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Cloud Vendor Hypocrites: Contracts May Not Help

Written by Mark Rasch
June 20th, 2012

Attorney Mark D. Rasch is the former head of the U.S. Justice Department’s computer crime unit and today serves as Director of Cybersecurity and Privacy Consulting at CSC in Virginia.

Cloud providers want customers and are willing to promise just about anything to get them, including the type of security envisioned in the guidelines of the Cloud Security Alliance (CSA). But most cloud providers are unwilling to enter into contracts binding them to actually meet the CSA guidelines, even when that cloud provider has issued enthusiastic endorsements of the CSA wording.

One reader who is now working with a major hosting company on a cloud contract specifically had this experience. He asked the vendor to accept contract wording identical to statements that hosting firm had publicly applauded. The vendor refused, saying “the CSA is a marketing and collateral document. It was not created to be a contractually binding document.” True, that was its initial objective. But why couldn’t it be binding? Surely, the firm has no objection to language it enthusiastically endorsed?

Beware the cloud provider that promises one thing but delivers another. We’re going to look into whether such claims can indeed be crafted into a legally binding contract. But first, a bit of essential background.

One of the biggest challenges for all cloud providers is security. The nature of the cloud is such that it can be (but isn’t always) a pooled resource, or what is called “multitenant.” It’s like the difference between owning a single family home and renting an apartment. The concepts of “location,” “ownership” and “responsibility” are different in the different models. It a multitenant environment, each tenant must be protected not only from “outsiders” but from other tenants, as well. The cloud may be located in any geographical location (or multiple locations) at any time, and it may be subject to hostile forces going after either you or any other tenant.

Recognizing the challenges that may uniquely face the cloud, a group of interested parties have formed the Cloud Security Alliance, which is intended to address the privacy, security, technological and legal issues associated with the cloud itself.

For merchants who get a warm and fuzzy feeling knowing that their cloud provider supports the goals of the CSA, they need to translate those goals into both requirements and contractual obligations. I suspect no cloud provider would agree to a contract that said, “we will comply with the requirements of the CSA Common Control Matrix and the CSA GRC Stack.” Frankly, the documents are not ready for primetime. Indeed, if we had the answers to the security problems, we wouldn’t need a CSA. Each company would solve problems on its own and use security as a differentiator in its offerings.

Could the CSA guidelines actually form a contractual obligation?


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One Comment | Read Cloud Vendor Hypocrites: Contracts May Not Help

  1. RLS Says:

    Great piece, but I would disagree in part with one statement made that “If a cloud contract requires the cloud provider to maintain “reasonable” security, then the standard is too loose to be enforceable.” Courts are increasingly scrutinizing what constitutes legally defensible reasonable security in breach and other infosec related lawsuits. IT has also approached the concept, too – http://www.secureconsulting.net/2010/03/legal_defensibility_doctrine.html while more attorneys are tackling the same approach from the legal side – http://www.infolawgroup.com/stats/pepper/orderedlist/downloads/download.php?file=http3A//www.infolawgroup.com/uploads/file/Navetta-The2520Legal2520Defensibility2520Era-ISSA.pdf

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