A method and system for policy-driven traffic management in cloud-based multi-tenant systems is disclosed. Routes delivers services to end user devices. The routes are specified for policies. The policies specify residencies for the routes, cloud services, and data storage. An application running on an end user device selects a policy and a cloud service. A route corresponding to the policy, a residency specified by the policy, and the cloud service is returned to the application. An operation of the end user device in compliance with the policies is monitored to generate telemetry. An access resource server receives a non-compliance with the policy, and identify new routes, policies and configuration for remediation.