The dangers of cloud computing

On-demand apps and services bring several security risks that IT should address upfront

The idea of cloud computing -- designed around an architecture whose natural state is a shared pool outside the enterprise -- has gained momentum in recent months as a way to reduce cost and improve IT flexibility. But the use of cloud computing also carries with it security risks, including perils related to compliance, availability, and data integrity.

Many companies don't think through those risks upfront. For example, having proper failover technology in place is a component of securing the cloud that is often overlooked, notes Josh Greenbaum, principal at Enterprise Applications Consulting. Yet these same companies make sure they have failover for established services, like electricity.

"If you look around, go to any major facility, what is sitting in a box outside is an alternative power supply. They don't rely on just the grid," says Greenbaum. He argues that cloud computing should be no different.

In some cases, the risk is too great to rely on the cloud. And where the decision is made to put some services and applications in the cloud, the business must ask how that risk should be managed.

David Cearley, a vice president and fellow at Gartner, says placing limits on the use of cloud technology is a subtle issue that companies have to examine closely, measuring the risk against when and where cloud computing can be effective. For example, by giving up some control over the data, companies get in exchange cost economies. IT, along with other C-level executives, must decide if that trade-off is worthwhile. Cearley says that everything will eventually be available as a cloud service -- but at any individual business, not everything will be accessed from the cloud.

"In a shared pool outside the enterprise, you don't have any knowledge or control of where the resources run. So if you have a concern over data location, as an example, that may be a reason for not using it," Cearley says.

Security standardization has not come to the cloud

There is a huge body of standards, including services like SAS Interaction Management (download PDF), for example, that apply for IT security and compliance, governing most business interactions that will, over time, have to be translated to the cloud, notes consultant Greenbaum.

But in the meantime, until security models and standards emerge for cloud computing architecture, most of the risk and blame if something goes wrong will fall directly on the shoulders of IT -- and not on the cloud computing service providers. "The Salesforce.coms and NetSuites of the world don't offer the kind of governance, risk, and compliance [mechanisms] mandated by regulatory regimes," Greenbaum says.

A best practice guideline for cloud computing

Ultimately, the consumer of the services is responsible for maintaining the confidentiality, integrity, and availability of data, agrees Kristin Lovejoy, director of IBM's security, governance, and risk management division.

Lovejoy cites by way of example the fact that the HIPAA (Health Insurance Portability and Accountability Act) makes no specific statements regarding outsourcing or offshoring. Instead, the act's sections 164.308 and 164.314 simply require that a company get assurance from any third parties handling its data that the data will be safeguarded, she notes.

As far as placing limitations on when to deploy the cloud, Lovejoy advises that companies adhere to Geoffrey Moore's consideration of "context versus core." (Moore is a business strategist and managing partner of TCG Advisors.)

Core business practices provide competitive differentiation. Context practices deliver business activities that are typically internal, such as HR services and payroll. Both core and context can be divided into mission-critical applications and non-mission-critical ones. "If a non-mission-critical application goes offline, the company can survive," Lovejoy says.

The rule of thumb Moore comes up with, notes Lovejoy, is this: If the business practice is context and non-mission-critical, then always put it in the cloud. If it is context and mission-critical, it is likely you should make it cloud-enabled. However, if it is core and non-mission-critical, you may want to think about keeping it behind the firewall; if it is core and mission-critical, then definitely keep it behind the firewall, she says.

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