Eighty-two percent of organizations already transfer, or plan to transfer, sensitive or confidential data into the cloud environment according to a global study of 4,000 business and IT managers conducted by the Ponemon Institute.

The study examines perceptions and current practices surrounding the threats and protection issues relating to sensitive or confidential data in the cloud. It reveals startling attitudes about who is considered responsible for protecting this valuable and often regulated class of data – the cloud service provider or cloud service consumer.

The findings are also significant in explaining where data encryption is applied inside and outside the cloud and, most importantly who manages the associated encryption keys.

The study goes on to examine some of the more practical aspects of encryption deployment in particular, and specifically addresses questions about whether organizations apply encryption themselves before data leaves the organization’s environment or whether encryption is expected to be a component of the cloud services they use.

In the case of cloud-based encryption, the report considers the role of encryption for protecting stored data as well as application-based encryption, which typically applies protection more selectively, potentially protecting individual data items.

Larry Ponemon, chairman and founder, Ponemon Institute, says: “It’s a rather sobering thought that nearly half of respondents say that their organization already transfers sensitive or confidential data to the cloud even though thirty-nine percent admit that their security posture has been reduced as a result. This clearly demonstrates that for many organizations the economic benefits of using the cloud outweigh the security concerns."

"However, it is particularly interesting to note that it is those organizations that have a strong overall security posture that appear to be more likely to transfer this class of information to the cloud environment – possibly because they most understand how and where to use tools such as encryption to protect their data and retain control . What is perhaps most surprising is that nearly two thirds of those that move sensitive data to the cloud regard their service providers as being primarily responsible for protecting that data, even though a similar number have little or no knowledge about what measures their providers have put in place to protect data. This represents an enormous opportunity for cloud providers to articulate what they are doing to secure data in the cloud and differentiate themselves from the competition,” he added.

Key findings:

• What proportion of organizations are already transferring sensitive data to the cloud? About half of all respondents say their organizations currently transfer sensitive or confidential data to the cloud environment. Another one-third of respondents say their organizations are very likely to transfer sensitive or confidential data to the cloud within the next two years.
• Has the use of cloud computing for sensitive data increased or decreased overall security? The survey found that thirty-nine percent of respondents believe cloud adoption has decreased their companies’ security posture.
• Who is responsible for data security in the cloud? Sixty-four percent of organizations that currently transfer sensitive or confidential data to the cloud believe the cloud provider has primary responsibility for protecting that data.
• How much visibility do decision makers have regarding cloud security? Nearly two thirds of respondents say they do not know what cloud providers are actually doing in order to protect the sensitive or confidential data entrusted to them.
• Where is data encryption applied? There is almost an even split between respondents who say their organization applies persistent encryption to data before it is transferred to the cloud provider and those that say they rely on encryption that is applied within the cloud environment.
• Who manages the encryption keys when data is transferred to the cloud? Thirty-six percent of respondents say their organization has primary responsibility for managing the keys. Twenty-two percent say the cloud provider has primary responsibility for encryption key management. Even in cases where encryption is performed inside the enterprise, more than half of respondents hand over control of the keys to the cloud provider.

The complete report is available here (registration required).