Microsoft Corp. is upgrading its core cloud products with features that will give enterprise and public sector clients in the European Union more control over their data.

The initiative, announced today, is called the EU Data Boundary for the Microsoft Cloud. Engineering work is expected to be completed by the end of 2022. 

The initiative spans Azure, Microsoft 365, which includes the Office suite, and the Dynamics 365 line of business applications. The main benefit for EU-based customers is that they’ll get the ability to have Microsoft store and process all their information in data centers located within the bloc. Customers in Norway and Switzerland will have access to the feature as well.

Companies headquartered in the EU, multinationals with customers in the bloc and public sector organizations must often store information locally to meet regulatory compliance requirements. Those requirements have become more stringent over recent years as a result of developments such as the implementation of GDPR. The expanded privacy controls Microsoft is building could simplify customers’ regulatory compliance operations in the long term and thereby make its products more competitive.

Many of the tech giant’s cloud products already give organizations the ability to control where their information is kept. The new initiative announced today will bring the option to more services and more types of data.

“If you are a commercial or public sector customer in the EU, we will go beyond our existing data storage commitments and enable you to process and store all your data in the EU,” Microsoft President and Chief Legal Officer Brad Smith wrote in a blog post. “In other words, we will not need to move your data outside the EU.”

Companies will also receive the ability to set the storage location for certain auxiliary information, such as diagnostics logs used by Microsoft engineers to perform troubleshooting. “This plan includes any personal data in diagnostic data and service-generated data, and personal data we use to provide technical support,” Smith detailed.

Among the other privacy features Microsoft offers customers is the ability to encrypt data using their own encryption keys instead of ones provided by the company. The feature is mainly needed for organizations in sectors such as financial services, where managing encryption keys in-house is a requirement to meeting certain industry regulations. Microsoft said it plans to roll out support for customer-managed encryption keys to additional “core cloud services.” 

The company intends to do the same with Customer Lockbox, a specialized privacy tool available for some of its products. Customer Lockbox is designed for scenarios where a Microsoft engineer needs to access a client’s data to troubleshoot a technical issue. The tool allows organizations to block Microsoft staff from accessing their information unless they provide authorization and also logs each access event to create an audit trail.

“We are beginning work immediately on this added step, and we will complete by the end of next year the implementation of all engineering work needed to execute on it,” Smith wrote. “We will continue to consult with customers and regulators about this plan in the coming months, including adjustments that are needed in unique circumstances like cybersecurity, and we will move forward in a way that is responsive to their feedback.”

Photo: efes/Pixabay