The Major Security Risks in Cloud Computing

That's why many companies rely on hybrid architectures and on-premise solutions

The global advancements in cloud computing are significant, and no successful company can afford to ignore the latest trends in the long run. Particularly AI-driven software solutions, with their seemingly endless applications, are adding complexity to the management of cloud providers and services.

One consequence is that even IT managers or software asset managers at small to medium-sized businesses with more than 100 employees typically have to handle multiple providers with various SaaS products. In larger enterprises or corporations, the numbers and challenges multiply. Besides tracking dynamic license costs, they must closely monitor security risks associated with complex cloud environments. The more software applications within an organisation, such as source codes, sensitive company data, production and ordering processes, chats, and meetings that reside in the cloud, the greater the risks involved. Additionally, differing security standards across various SaaS providers for individual applications—like permission models, event log formats, and local user repositories—pose further challenges for risk management.

As security risks shift as rapidly as corporate cloud environments, this blog post highlights the key risks and, through a practical example, demonstrates why many companies still hesitate to move entirely to the cloud. Instead, for both security and cost reasons, they often opt for hybrid architectures or even fully on-premise solutions.

The Major Security Risks at a Glance

Security Risk 1: Identities

Humans have a physical identity and an infinite number of digital ones. This is especially evident in complex cloud environments, where every new application creates new user identities. Driven by major cloud providers like Amazon, Microsoft, or Google, private and business identities are increasingly blending together. For instance, many employees use Microsoft 365 both privately and professionally, with different identities, rights, and security levels. Adding to this is the issue of unknown identities due to the shadow cloud phenomenon, where software solutions are available to almost anyone, anytime, without internal IT oversight, making them easy to overlook. As a result, security officers are finding it increasingly difficult to maintain an overview and effectively protect access to company data.

Key measures to minimize this risk include implementing security-focused software asset management, introducing multi-factor authentication (MFA), enforcing strict password policies as part of compliance guidelines, using systems to document login attempts and access, and establishing an identity-based on- and off-boarding process, especially in teams that work with external support or remote work setups.

Security Risk 2: Systemic Vulnerabilities and Configuration Errors

Systemic vulnerabilities on the provider side, such as bugs, zero-day exploits, or code flaws, are of course difficult to control. The general approach is to ensure that errors are promptly addressed and patches are provided. Regular audits can also help identify unusual user behaviour, enabling earlier detection of potential issues.

However, the risk of incorrect configurations of cloud services or cloud infrastructures, which can unintentionally create security gaps, can be minimised far more effectively. These include, for example, unsecured databases, publicly accessible storage containers, or misconfigured network security groups.

For effective risk mitigation, it is crucial to always have an up-to-date overview of who can access a cloud application, through which channels, and to what extent. Regular security audits should be conducted, and responsible staff should be trained on the latest security standards.

A significant lever for preventing errors is the establishment of defined configuration standards based on known security risks and existing best practices. On this basis, even complex multi-cloud environments can be monitored with the help of Cloud Security Posture Management (CSPM) tools, which can automatically detect and even fix misconfigurations, application vulnerabilities, or compliance violations. According to IT research firm Gartner, a well-tailored CSPM can reduce security incidents caused by misconfigurations in the cloud by up to 80%.

Security Risk 3: Cloud Applications

Third-party cloud applications can quickly become attack vectors if they are not sufficiently security-checked. These applications usually interact with one another to simplify existing workflows. Since the security risks associated with third-party apps are often underestimated, users frequently grant them excessive permissions without the IT department being aware. This creates effective entry points for cybercriminals who can not only compromise the entire cloud environment but also completely shut it down due to existing security vulnerabilities.

Regular security checks and updates for existing and known applications are as crucial for risk minimisation as selecting apps based on predefined security and certification standards, such as DIN ISO 27001. Ultimately, it is recommended to handle the selection and access permissions in the same way as for individual devices or user accounts.

Security Risk 4: Availability

An existential risk factor is the availability of cloud services, especially when essential applications, workflows, or production processes are run on them for daily business operations. The threat scenarios, however, are highly varied, ranging from the technical provision of hardware and software resources on the provider's side, hardware connections such as fibre optic cables, DDoS attacks from cybercriminals, to human error.

Key risk mitigation measures include, among others, the development of disaster recovery and emergency plans, the use of redundant systems, the distribution of cloud services across multiple geographically distributed data centres, daily backup cycles, and suitable DDoS protection measures that can detect attacks early and prevent disruption to system availability.

Other potential vulnerabilities that are often overlooked

In addition to the major risks in cloud computing, companies should ensure that, as part of a holistic security strategy, seemingly less significant risk factors do not become entry points for cybercriminals. These include, among other things, digital devices, multi-cloud and shadow cloud environments, as well as the human element, with its often careless behaviour in the digital workplace, as this blog post highlights.

Security risks in cloud computing promote hybrid architectures and on-premise solutions.

Many IT managers, particularly in industries with high compliance and data protection standards, such as energy, healthcare, transportation and logistics, or waste management, as well as in public administration, still consider the risks of total cloud solutions too high. As a result, hybrid cloud architectures or even complete on-premise solutions continue to be very popular. These approaches allow security risks in cloud computing to be reduced for at least some areas. Furthermore, these scenarios provide an opportunity to sustainably lower ongoing licensing costs by integrating used software as needed, as the following example from the LMT Group shows:

The company, which specializes in machinery manufacturing and employs 2,200 seats, wanted to procure the necessary licenses based on demand. This involved 10 IT locations worldwide. The solution combined, among other things, an Office 365 E1 plan with used PREO licenses for Office 2016 and Windows 2016 Server CALs. The result was the functionality of an E3 plan, but without Office ProPlus.

Result: Without any loss in productivity, the company achieved savings in the high six-figure range. The entire investment paid for itself within just the second year. Sounds interesting? You can find the full customer case here.

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Compelling advantages – Used software from PREO for on-premises operations

We are one of the pioneers in the European market for used software licenses, offering businesses, organisations, and public administrations a wide range of used volume licenses for servers, operating systems, or application software, primarily from Microsoft or Adobe. With these, they can sustainably optimise their licensing costs and benefit in multiple ways:

• Significant savings of up to 70% on ongoing licensing costs compared to the respective new version.
     
  
• 100% legally and audit-secure license acquisition with full transparency in all processes, including complete documentation in the PREO License Portal "Easy Compliance".
  
  
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• Detailed market knowledge and extensive experience through the audit-secure transfer of over 3.5 million used software licenses.
  
  
• Existing capacities for software license management in large IT infrastructure projects with thousands of workstations and cross-border locations.
  
  
• Convincing reference projects for numerous mid-sized and large companies across various industries.

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