Cloud Vendor Hypocrites: Contracts May Not Help

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?Could the CSA guidelines actually form a contractual obligation? It depends on the specific guidelines, but sure. For example, the Common Controls Matrix (CCM) looks an awful lot like the ISO standards and, in turn, like a bunch of other guidelines (can you spell PCI-DSS?). But would any cloud provider commit to something like, "Ensure that all antivirus programs are capable of detecting, removing and protecting against all known types of malicious or unauthorized software with antivirus signature updates at least every 12 hours."

Lawyers are used to a degree of both specificity and ambiguity in contracts. So, if I have a program that is "capable" of detecting against malware but is not installed, am I compliant? By "known" malware, does this mean known to the software program, known to antiviral vendor, known to the public or known to the malware creator (in other words, unknown)? This is why lawyers aren't invited often to cocktail parties.

Multiply this definitional problem by a few hundred for each "standard," and you see why there is a problem. If a cloud contract requires the cloud provider to maintain "reasonable" security, then the standard is too loose to be enforceable. Make the standard too rigid, and you have instant breach. Force compliance with a standard that is aspirational or changing and, again, either the provider is not compliant or the price of cloud services quintuples. If you are lucky.

So what should a cloud customer do? First and foremost, make security part of your discussions with your cloud provider. And that means having discussions with your cloud provider. Don't just click on a link, e-sign a contract and, boom, you have cloud. You want to know what the provider is doing for security and how. Use the CSA matrix as a framework.

Ask probing questions and get answers. Use those answers to craft your contract. Many cloud providers simply offer up a sample contract on a take-it or leave-it basis. You can bet those terms are not going to be written in your favor. If security is important to you (and it should be), make sure your cloud provider knows it.

Merchants are familiar with the distinction between marketing and puffery and lies and deceit. If you say customers love your store, that's puffery. If you say 42 percent of customers prefer our store to the competitor, you'd better have some research to back up that statement or the FTC will be after you.

Just because a cloud provider supports the standards of the CSA doesn't mean it will live up to them. Ask hard questions, get answers and get everything in writing. And remember, you can never think of every question to ask in advance. That goes for any long-term relationship you may enter into.

If you disagree with me, I'll see you in court, buddy. If you agree with me, however, I would love to hear from you.