Feb 19 2009   2:47PM GMT

“Cloud Computing” Redux

Arian Eigen Heald Arian Eigen Heald Profile: Arian Eigen Heald

I know I keep harping on this “new” concept. The only “new” thing about it is the marketing around the name. It’s still off-site data storage and third-party management of corporate hardware and data. It’s got a prettier face than the old green-screen connection to the mainframe, but the concept of thin client/thick client is exactly the same.

A lot of banks that I audit use contracted time and space on mainframes as a standard part of business. From what I’ve seen of this, there are both pluses and minuses:

One Plus:
No mainframe in the basement that requires at least two technically trained engineers.
One Minus:
You are entirely reliant on the third-party for coding changes, reporting and security implementations. They will most definitely charge you for every little and big thing they can. It’s death by a thousand fees. You are also at their mercy for when they are willing to make a change for you. “Security flaw? We’ll fix it in the next release.”

Is there actually a cost savings? It varies from bank to bank. A tiny regional bank may find it difficult to acquire technically skilled employees, in which case it can make a lot of sense and save money. Consider, however, that the larger the organization, and the more IT functions are needed, the more complex management of that third-party relationship is going to be.

Second Plus:
You rely on a SAS 70 for assessing the security of the service provider.
Second Minus:
You rely on a SAS 70 for assessing the security of the service provider.

Yes, I repeated myself. Right now we only have the SAS 70 as a way to assess service providers, and that applies ONLY if the service bureau is handling financial services for the company. The SAS 70 is meant to provide assurance for the financial auditors of the client companies, NOT test to a standard or any kind.

And then, only the controls that the service bureau says are in place are the controls that are tested in a SAS 70.

There is not an independent standard to test “cloud computing” environments for secure practices.

Cloud computing vendors tout the possibility of security: “Cloud computing can be as secure, if not more secure, than the traditional environment,” said Eran Feigenbaum, director of security for Google Apps. Which, in my mind, means that it will be an additional cost to the business.

Eigen’s Rule of Thumb – you get what you pay for. How many businesses will pay for security beyond what the vendor offers as basic services? How many businesses will skimp because they can’t afford it and there is no requirement for it?

Short answer: too many.

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