UK: Legal Aspects Of Cloud Computing: Cloud Security

Last Updated: 11 June 2018
Article by Richard Kemp

LEGAL ASPECTS OF CLOUD COMPUTING: CLOUD SECURITY1

A. ENTERPRISE CLOUD ADOPTION

  1. After GDPR. After the bow wave of GDPR readiness legal work in the run up to 25 May 2018, IT lawyers may be forgiven for thinking that the biggest change is now behind them. But the truth is that GDPR heralds rather than ends a period of change in IT law and regulation as business transforms through the adoption at scale of new technology. Nowhere is this more clearly shown than in the legal aspects of the rapidly developing area of cloud security.
  2. Enterprise computing is migrating to the cloud quickly . A central feature of this transformational change is the epic migration now well underway in enterprise (large organisation) computing from 'on premise' – traditional IT infrastructure at the user – to 'in-cloud' – open access to the public cloud, the more dedicated resources of the private cloud and their hybrid cloud combination. The development of the enterprise cloud is as significant as the migration of electricity generation out of the factory to the UK national grid in the 1930s but with many more facets, as each component of IT infrastructure – power, compute, network, memory, storage and software - gets the cloud's 'as a service' treatment.
  3. Increasing data volumes are fuelling cloud growth. The cloud, as an extension of Moore's Law, demonstrates the marvel of compound growth, and cloud data centre economics are truly mind boggling: driven by the Internet of Things (IoT), data volumes created are growing by 30% to 40% annually, so will increase by 4x to 5x over the next 5 years. Data created is currently two orders of magnitude (100x) higher than data stored, so data stored in the cloud's data centre 'core' has some catching up to do, and in 5 years' time will be 5x to 10x higher than today.2 At the same time, cloud power consumption rises3 whilst everything inside the data centre gets smaller and faster: technology advances in cloud storage for example mean that storage device space - 'tin on the floor' - will reduce to a small fraction of what it is today even as data volumes stored rise exponentially.
  4. Cloud Service Providers (CSPs) are growing rapidly. Networking company Cisco Systems in its current Global Cloud Index forecasts that by 2022 there will be over 600 of 'hyperscale' data centres globally, operated by 24 CSPs and by then accounting for over 85% of the public cloud's installed server base and workloads4. The development of the cloud is particularly visible at the moment in the cloud revenue growth of the three largest CSPs, with Amazon Web Services (AWS) increasing by 50% annually and Microsoft and Google each by around 100%: by 2020, cloud revenues at AWS, Microsoft and Google are forecast to reach $44bn, $19bn and $17bn respectively.5
  5. Cloud's share of enterprise IT is set to rise from 10% to 45% by 2026. Aggregating the elements of 'traditional' enterprise computing (hardware, services, applications and staffing), comparing them to the private cloud and the Infrastructure (IaaS), Platform (PaaS) and Software (SaaS) elements of the public cloud, and projecting them all forward over the next ten years, open source IT research organisation Wikibon has forecast that the cloud's share of enterprise computing will grow from around 10% currently to 45% by 2026.6 The chart at Figure 1 is derived from these projections.

    Figure 1: Worldwide Enterprise IT Projection by Segment, 2017-2026 ($bn)

  6. Cybersecurity risks to the enterprise are also rising: the NCSC's 2017-2018 report. Cybersecurity threats that the enterprise faces also continue to grow in range, intensity and scale.7 The NCSC8 in its 2017-2018 report, 'the cyber threat to UK business' states (on page 6):9

    "Cyber attacks have resulted in financial losses to businesses of all sizes. The costs arise from the attack itself, the remediation and repairing reputational damage by regaining public trust. Attacks have also triggered declines in share prices and the sacking of senior and technical staff held to account for massive data breaches. The enforcement of the General Data Protection Regulation (GDPR) in May 2018 could, under certain circumstances, lead to severe fines for organisations which fail to prevent data breaches, which result in a risk to the rights and freedoms of individuals.10

    Between October 2016 and the end of 2017, the NCSC recorded 34 significant cyber attacks (that is, attacks that typically require a cross-government response), with WannaCry the most disruptive of these. 762 less serious incidents (typically confined to single organisations) were also recorded. 2018 will bring more of these attacks. The Internet of Things and its associated threats will continue to grow and the race between hackers' and defenders' capabilities will increase in pace and intensity."

    Cloud security is only a part of these cybersecurity risks and threats, and it is a truism that an organisation's security is only as strong as its weakest link. The NCSC 2017-2018 report noted ransomware, DDoS attacks, massive data breaches and supply chain compromise as among major incident trends, with other significant incidents including CEO/senior executive BEC (business email compromise), major security vulnerabilities (Meltdown and Spectre in January 2018), financial sector compromise (fraud using the SWIFT payment system) and cyber crime 'as a service'. Of cloud security and future threats, the NCSC report said (on page 26):

    "Only 40% of all data stored in the cloud is access secured, although the majority of companies report they are concerned about encryption and security of data in the cloud. As more organisations decide to move data to the cloud (including confidential or sensitive information) it will become a tempting target for a range of cyber criminals. They will take advantage of the fact that many businesses put too much faith in the cloud providers and don't stipulate how and where their data is stored."

