When you hear the technology term “the cloud,” it often evokes something as nebulous and hazy as, well, clouds themselves. As the industry cloud platform for investment management software, Ridgeline knows a lot about cloud – and the questions you might have about whether it’s the right move for your business. We also understand that transitioning from an on-premise infrastructure to a Cloud Service Provider might have you wondering about security implications. We’re here to explain some key ways your firms’ security protocols are impacted by transitioning your business to the Cloud.
First, we thought it best to define a few terms to avoid confusion throughout this post:
- Cloud - Servers, databases, and other infrastructure that are accessed over the internet
- On-premise or “on prem” - IT infrastructure that is hosted on site
- Cloud Service Providers - Third-party companies that offer cloud-based infrastructure services
What are the major differences between on-prem and cloud infrastructure?
On-prem and cloud infrastructure models are different. The main differences can generally be explained by three things: location, ownership, and security responsibilities. The extent of their difference, however, depends largely on the degree of leverage you have in your Cloud Service Providers’ tools.
Additionally, it’s important to acknowledge that all cloud services are not created equally. Certain solutions claiming to have “moved to the cloud” are really just hosting their services there; they’re not built natively on the cloud and therefore can’t take advantage of all it has to offer. Simply migrating the same old infrastructure from an on-premise environment to be cloud-hosted often results in significant technology debt (AKA, the complexity cost of layering a quick fix on top of old tech) because services weren’t optimized for cloud infrastructure. Cloud services built natively on modern cloud architecture, however, often operate more reliably and effectively because they were designed with cloud in mind from day one.
Let’s look at the distinction between on-prem and cloud across the three main categories:
Location: On-premise solutions, as their name suggests, are hosted at the location of the company that is using the solution. Cloud infrastructure, on the other hand, means that servers are hosted at a Cloud Service Provider, often hundreds or thousands of miles away from the company leveraging its services. For some, there’s a sense of security by being able to see and touch tangible technology infrastructure. However, cloud-based infrastructure offers advanced security controls and effortless scalability over on-premise infrastructure – a key advantage in today’s environment.
Infrastructure Ownership: On-premise solutions require companies to procure, administer, and manage physical infrastructure to run their business. While this gives companies full control over these components, it also means they hold the burden of patching, monitoring, scaling, and securing these systems. This can be costly and require significant technical expertise. Alternatively, Cloud Service Providers handle the procurement, maintenance, scaling, and availability of the infrastructure on your behalf. This change in ownership allows firms to shift their operational costs to a consumption-based model, as opposed to incurring the full fixed cost of infrastructure regardless of how much you’re actually using it.
Security Responsibilities: On-premise solutions typically require companies to manage all aspects of securing their systems and data. Cloud infrastructure employs shared responsibility models, meaning you share certain responsibilities when it comes to security and compliance of the infrastructure. While Cloud Service Providers manage the operational aspects of the infrastructure, you are responsible for elements like data segregation policies, security configurations, and monitoring and alerting tools made available by the Cloud Service Provider. The reality of “shared responsibility” usually resembles a splitting of responsibilities, where security and operational duties are split between the User and the Cloud Service Provider.
Is cloud secure enough for a highly-regulated, data-intensive industry like investment management?
Firms may wonder if moving data from an on-premise data center to the cloud is less secure. Fair question. The truth is, reputable Cloud Service Providers are in the business of protecting and scaling their infrastructure services, and they know your security is a huge part of that. They typically have entire teams of specialized security professionals dedicated to developing secure services and monitoring for potentially adverse events. For example, Cloud Service Providers offer alerting and detection capabilities to help identify anomalous activities that may be indicative of a threat. These tools would take individual firms significant time and expertise to build, while drawing resources away from your core business. Leveraging these services from a provider lets firms shift their focus away from managing infrastructure and back to more strategic initiatives and value-added work.
In the data-intensive investment management industry that Ridgeline serves, leveraging Cloud Service Providers’ inherent scalability allows companies to grow elastically as their data needs increase. For example, if your firm expanded into new investment markets resulting in increased data usage, you would not have to obtain additional data storage because the Cloud Service Provider automatically scales their storage services to your needs.
In addition, Cloud Service Providers offer configurations like encryption and data retention policies, which can add a layer of protection and control. For example, you can set policies to restrict the ability for data to be accessible publicly or to automatically enforce encryption as you consume data storage resources. A reputable provider will provide resources to guide you through configuration settings and be a partner to your security needs.
With proper attention to cloud security configurations, companies should see an increase in the overall security of their environment and data when partnering with Cloud Service Providers.
Have more questions about what a move to the cloud would look like for your business? We’re experts in helping investment management firms understand and experience the benefits of cloud. Feel free to drop us a line at firstname.lastname@example.org to get in touch with our team.