Jim DeGraw, Ropes & Gray technology partner, addresses cloud computing security issues that companies should be aware of as they consider moving data to the cloud.


Clients call us up frequently and say that they are considering going to a cloud computing strategy. And one of the things that we start talking to them about quickly is, what are they doing today to protect the data in their network, and what are they thinking about moving to and how are they protecting the future when it goes to the cloud.

For cloud security, we often times find clients have taken a traditional approach and they have built themselves a nice solid box around their data – so they have their unimportant data, they have their somewhat important data, and they have their very important data all built in carefully and placed within that box. That box is a nice solid wall – there’s only one or two access points in it and it’s great. What happens is a client begins to explore moving data outside of it, so next thing you know the cheap data goes outside. And someone had a great idea, “let’s put it in a cloud service where it’s low cost – yeah, we don’t care about it, it’s cheap – if the data is lost, if the data is breached, we don’t care.” That’s great for your marketing data, maybe. But then all of a sudden, you see what happens is the medium data, the somewhat sensitive data, moves out to another cloud service provider and then all of a sudden the important data moves outside of the cloud service provider and your box is empty. You’re maintaining still this incredibly strong firewall, but all of your data is outside your firewall. At that point, what happens is you have a user who may be located in your Boston office, when your data center is in your San Francisco office, and they get caught in a snowstorm and they decide to tap into the cloud data using their home computer. And the next thing you know, their home computer has a virus on it and they’ve been breached. And the next thing you know, you get a call from the FBI, and the FBI says “hey, do you know that your really super important data is now available for sale on the black market?”

What we find out and we often times do, and this is the incident response side of dealing with the cloud, is that the clients haven’t configured the cloud properly. They’ve gone out and maybe they didn’t diligence the cloud service provider fully, so they don’t know about the capabilities the cloud service provider can have, but more importantly, they probably haven’t signed up for services such as monitoring, or proper logging, or understanding how the access controls more importantly to the cloud service provider relate to their own systems. So, they might have great access controls for the box, but they may allow anyone to log into the cloud itself from anywhere in the world. We’ve done a number of breaches where that’s been the scenario and when you don’t have full control, or full access, or full logs over what is happening in your cloud data, you have no real means of investigating it. More importantly, you are involving lots of third parties who now know that you have been breached and that your important data is at risk.

So, it’s important to diligence the cloud providers and keep that in place when you are thinking about your box and whether the data is inside the box or outside the box. Your legal requirement at times, and we roll it up – we think about all of the different regulations that are out there, whether it’s FTC guidance, or SEC rules or guidance, or specific state statutory rules – they all kind of point to the same legal construct. It can be fine to use a cloud provider – it can be fine under legal construct to use a cloud service provider to help you manager your data, but you still need to diligence that provider. You still need to keep in mind what the provider themselves are doing to protect your data. You are still responsible for the security of your data and how it is being handled. So therefore, you still need to think about how to architect it, which is why it’s important to make sure that your data, even if it’s in the cloud, is part of your security box itself.