Cloud Computing: Convenience Versus Confidence

by Emily Holbrook on April 25, 2011 · 1 comment

Cloud computing has become a convenient and cost efficient way for companies to store data while using remote, shared servers located in the “cloud.” But what is cheap and easy, isn’t always safe.

Take Amazon.com, for example. The company branched out into the cloud computing business five years ago and has since offered computing resources to thousands of businesses — most of them small with a low likelhood of having data backup and recovery services (bad risk management!).

Last week, that lapse in risk management was felt after Amazon.com’s cloud services crashed, disrupting web services for companies as large as Pfizer and as small as FourSquare.

The Amazon interruption, said Lew Moorman, chief strategy officer of Rackspace, a specialist in data center services, was the computing equivalent of an airplane crash. It is a major episode with widespread damage. But airline travel, he noted, is still safer than traveling in a car — analogous to cloud computing being safer than data centers run by individual companies.

As of this morning, many of the affected sites are back online, though “some historical data might be missing,” according to Chartbeat, a company that monitors the online presence of websites.

The risks of cloud computing is not a new topic among business owners, CIOs and risk managers — far from it. For years, talk has circled regarding privacy, compliance and legal issues. One recent article in PC World examines the risks of cloud computing. It covers topics such as who accesses your data, regulatory compliance and (probably most importantly) data loss and recovery.

Corporate cloud computing is expected to grow rapidly, by more than 25% a year, to $55.5 billion by 2014, according to International Data Corporation estimates. And as the popularity of cloud computing grows, so will the potential risks. With that in mind, companies are wise to evaluate such perils and plan for what could go wrong with such a modern technology marvel.

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Emily Holbrook is the executive managing editor for National Underwriter Life & Health and the former editor of the Risk Management Monitor and Risk Management magazine. You can read more of her writings at EmilyHolbrook.com.

{ 1 comment… read it below or add one }

Stuart Dodson April 27, 2011 at 2:56 pm

Emily,
It is true that “cloud technologies” have risks, as do any technologies or anything else for that matter. You bring up good points, but I would encourage organizations to make smart decisions for any type of technology.

The goal being to evaluate technology via factors such as risk versus reward, benefits versus limitations. For example: keeping your servers in your own HQ may offer you comfort by keeping equipment close to you, but it would also pose greater risk as compared to placing equipment in a datacenter that features optimal cooling/humidity environments, greater security controls, and multiple redundancies.

But placing your infrastructure in a datacenter still poses risk if you compare that process to creating an outsourced infrastructure that utilizes primary and secondary facilities for hot failover.

Now also ask yourself, are you backing up your own data? Because just placing equipment in a DC is only one step. Most SMBs are not backing up their own data even when they place it in a datacenter.

Smart organizations will evaluate the technology and then work to mitigate the risks by researching providers and building in redundancies. As often is the case, risk starts and ends at the human level, not the technology level.

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