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Cloud Computing Demystified – Part 3

Arno Therburg

Arno Therburg

Sep 19, 2019

Cloud Computing Demystified – Part 3

Cloud Computing (Part 3) – The Risks & Challenges

In the previous blog, Cloud Computing Demystified – Part 2 – The Benefits, we discussed the benefits of cloud computing, and there are many, but we also need to be aware of the challenges and risks associated with cloud computing.

If you didn’t read the previous blog, check it out at:

Most of these challenges and risks can be addressed and mitigated through proper planning, and due diligence.

Again, just like in the previous two blogs, keep in mind, this is with a focus on the larger cloud providers, such as Amazon Web Services, Microsoft Azure, Google Cloud and so on, with smaller providers you will experience different risks & challenges to some extent.


So, let’s jump in and discuss these risks and challenges…

Risks of cloud computing

Before considering cloud computing technology, it is important to understand the risks involved when moving your business into the cloud. You should carry out a risk assessment before any control is handed over to a service provider.

Below are a few of the major points to be aware of:

Privacy agreement and service level agreement

You need to have suitable agreements in place with your service providers before services commence. This will protect you against certain risks and outline the responsibilities of each party in the form of a service level agreement (SLA). You should read the SLA and ensure that you understand what you are agreeing to before you sign. Make sure that you understand the responsibilities of the service provider, as well as your own obligations.

An SLA serves as both the blueprint and warranty for cloud computing and should act as a guide for handling potential problems, such as lawsuits.

It’s a tool for protecting the stability of the service and protecting the assets of the company and minimizing the expense should drastic actions be required.

Security and data protection

You must consider how your data will be stored and secured when outsourcing to a third party. This should be outlined in the agreement with your service provider and must address mitigations to governance and security risks. It must cover who has access to the data and the security measures in place to protect your data.

Location of data

Cloud computing service providers could be in a different country. Before committing, you should investigate where your data is being stored and which privacy and security laws will apply to the data.

Legislation and regulation

You will need to be aware of legislative and regulatory requirements when storing personal data. If the data is being stored outside of your country (e.g. if your business uses an overseas service provider), you will also need to be aware of the legislation and regulation requirements in that geographic location.

Biggest Challenges of cloud computing

Cloud computing makes accessing data and applications more reliable and efficient, with less administrative effort. It’s used to enable global access to mutual pools of resources such as services, apps, data, servers, and computer networks.

It’s the choice for many businesses and organizations, since it’s very scalable and in a lot of cases makes perfect financial sense for these companies. It also provides less of a need for worrying about business continuity planning, availability, upgrades and so on.

However, the on-demand and scalable nature of cloud computing services sometimes makes it difficult to define and project quantities and costs.

There are challenges involved in cloud computing, but if you’re aware of what they are, and address them, you will be able to reap the benefits.


Cloud computing itself is affordable but tuning the platform according to the company’s needs can be expensive.

Even if you host your data and systems off-site, there are internal labor costs, as you scale up to handle workload, there’s a complexity with managing large numbers of cloud instances, just like managing large number of servers.

Furthermore, the expense of transferring the data to public clouds can prove to be a problem for short-lived and small-scale projects. It can cost tens of thousands of dollars per year to move large volumes of data to public cloud services and to store that data for long periods of time.

Long-term data storage in the cloud can be a significant cost. You pay for it every month, and if you consider data growth over the next few years, the life cycle cost of data can be quite high when stored in the cloud.

Although companies can save some money on system maintenance, management, and acquisitions, they also must invest in additional bandwidth, and the absence of routine control in an infinitely scalable computing platform can increase costs.

Network bandwidth accounts for much of the cost of moving data, cloud providers might charge upload and download fees.

Also, cloud data backup is expensive, could be as much as three to four times what it would cost to keep data internally.

Lack of Cloud Specialists

Organizations are increasingly placing more workloads in the cloud while cloud technologies continue to rapidly advance. Due to these factors organizations are having a hard time keeping up with the tools. Also, the need for expertise continues to grow.

Small and medium-sized enterprises without cloud computing expertise lose more than $258 million annually, according to a Rackspace and London School of Economics and Political Science report. Around 65% of IT pros said the cloud skills gap is hurting innovation and creativity.

Organizations may find adding cloud specialists to their IT teams to be prohibitively costly. Luckily, many common tasks performed by these specialists can be automated.

Governance & Control

IT governance policies are critical to ensure that agreed upon policies and procedures are being followed when implementing new IT assets, to make sure they are properly controlled and maintained, supporting your organizations strategy and business goals.

In cloud-based environments, in some cases, IT departments do not always have full control over the provisioning, de-provisioning and operations of infrastructure.

This results in increased difficulties to provide the governance, compliance and risk management required.

To mitigate the various risks and uncertainties in transitioning to the cloud, IT must adapt its traditional IT governance and control processes to include the cloud.  To this effect the role of central IT teams in the cloud has been evolving over the last few years. Along with business units, central IT is increasingly playing a role in selecting, brokering, and governing cloud services. On top of this, third-party cloud computing/management providers are progressively providing governance support and best practices.

Password Security

Industrious password supervision plays a vital role in cloud security. However, the more people you have accessing your cloud account, the less secure it is. Anybody aware of your passwords will be able to access the information you store there.

Businesses should employ multi-factor authentication and make sure that passwords are protected and altered regularly, particularly when staff members leave. Access rights related to passwords and usernames should only be allocated to those who require them.

Security issues

If a company outsources the processing or storage of data that it is required to protect, then it is relying on a cloud service provider to maintain their compliance.

When you’re auditing a cloud service provider’s security and privacy laws, make sure to also confirm the third biggest issue is taken care of: compliance.

Your organization needs to be able to comply with regulations and standards, no matter where your data is stored.


Conclusion (Cloud Computing Part 1 -3)

In my humble opinion – Cloud computing is here to stay, the benefits are so many, and if you only do your due diligence, the benefits greatly exceed the concerns, with its flexibility, scalability, and ease of adoption.

There’s no longer a need for businesses to buy their own hardware, build and maintain their own data centers, having to deal with costly server maintenance, or worrying about business continuity planning and disaster recovery, all this while having the opportunity of the flexibility to scale up or down overnight.

For startups and small to medium sized businesses (SMEs), having the ability to quickly adopt to new circumstances such as growing business opportunities, or during slower business periods is especially beneficial.