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Entries in data security (1)


The problem with "the cloud" as a business solution

As you probably have heard Citibank was recently compromised. According to Reuters, Citigroup (the third largest U.S. bank) announced late Wednesday that the names, addresses, card account numbers, and emails of about 200,000 bankcard holders had been exposed when computer hackers accessed Citigroup's network in May. This is just one of the many cloud providers who have been hacked this last year joining the likes of Google, Amazon, Epsilon, and Sony. The bigger these companies are the harder they fall and the more prone they are to being attacked. It is a well-known fact that the reason Microsoft operating systems had more vulnerabilities and viruses was because they had the largest market share. Now that Apple has grown in market share we are starting to see more viruses on Macs then 5 years ago.

Conducting online banking or shopping has become a way of life over the last 5-10 years, but these providers are still constantly battling breaches of security. Before we start moving the standard business infrastructure into the cloud I think we first need a clear view of the risks or we could be setting ourselves up for failure. Every company should weigh the pros and cons for their business model before committing to this solution. Also, if your company is thinking about moving data to the cloud then there are other important considerations besides security. Here are a few questions you should ask before deciding on a cloud-based solution:

  1. What happens to production when you lose access to your data?  A company loses a lot of control when it ceases to run its own networks. If you lose internet access - you lose access to your data. With a business solution of a client/server model you can access your company data independent of the internet. With a cloud-based solution you are now dependent on not only your internet connection, but your cloud provider’s internet connection. Speed and accessibility can quickly become an issue especially if you’re a 24x7 business.

  2. Does your business liability insurance cover data that is lost in the cloud?  Chances are it does not, and if data is lost or damaged in the cloud you may be in a legal battle with your cloud provider.  Also, there is no current liability coverage for breach of privacy if your company stored confidential customer data or employee information in the cloud, which if compromised could lead to lawsuits. There can also be hidden costs from a breach including notification, monitoring of lost or accessed data, and other requirements that should be the provider's responsibility. However, this is often a grey area and if not listed in the contract will leave your business to pay for the responsibility and risk.

  3. Who is legally responsible of your data if it is in the cloud?  The law differs on this depending on where the data is physically located and what country it is located in. China and other countries have much different laws then do the US and this could affect any business loss claims.

If your organization owns intellectual property or believes that your data is valuable you probably need to maintain your own data infrastructure. You should however review cloud computing providers to see how a limited solution might work for facets of your business. Remember to check if they allow for the implementation of security countermeasures you believe are necessary for your business. Until cloud computing can secure a network better then you can and provide the redundancy needed to run your business, then it is highly questionable whether cloud computing can be a part of the business enterprise.