Data residency refers to the geographic location where an organization's data is stored, often aligned with country or region policies and regulations. It is essential for compliance with privacy and security frameworks, such as GDPR, and can have significant implications for taxation and regulatory requirements. Data sovereignty takes this concept further by considering national laws applicable in the geographic area, while data localization requires that all data created within certain borders stay within the nation's boundaries. As organizations adopt cloud services, understanding data residency is crucial to ensure compliance with regulations and prevent unexpected costs or data breaches. This concept affects application developers who must align their work with meeting these requirements, particularly when using public cloud providers.