days of the Cold War has Russia felt so distant from the West.
The latest action from the Kremlin sure to drive a wedge between Russia and the outside world is the country’s data sovereignty laws, which threaten to usher in a type of digital Iron Curtain.
Back in July 2014, the State Duma or parliament passed a law decreeing that all personal data concerning Russian nationals must be stored within the country, meaning social networks and other online businesses must have a physical presence in order to operate there, whether that means renting storage from a domestic data centre or opening a Russian branch of their own.
The new ruling comes into effect on 1st September 2015, meaning businesses do not have long to decide on their next move. Companies will be reticent to abandon a country with a population in excess of 140 million and a growing online audience standing at approximately 50 per cent of that figure.
eBay and PayPal are just two of the companies to have agreed to the ruling, with both firms asserting that they will be moving data regarding their Russian customers ahead of the deadline.
However, further legislation passed in the last few months will also make it more challenging for businesses to relocate within the Russian Federation. In late February, the Duma increased the potential fines for businesses that flout the data protection rules, while in May, a law was passed allowing the Russian government to ban any foreign or international NGO that it deems to be “undesirable.”
While Russia has always been viewed as having a more draconian Internet policy – it has been accused of overzealous online censorship in the past – the new legislation is unexpectedly oppressive.
However, businesses should not view the new government restrictions as impenetrable, but rather look at the ways in which technology can enable them to continue their relationships with Russian customers.
Under the new rules, businesses have the opportunity to explore other ways of hosting data outside of on-premise solutions. Data centre operators based in Russia such as IXcellerate offer companies the option to transition their data from its present location to one which complies with the current legislation.
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Migrating data from one physical location to another can be a challenging and time consuming process and many businesses will be concerned about potential disruption to their services, integration with existing networks and security issues. By enlisting the help of a Managed Service Provider (MSP), companies can host their data in Russia, while leaving the rest of their operations uninterrupted.
The benefit of cloud technology means that hosting data abroad is a much smoother process than it was even just a few years ago. By enabling organisations to host data in different parts of the world they are able to serve a truly global customer base while complying with regional data laws.
Choosing the right MSP will, of course, be crucial and companies will likely be drawn to organisations with experience of dealing with Russian data law, particularly given its propensity to change in recent months. IXcellerate also offers businesses strong connections with the UK and other parts of Western Europe, placating concerns of geographical divisions arising within their organisation.
Businesses currently serving Russian customers but storing data overseas have an important decision to make over the next few months. Access to certain sites has already been blocked by the state regulator Roskomnadzor and any sites that do not comply with the ruling by the 1st September deadline will be shut down.
In spite of the restrictions, companies should be looking to cement their online presence in Russia now. Internet usage in the country is growing rapidly and Russian is now the second most used language online after English.
If companies want their voice to be heard globally, a presence in the country is essential and cloud hosting within the Russian Federation gives businesses the means to achieve this. The new data protection laws are challenging, but if companies are willing to adhere to them they will gain access to a wealth of opportunities in the Russian market.