IT Security Compliance for Cloud Service Providers

• By Gábor Marosvári
• Aug 01, 2014

Compliance with increasingly stringent regulations for organizations providing outsourced IT services, particularly in regards to data protection, is becoming more difficult. Reputation and client trust are fragile assets, and compliance with industry standards and legal regulations is essential to earn and maintain them. Cloud service providers (CSP) consider compliance a magical term: on one hand it’s critical to their success; on the other hand it’s imposing time-consuming burdens on the business.

A special area of compliance is IT security compliance, which is based on legal provisions and international standards. Geographic borders become blurred, however, in the provision of cloud services, making it impossible to regulate the sector solely based on local regulations. This calls for international IT security standards, such as PCI-DSS, ISO:27001, or SSAE 16/ISAE 3402 (formerly SAS 70). The largest CSPs such as Amazon Web Services and Microsoft Azure strengthen their customers’ trust by meeting these standards.

The standards include a broad range of requirements that require a comprehensive approach to compliance. In each instance, CSPs need to understand and interpret the requirements from their own perspective, then enact a thorough implementation program. This includes meeting certain requirements with specialized software. Privileged access management and centralized log management are areas in which software is typically used to meet compliance requirements, and can lead to significant cost reductions, as well as an increased level of security.

The Current Market Landscape Among Cloud Providers

Which percent of their yearly IT budget is spent on compliance investments? What is their primary motivation to meet regulations? Which are the most important industry regulations they need to meet? Which are the most important control areas when talking about compliance strategy? What type of users’s activities should be primarily monitored in cloud environments? How matured are the Privileged User’s Management strategies at cloud providers?

BalaBit IT Security and KPMG in Hungary jointly conducted an international market survey1 titled “Compliance in the IT Service Provider Sector”. The research involved 120 IT directors of IT and cloud service providers, and was conducted in February.

Figure 1 shows that approximately 60 percent of service providers spend more than 10 percent of their annual IT budget on investments related to IT security compliance. Moreover, almost one out of five spends more than 20 percent of their annual budget on compliance related items, which is well above the industry average.

More than two-thirds of those surveyed use compliance with standards primarily to ensure secure operations. This result is a positive development, as it indicates that most IT cloud service providers regard industry regulations as a framework for developing their companies’ risk management practices.

The vast majority of respondents use compliance for maintaining their reputation and acquiring more customers, which clearly shows that service providers see compliance as crucial to building trust.

Results of the survey also showed that most IT service providers consider compliance with the international standards (for example, ISO 27001 and PCI DSS) important. Naturally, the data protection regulations of the countries where a given service providers’ data centers reside are important. It is, however, essential to note that legal regulations usually build upon the principles of some international standard.

It turns out that (privileged) user access control and log management are critical elements of service providers’ compliance strategies, whereas basic technologies such as antivirus and firewall systems are much less important.

For the majority of respondents (57 percent), monitoring internal and external access to cloud infrastructure is equally important. This can be explained by the fact that access monitoring systems provide strong evidence for service providers in disputes with their customers and can settle differences of opinion quickly and cost-effectively.

It is clear from our research that most service providers employ generic user management and various levels of authorization and authentication systems. However, only 42 percent of respondents monitor and audit privileged users’ activity. Without the right auditing tool, it is impossible to definitively determine “who did what” in a given network, which can lead to disputes over responsibility and costly investigations.

This article originally appeared in the August 2014 issue of Security Today.