CIORisk Management

How to Manage 5 Key Risks in Cloud Computing

Swiss cheese might be delicious, but it is full of holes. Something similar could be said of the cloud. Convenient as it is, risks still abound in cloud computing. KPMG’s Sailesh Gadia writes for Forbes with five types of risk inherent to the cloud:

  1. Data security and regulatory risk
  2. Technology risk
  3. Operational risk
  4. Vendor risk
  5. Financial risk

Risk Appetite

Data security is always going to be the most obvious risk, and not a whole lot of extremely reliable solutions exist. A private cloud—one that is on a dedicated server not shared with other businesses—could be a step in a safer direction. Technology risk also occurs in that the business’s technology must keep up with whatever the cloud is utilizing. Different cloud services make use of different technology too, so there are a lot of moving parts that must play nicely together.

About operational risks, Gadia offers this:

If you’re using a private service, it may be too expensive to make all the upgrades that each innovation demands. You may have to settle for less. Companies that share cloud services don’t have control over the applications, so it’s difficult to customize them to meet specific needs. One solution is to merge your operations and development teams. That can lead to a more integrated approach to advances in cloud technology — and less disruption.

Selecting a cloud service means placing trust in the vendor. If the vendor proves to be operating in a lackadaisical or surreptitious manner, this could come back to damage the businesses employing them. In this way, vendor risk is palpable. And lastly, financial risk occurs from underestimating how much cost is truly involved in a reliable cloud implementation. Vigilance will be required with the numbers.

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