Lovejoy cites by way of example the fact that the HIPAA (Health Insurance Portability and Accountability Act) makes no specific statements regarding outsourcing or offshoring. Instead, the act's sections 164.308 and 164.314 simply require that a company get assurance from any third parties handling its data that the data will be safeguarded, she notes.
As far as placing limitations on when to deploy the cloud, Lovejoy advises that companies adhere to Geoffrey Moore's consideration of "context versus core." (Moore is a business strategist and managing partner of TCG Advisors.)
Core business practices provide competitive differentiation. Context practices deliver business activities that are typically internal, such as HR services and payroll. Both core and context can be divided into mission-critical applications and non-mission-critical ones. "If a non-mission-critical application goes offline, the company can survive," Lovejoy says.
The rule of thumb Moore comes up with, notes Lovejoy, is this: If the business practice is context and non-mission-critical, then always put it in the cloud. If it is context and mission-critical, it is likely you should make it cloud-enabled. However, if it is core and non-mission-critical, you may want to think about keeping it behind the firewall; if it is core and mission-critical, then definitely keep it behind the firewall, she says.
Good security takes time
The cloud approach doesn't map naturally to how good security is typically designed, says John Pescatore, Gartner's chief security analyst and a man whose résumé reads like it came from a James Bond movie, including a stint with the FBI, the National Security Agency, and the Secret Service.
The area that worries Pescatore most is how quickly cloud-based services are updated and changed. He cites Microsoft's painstaking development of the SDLC (Software Development Life Cycle) initiative that assumes mission-critical software will have a three- to five-year period in which it will not substantially change.
"In the cloud, every two weeks we add a new feature, changing the app all the time. But the secure SDLC is not built to do that. We are going back to the old Netscape days of pushing out new features real quick, and nobody has a security cycle that moves that fast," Pescatore says.
What makes matters even worse is that the business user can't say he wants to stay on the old version. "In the cloud you have to accept the next version, possibly nullifying any security that was built into the old application or assumed through integration at the customer site.
Winners and wannabes in cloud-based security
In the near term, where security is core and mission-critical -- the upper end of the enterprise, financial institutions, and the government -- IT will have to add its own security layer. That means cloud computing won't be any cheaper than running the application in-house, says Pescatore.
"But a few years from now, strong security will be pushed down a layer, and there will be enough security baked in for all but perhaps the DoD," he says.