Cloud Computing Carries Risks, Lloyds of London and AIR Say

You can outsource your IT security issues by making use of the “cloud”
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LONDON �Cloud computing has become part of our nomenclature and of course �virtualization� has as well. I mean after all, if you can have all your processing power in a �cloud� and save on hardware costs, space, and of course, electricity, why wouldn�t you go that way?

Consider this: �A cyber security incident that takes a top-three cloud provider offline for three to six days could cause anywhere between $6.9 to $14.7 billion in economic losses and between $1.5 and $2.8 billion in industry insured losses,� according to a report in rcrwireless.com. That is one among many findings in a recent report published by Lloyd�s of London in partnership with the American Institutes for Research. The results of the report were based on the top 15 unnamed cloud providers in the US, which together constitute a 70% market share.

In the event of three to six days of cloud downtime, the report referred to in the same article found that �Fortune 1000 companies will carry 37% of the ground-up losses and 43% of the insured losses. A cyber incident that takes down a top three cloud service provider for the same allotted time would trigger $4.2 to $8.6 billion of ground up losses for the manufacturing industry, and $1.4 to $3.6 billion for the wholesale and retail trade industry.�

So it appears that you can outsource your IT security issues by making use of the �cloud.� I liken this situation to flying on an airplane: I would prefer the pilots be onboard, and not �virtualized� in the cloud, as if the plane were a drone. Call me old-fashioned, but if I have to suffer the consequences, I want to retain as much local control as possible.

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