Is it Time for The Anti-Cloud?
Posted by Glenn Morris on Apr 12th 2016
Many customers today believe the Cloud is a best of both worlds IT option for them, offering lower costs and improved functionality. For some, the option to use Operations Expenditures (OpEx) in monthly use payments versus Capital Expenditures (CapEx) of upfront costs are attractive.
Recently however we have heard from many customers concerned about liability with Cloud implementations and security. With the increase in data breach activity, companies of any size now need to be concerned. Within the past two years Hyatt, Wendy’s, Lowe’s, Moneytree, Staminus Communications (CA Based ISP), Jimmy John’s, Rainforest Café, Coast Central Credit Union, Landry’s Restaurants, P.F. Chang’s and Dairy Queen have all been hacked (links to articles below),.
Regarding Security, it’s only a matter of time before thieves focus on Small and medium Sized Businesses (SMB’s) and their Cloud data providers.
Jessica Hurley writes in the ITGRCForum (Link below) - “IT people need to beef up their opinions about cloud security, says a recent report by the Ponemon Institute called “Data Breach: The Cloud Multiplier Effect.” Yes, data breaches occur in the cloud. In fact, it can be triple the cost of a data breach involving a brick and mortar medium.”
It’s not just financial data liability though, it’s your customers Intellectual Property (IP) at risk. An example is offered by Steve Brachmann in is his article regarding data security (Link Below) where he shares that “80 percent of the nation’s largest 100 law firms have been affected in some way by a data breach.” So potentially not only the law firms internal data, but your client’s data also.
Lower cost is not always the case as reported in the Cade Metz article “Why Some Startups say The Cloud Is a Waste Of Money” in Wired Magazine (Link Below). “The public cloud is phenomenal if you really need its elasticity,” Frenkiel says. “But if you don’t — if you do a consistent amount of workload — it’s far, far better to go in-house.” John Hall, the chief technology officer and technical co-founder at the Santa Monica, California-based Tradesy, recently came to a similar realization. “We’ve got only seven servers, and we’ve got a tremendous amount of computing power for the price,” Hall says. “Versus what we’d get on the cloud, it’s somewhere between 70 and 100 times cheaper.”
Software companies offering SaaS based alternatives are loving the Cloud and the title of this article says it all – “Adobe Doubles Profits Thanks to Growth in Creative Cloud Subscribers” (Link Below). Software companies have figured out that it is much more profitable over the course of time to rent use of software versus customers purchasing software. This implies it could be less expensive to buy versus rent for customers over time.
So to break it down:
- All customers have Intellectual Property and customer data that should be protected.
- Security in the Cloud is a growing concern, and it is unclear whether there is a strong cost advantage to the cloud over time.
- Customers need to factor in the additional risk, and associated costs, the Cloud can present.
Many of our Managed Services Partners are reevaluating the Cloud for their customers, so if customers have moved or are considering a move to the cloud because of lower perceived cost and administration, what are the alternatives?
- Stay the course – and hope any possible lower costs offset potential loss or liability using the Cloud.
- Buy New Infrastructure, bring it in-house, and become a smaller target.
- Buy Certified Pre-Owned Infrastructure, reduce your up-front hardware costs by 50-80%, bring it in-house, and become a smaller target with more funds for IT Services or other uses.
The Cloud makes sense for some users with non-essential information storage and use needs, some examples could be email, data backups, personal storage, and some SaaS applications. But for many it does not currently offer the security and Total Cost of Ownership (TCO) needed for adoption. Please feel free to write me or reply with your feedback on this issue.
Links to Data Breaches:
http://www.infosecurity-magazine.com/news/lowes-warns-of-cloud-related-data/
http://krebsonsecurity.com/category/data-breaches/
http://www.eater.com/2016/1/27/10840964/wendys-credit-card-breach
https://securityintelligence.com/the-top-5-retail-breaches/
Link to Jessica Hurley’s Article on the ITGRCForum:
Link to Steve Brachmann Article "A Lax Attitude Towards Data Security Coudl Leave Law Firms in the Lurch"