CIOReview
| | August 20218CIOReviewIN MY OPINIONTHE CLOUD: UNDERSTANDING THE RISKS, NOT JUST THE BENEFITSBy Jacob Ingerslev, Head of Global Cyber Risk, The Hartford Andrew Zarkowsky, Head of Global Technology, The HartfordThis article provides general information, and should not be construed as specific legal, risk, HR, financial, insurance, IT, tax, accounting or other advice. As with all matters of a legal or professional nature, you should consult with your own legal counsel and relevant professionals. The Hartford shall not be liable for any damages in connection with the use by anyone of the information provided hereinIt's almost unimaginable to think about technology delivery before the era of cloud computing. Yet, it was only just over two decades ago that a typical organization's technology infrastructure consisted of an in-house datacenter with servers storing all its data and software. Fast forward to 2021 and over 90% of organizations have adopted some level of cloud-based software or service as part of their IT infrastructure, according to a recent story in G2, the world's largest tech marketplace. Cloud computing has brought many benefits to organizations and technology more broadly including processing power, flexibility, lower costs and ease of software implementation and updates. However, with the widespread integration of cloud services and the relative concentration of market share among cloud service providers come significant supply chain risks and the potential for disaster. The largest cloud service providers now constitute critical infrastructure alongside communication, internet and energy supply. And the risk of outages can take many forms including cyberattacks, system failure, human error, natural hazards, and other critical infrastructure interruption. Virtual Supply Chain DependencyCloud migration creates significant network and data supply chain dependencies for organizations and it's important to consider the risks associated with cloud usage to determine the extent to which they can be managed. Most interruptions are short-lived and cause limited impact to users, however each year sees a fair number of serious outages from a variety of root causes. For example, in 2020 Microsoft Azure experienced a six-hour outage in its East US region data center, IBM Cloud experienced a four-hour multi-zone outage affecting customers in several countries and Amazon AWS suffered a five-hour outage in its US East-1 region, as reported by Toolbox.com in December 2020. Cloud outages can also result in significant revenue loss, recovery costs and legal action against both the service provider and its customers if the interruption is prolonged and causes ripple effects. Single Points of FailureDue to the nature of their business model, cloud service providers are considered single points of failure (SPOF), meaning the failure Jacob Ingerslev
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