    However, the NCSC recognises that from a security perspective, using a public cloud service where the CSP has made the 'right security investments' may offer several advantages, including configuration, the CSP's security bench depth, strength of security patches and focused alerts.11

Footnotes

1 A version of this paper is shortly to be published in The Computer Law and Security Review

2 See 'Data Age 2025', International Data Corporation White Paper, April 2017 - https://www.seagate.com/www-content/our-story/trends/files/Seagate-WP-DataAge2025-March-2017.pdf

3 Data centres are forecast to use between 1,200 TWh/year (terawatt hours per year) (best case) and 3500Twh/year (expected case) of electricity within 10 years, or between 4.5% and 13% of global electricity consumption. See 'Tsunami of data could consume one fifth of global electricity by 2025', The Guardian, 11 December 2017 - https://www.theguardian.com/environment/2017/dec/11/tsunami-of-data-could-consume-fifth-global-electricity-by-2025 - citing 'Total Consumer Power Consumption Forecast', Anders Andrae, 7 October 2017 - https://www.researchgate.net/publication/320225452_Total_Consumer_Power_Consumption_Forecast. For a recent example of innovative data centre technology, see 'the Orkney Islands in Scotland just became one of the most exciting places in tech', Microsoft, 6 June 2018 - https://news.microsoft.com/en-gb/2018/06/06/the-orkney-islands-in-scotland-just-became-one-of-the-most-exciting-places-in-tech/

4 'Cisco Global Cloud Index: Forecast and Methodology, 2016-2021' (updated February 2018) - https://www.cisco.com/c/en/us/solutions/collateral/service-provider/global-cloud-index-gci/white-paper-c11-738085.html. Cisco defines criteria for hyperscale CSPs as annual revenues of (i) >$1bn from IaaS, PaaS or infrastructure hosting, (ii) >$2bn from SaaS, (iii) >$4bn from internet, search or social or (iv) >$8bn from e-commerce or payment. Cisco identifies 24 hyperscale CSPs by these criteria, of which 17 are in the United States: Adobe, ADP, Amazon, Apple, AWS, eBay, Facebook, Google, IBM, Intuit, LinkedIn, Microsoft, Oracle, Rackspace, Salesforce, Twitter and Yahoo; and 7 are elsewhere: Alibaba, Baidu, JD.com and Tencent (China); NTT and Yahoo!Japan (Japan); and SAP (Germany).

5 'Cloud Revenue 2020: Amazon's AWS $44B, Microsoft's Azure $18B, Google Cloud Platform $17B', John Koetsier, Forbes, 30 April 2018 - https://www.forbes.com/sites/johnkoetsier/2018/04/30/cloud-revenue-2020-amazons-aws-44b-microsoft-azures-19b-google-cloud-platform-17b/2/#2d079dd11b43

6 'Cloud "Vendor Revenue" Projections 2015-2016', David Floyer, 28 February 2017, Wikibon - https://wikibon.com/cloud-vendor-revenue-projections-2015-2026/- cited in 'Roundup of Cloud Computing Forecasts, 2017', Louis Columbus, Forbes, April 29, 2017 - https://www.forbes.com/sites/louiscolumbus/2017/04/29/roundup-of-cloud-computing-forecasts-2017/#253cc79331e8

7 Threats include (i) botnets (computer networks remotely and maliciously controlled), (ii) DDoS (distributed denial of service) attacks, (iii) hacking (unauthorised system access), (iv) malware (malicious software), (v) phishing (unauthorised access to a person's identity), (vi) ransomware (disabling malware unlocked on payment), (vii) spam (unsolicited communications), (viii) spyware (surveillance malware), (ix) trojan horses, (x) viruses and (xi) worms (as self-replicating malware enabling unauthorised access).

8 The National Cyber Security Centre, part of GCHQ (the UK Government's Communications Headquarters), 'acts as a bridge between industry and government, providing a unified source of advice, guidance and support on cyber security, including the management of cyber security incidents' (https://www.gov.uk/government/organisations/national-cyber-security-centre).

9 'The cyber threat to UK business 2017-2018 report', 10 April 2018 - https://www.ncsc.gov.uk/cyberthreat

10 GDPR Art 4(12) defines a 'personal data breach' as 'a breach of security leading to the accidental or unlawful destruction, loss, alteration, unauthorised disclosure of, or access to, personal data transmitted, stored or otherwise processed'.

11 outlook for security in the cloud', NCSC, 26 September 2017, https://www.ncsc.gov.uk/blog-post/brightening-outlook-security-cloud

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