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Data Privacy Laws: Cutting the Red Tape an Ovum Report Commissioned by Intralinks Contents Executive Summary

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Data Privacy Laws: Cutting the Red Tape an Ovum Report Commissioned by Intralinks Contents Executive Summary Data Privacy Laws: Cutting the Red Tape an Ovum report commissioned by Intralinks Contents Executive Summary.......................................................................................................................................................... 1 Introduction........................................................................................................................................................................... 2 Enterprises face major compliance challenges......................................................................................... 4 Continuing cloud usage is inevitable............................................................................................................................................... 4 Organizations aren’t taking basic steps to protect sensitive data.................................................................................................... 5 Data privacy regulations aren’t uniform, leaving global businesses vulnerable and confused........................................................... 6 Pending European regulations will set the standard for global data privacy, but will jeopardize the EU economy.............................. 7 Data location is the critical point of control but is hard to define...................................................................................................... 8 Regulations impose huge costs...................................................................................................................................................... 9 US-based organizations are under pressure................................................................................................................................... 9 Recommendations............................................................................................................................................................. 10 Appendix.................................................................................................................................................................................. 11 Methodology................................................................................................................................................................................... 11 Author............................................................................................................................................................................................. 11 Ovum Consulting............................................................................................................................................................................ 11 Copyright notice and disclaimer...................................................................................................................................................... 11 ExecutiveExecutive Summary summary Business leaders are deeply pessimistic about the potential consequences of new A global privacy rights movement poses data privacy regulations significant new business and economic risks Our survey shows that organizations are aware of data privacy as an National governments are enacting new, stringent data privacy laws to issue but are struggling with how to respond. When we asked about protect citizen data, guard national security interests, and potentially the pending European Union (EU) General Data Protection Regulation provide a boost to local industries. This rush to protect sensitive and (GDPR), 52% said they think it will result in business fines for their personally identifiable information threatens current business strategies, company, and two-thirds expect it to force changes in their European practices, and processes widely used by organizations that operate business strategy. internationally. To explore the impact of evolving data privacy regulations and data The cost of regulatory compliance will be sovereignty, Ovum was commissioned in Q3 2015 by Intralinks to substantial, but the cost of non-compliance conduct an international survey of 366 IT decision-makers. will be higher Key findings include: Over 70% of respondents expect to increase spending in order to meet Key findings include: data sovereignty requirements, and over 30% expect budgets to rise by more than 10% over the next two years. Of those who plan to update Data privacy regulations are coming data privacy strategies in the next three years, 38% plan to hire subject directly into conflict with cloud, software- matter experts, and 27% will hire a chief privacy officer. as-a-service (SaaS), and mobile computing US-based organizations are particularly practices within enterprises vulnerable Cloud computing is an established part of the enterprise IT landscape, The Snowden Effect is real. Among 20 industrialized economies, the and adoption is expected to continue to increase over the next decade. US is ranked as the least trusted country and the most likely to gain Information-intensive business processes rely on SaaS, and this, coupled unauthorized access to sensitive information with China coming in with a shift to mobile computing platforms, means controlling data second and Russia third. New regulations will also put US companies at location and complying with privacy regulations is extremely challenging. an even greater disadvantage, with 63% of respondents believing that Nevertheless, over the next three years, 78% of survey respondents plan the proposed EU GDPR regulations will make it harder for US companies to use cloud and SaaS-based applications, even for storing and sharing to compete, and 70% thinking the new legislation will favor European- sensitive and regulated data based businesses. 1 Most organizations aren’t effectively using technology to address data privacy concerns Introduction Alarmingly, many organizations aren’t taking advantage of available Even before Edward Snowden’s revelations showed the full extent of technologies that protect sensitive data. Only 44% of survey respondents the US National Security Agency’s (NSA) electronic surveillance, data monitor user activities and provide alerts to data policy violations, and privacy was becoming a global issue. Government snooping combined only 53% classify information to align with access controls. Almost half with massive data leaks over the last few years have forced national (47%) have no policies or controls that govern access to consumer cloud governments to recognize that current privacy laws have outlived the storage and file-sharing systems like Dropbox. paper-based age and need to catch up to the realities of the digital Global organizations need an orchestrated economy. The result has been an unprecedented wave of new legislation designed to govern how certain sensitive data can be gathered, stored, approach to data sovereignty that covers processed, and shared. people, process, and technology Countries as diverse as Brazil, Singapore, and Russia are tightening Business leaders recognize the need to take a balanced approach regulations. The EU is nearing the end of a lengthy process of revising to address data sovereignty and data privacy. When asked about legislation in this field, which will affect any organization operating in investment strategies, 55% said they are planning new training for employees, 51% will amend and adapt policies, and 53% will prepare by its member countries. These restrictions are being imposed because adopting new technologies. organizations are becoming borderless and employees more mobile, which along with a migration to cloud-based IT systems can cause Organizations face a patchwork of conflict with these new laws. The compliance obligations arisingfrom contradictory and conflicting global privacy legislation are becoming more complex, particularly for organizations that regulations, and need technology options to operate across different jurisdictions, and particularly in the context of address all eventualities how legislation applies to data that is stored by cloud-based services. The data sovereignty revolution threatens to create a Balkanized In Q3 2015, Ovum was commissioned by Intralinks, a leading provider technology landscape, with different jurisdictions imposing inconsistent of enterprise cloud content collaboration solutions, to understand the and often incompatible mandates for how personally identifiable data is implications of data privacy regulations on global businesses. stored, processed, and shared. This is already creating confusion and A survey was conducted to explore the following questions: uncertainty, leaving fundamental questions unanswered, such as how to interpret data location requirements. Organizations need technology options that enable them to react to a rapidly changing regulatory environment. 2 Figure 2: • How are organizations preparing to deal with data sovereignty? • What will be the impact of new data privacy regulations? • How will organizations adapt their business to meet new privacy obligations? • What are the differences of opinion in different countries and in different jurisdictions? • What technology decisions will support data privacy obligations? Respondents analyzed by • What are the best practices for adapting to new regulatory regimes? industry Ovum’s survey incorporates input from 366 respondents from across the globe, within organizations of different sizes, in various industries (see Figures 1, 2, and 3). The demographics were chosen deliberately to include a variety of organization types and countries
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