What is Data residency?
The requirement that customer data physically reside in a specific region. Increasingly material for SaaS targeting non-US customers.
Full explanation
Data residency requirements force SaaS providers to provision separate infrastructure per region. The architectural impact: separate database clusters, separate object storage, separate inference endpoints, separate logging pipelines per residency region. For startups, the practical answer is to add residency tiers as customers require — most US-only SaaS does not need EU residency until the first EU enterprise customer signs.
Example
A SaaS targeting EU enterprise customers provisions a Supabase project in eu-west-1 + an OpenAI project in EU + ensures Vercel function regions are EU-only, so customer data stays in-region end to end.
FAQ
When does data residency become a real requirement?
Typically the first EU enterprise customer who requires in-region data. Pre-that, the technical answer is 'we are US-hosted' and most early-stage prospects accept it. Post-that, you have a real engineering project to provision residency-pinned infrastructure.
Does Vercel / Supabase support data residency?
Both have region-pinning. Vercel functions can be pinned to specific regions; Supabase projects are created in a chosen region (eu-west-1, ap-southeast-1, etc.). The architectural work is making sure the rest of your stack (third-party APIs, logging, observability, inference providers) honors the same residency.