5 major security concerns with cloud vendors that outsource to third parties

According to a Gartner prediction cloud adoption will rise to $250 billion by 2017. 42 percent of IT leaders plan to spend more on cloud this year as per a ComputerWorld forecast.

These statistics prove how the cloud is becoming increasingly popular as the enhanced flexibility and the potential cost savings that cloud computing offers is continuing to intrigue an increasing number of businesses.

However, there is a thin difference on how cloud vendors operate. One type of vendor offers proprietary cloud services, while the other outsources some of the services covered in the contract to another cloud-computing service provider.

While every business is aware of the first type of provider, most organizations fail to consider the security concerns involved if their provider outsources to a third party.

In this article, we will cover several security concerns involved, which you need to be aware of when your cloud vendor outsources its services to a third party. Let’s take a look at them.

1. Contract Complexity

If your cloud vendor outsources some of its services to a third party, it will increase the complexity of your contract with the vendor, especially when it comes to determining which vendor is responsible for which action, or the functionalities that have been outsourced.

Your cloud vendor may give you proper business continuity plans to assure your data will be safe, but what if the third party fails?

Additionally, your vendor may abide by the security policies outlined in the contract but that doesn’t mean the third party will adhere to the same policies as well.

2. Legal Complexity

Your cloud vendor may be available nearby, but there is a high probability that the third party infrastructure is located in a different country.

So any data stored or processed in that country can make your organization liable for privacy obligations in that country’s jurisdiction. That can result in a number of legal issues.

3. Non-Transparent Security Practices

The better security and encryption standard your cloud vendor offers, the more secure your data will be. While you can easily identify the security standards followed by your proprietary vendor, it is not possible to assess the third party vendor’s security practices.

Additionally, with a proprietary cloud vendor, you can easily check what access protocols they have in place, but with third parties, you can’t know how strong their access protocol is and any negligence by them can result in data loss or theft.

4. Difficult to Audit

The security procedures, compliance, and physical site security of third party providers are hard to audit. You can’t send your organization’s IT administrator as an external auditor to verify and access the data center or physical premises where your data is located.

5. Data Ownership

Your direct vendor may agree that they will destroy your data at the end of the relationship, but what about the third party vendor. You won’t know if they don’t destroy your data, and as a result, your data will stay vulnerable to theft.

Data security and privacy risks are key issues for every organization so it is important to address these in the cloud agreement clearly to mitigate those risks.

Does your cloud provider outsource its services or does everything in-house? Have you faced any security or transparency challenges so far? Let us know in the comments below.