Cloud/SaaS will do for websites what PCI-DSS has not

Friday, October 02, 2009
Make them measurably more secure. If a would-be Cloud/Software-as-a-Service (SaaS) customer is concerned about security, and they should be since their business is on the line, then security should be the vendors concern as well. Unless the Cloud/SaaS vendor is able to meet a customer’s minimum requirements, they risk losing the business to a competitor who can.

This market dynamic encourages the proper alignment of business interests and establishes a truly reasonable minimum security bar. The other significant benefit of Cloud/SaaS business model is that multi-tenant systems are at least as secure as the most demanding customer. Security investments meant to satisfy one customer directly benefits the rest.

Compliance on the other hand is designed to compensate for times when normal market forces fail to provide an adequate alignment of interests. For example, organizations that are in a position to protect data are not responsible for the losses. The payment card industry found itself in one of those situations when it came to cardholder information.

Unfortunately compliance, specifically PCI-DSS, in practice is implemented in a much different way than the aforementioned market forces. Apparently a checklist approach is most common where strategic planning is generally not an incentive. The result of which is performing a bunch of “best-practices” that may or may not affect a better outcome because “security” is not the primary goal. Satisfying audit requirements is.

The interesting thing about SaaS is the last word, “service.” Customers are buying a service and not a product with a lopsided, zero liability end-user licensing agreement (EULA). Customers may demand vendors provide assurances by passing third-party vulnerability assessments, encrypting their data, onsite visits, or taking on contractual liability in the event of a breach or service degradation, etc. This all before signing on the dotted line. This requires vendors implement safeguards customers may not be able to do for themselves without incurring significant expense. These are serious considerations to be made before outsourcing sales force automation, enterprise resource planning, email hosting, and so on.

Sure there are Cloud/SaaS vendors with equally customer-unfriendly EULA and no SLAs or security guarantees to speak of, but I am confident this only opens the door for healthy competition. Customers WANT security, the question is are they willing to pay a premium for it. If so, Cloud/SaaS vendors who view security as a strategic way to differentiate could find themselves as the new market leaders. I believe this form of competition is doing a lot more to improve website security than how PCI is typically applied. At least, so far this has been my experience.

Originally Posted by Jeremiah Grossman here:
http://jeremiahgrossman.blogspot.com/2009/10/cloudsaas-will-do-for-websites-what-pci.html
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Fred Williams Customers could demand it but what if all the public cloud providers offer the same zero-liability contract? In the end, the customer is left holding the bag.
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