Due to legal requirements or customer requriements, some customers must have their data located in a datacenter in a specific geographic region. For example, German companies usually want data privacy according to Germam standards which requires either a data center in Germany or a data center outside of Germany but compliant with the regulations. Chinese law requires the data to reside on Chinese servers.
So how about enabling geolocation of the data, maybe based on the legal entity id? So for example the records in the Contoso example with data area id "DEMF" should physically be on a server in Germany, and those with CNMF should reside on a different server. This would allow global single instance with compliance to local laws, and might also even improve performance if Dynamics servers are also distributed. They would be mostly communicating with their local datacenter SQL server instance.
This should be possible to implement using the partitioned tables and indexes feature of SQL server: