Data Classification

Implementing data classification workflows to identify, categorize, and protect sensitive information in sovereign cloud environments.

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Overview

Data classification is the foundation of data sovereignty. Before you can protect sensitive data, you must first understand what data you have, where it resides, and its sensitivity level. This module covers automated and manual classification approaches.

Learning Objectives

After completing this section, you will be able to:

• ✅ Design a data classification taxonomy
• ✅ Implement automated classification with Microsoft Purview
• ✅ Apply protection policies based on classification
• ✅ Monitor classification compliance across the organization

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Data Classification Flow

The following diagram illustrates the complete data classification workflow from discovery to protection:

flowchart TB
    subgraph Discovery ["1️⃣ Discovery Phase"]
        A[Data Sources] --> B[Microsoft Purview<br/>Data Map]
        B --> C[Automated Scanning]
        C --> D[Content Inspection]
    end

    subgraph Classification ["2️⃣ Classification Phase"]
        D --> E{Classification<br/>Engine}
        E -->|PII Detected| F[Personal Data]
        E -->|Financial| G[Confidential]
        E -->|Health| H[PHI/HIPAA]
        E -->|Public| I[Non-Sensitive]
    end

    subgraph Labeling ["3️⃣ Labeling Phase"]
        F --> J[Apply Sensitivity<br/>Label]
        G --> J
        H --> J
        I --> J
        J --> K[Encryption Policy]
        J --> L[Access Policy]
        J --> M[Retention Policy]
    end

    subgraph Protection ["4️⃣ Protection Phase"]
        K --> N[Azure RMS<br/>Encryption]
        L --> O[Conditional<br/>Access]
        M --> P[Data Lifecycle<br/>Management]
    end

    subgraph Monitoring ["5️⃣ Monitoring Phase"]
        N --> Q[Activity Logs]
        O --> Q
        P --> Q
        Q --> R[Compliance<br/>Dashboard]
        R --> S{Compliant?}
        S -->|No| T[Alert &<br/>Remediate]
        S -->|Yes| U[Audit Report]
    end

    style Discovery fill:#E8F4FD,stroke:#0078D4
    style Classification fill:#FFF4E6,stroke:#FF8C00
    style Labeling fill:#F3E8FF,stroke:#5C2D91
    style Protection fill:#FFE4E1,stroke:#D13438

    style Monitoring fill:#D4E9D7,stroke:#107C10_

*Figure 1: Data classification workflow from discovery to continuous monitoring_

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Classification Taxonomy

Sensitivity Levels

Level	Description	Examples	Protection
Public	No confidentiality requirements	Marketing materials, public docs	None required
Internal	Business-only information	Policies, procedures	Basic access control
Confidential	Business-sensitive data	Financial data, contracts	Encryption + access control
Highly Confidential	Restricted access	Trade secrets, M&A data	CMK encryption + MFA
Regulated	Legal/compliance requirements	PII, PHI, PCI data	Full DLP + audit

Regulatory Classifications

For sovereignty compliance, additional regulatory labels may apply:

• GDPR Personal Data — EU data subject information
• HIPAA PHI — Protected health information
• PCI DSS — Payment card data
• ITAR/EAR — Export controlled data
• Classified — Government security classifications

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Microsoft Purview Integration

Data Map Configuration

# Register data sources with Microsoft Purview
Register-AzPurviewDataSource `
    -AccountName "contoso-purview" `
    -DataSourceType "AzureBlob" `
    -ResourceId "/subscriptions/{sub-id}/resourceGroups/data-rg/providers/Microsoft.Storage/storageAccounts/sensitivedata"

# Configure scanning rule set for PII detection
New-AzPurviewScanRuleSet `
    -AccountName "contoso-purview" `
    -Name "EU-PII-Ruleset" `
    -Kind "AzureBlob" `
    -SystemClassificationRuleName @("GDPR", "EU.SSN", "EU.Passport")

Automated Classification Rules

Rule Type	Detection Method	Examples
Built-in	Regex + ML	Credit cards, SSN, email
Custom	Regex patterns	Employee IDs, custom codes
Trainable	Machine learning	Document types, contracts
Dictionary	Word lists	Project names, locations

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Protection Policies

Label-Based Protection

When a sensitivity label is applied, automatic protection policies activate:

# Example: Confidential Label Policy
label:
  name: "Confidential"
  tooltip: "Business-sensitive information"
protection:
  encryption:
    enabled: true
    keySource: "customer-managed"
    keyVault: "/subscriptions/{sub}/resourceGroups/keys-rg/..."
  access:
    requireMFA: true
    allowedLocations: ["EU West", "EU North"]
  watermark:
    enabled: true
    text: "CONFIDENTIAL - ${user.name}"
  dlp:
    blockExternalSharing: true
    preventCopy: true

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Implementation Checklist

• Define classification taxonomy
• Deploy Microsoft Purview account
• Register all data sources
• Configure scanning schedules
• Create custom classification rules
• Define sensitivity labels
• Assign protection policies
• Enable continuous monitoring
• Train users on classification

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Next Steps

• Incident Response Workflow → — Handle security incidents
• Encryption & Key Management → — Protect classified data

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Reference: Microsoft Purview Data Classification — Microsoft Learn