M-F 8:00AM TO 5:30PM CST
Better coverage. Better price.
Don't Risk IT
IBM’s Newest Services Reflect Data Security Fears

IBM’s Newest Services Reflect Data Security Fears

IBM is retooling its cloud services. Here's what this can teach IT contractors about data security and backup liability.

Thursday, April 24, 2014/Categories: cloud-security

A recent TechCrunch article details how IBM is shaking things up in the cloud-security world by offering a way for its clients to be more involved in their security and expanding data backup.

Many clients and IT consultants have reservations about cloud security for the simple reason that they can't see it in action. Once data is off their servers and stored in a cloud data center, IT professionals are nervous about trusting a third party.

According to the article, IBM aims to soothe those fears by allowing clients to oversee some aspects of data security. Here's how IBM is mixing the old school and the new school in its approach to security.

More Security Oversight: IBM’s Bet on Data Management

The new security tools IBM is including in its SoftLayer cloud services will let IT professionals partially manage their security. Just as with a private network, IT professionals will have access to data on incident tracking and threat identification.

One of the attractions of cloud computing is that security is someone else's problem. But that's also its disadvantage. At first it sounds nice to have IBM watching over your data security, but this has also caused many IT professionals to grow anxious.

Because IT consultants can be sued whether it's their own error or a cloud service's mistake that causes a data breach, many want to have as much information as possible about threats (even if their security is managed in the cloud).

In short, this new feature will give IT professionals the hands-on control they're used to having when managing their own networks while also enabling the low-cost security infrastructure only possible with cloud sourcing.

(Read more about threats to cloud security in "Cloud Security 101: Verifying Security in the Cloud.")

What's Better Than Data Backup? More Data Backup!

IBM is also expanding its data backup services – traditionally one of the key advantages to using cloud-based data solutions. IBM will offer more data backup services and consulting and increase the number of data centers dedicated to "data resiliency."

IT consultants can use "continuous backup" and cloud-based data solutions to protect their clients from data loss, while also protecting their businesses from the lawsuits that come with losing a client’s data.

For a more detailed analysis of the benefits and risks of data backup solutions, see "Which Continuous Backup Method Protects You from Lawsuits?"

IBM’s Strategy to Reduce Cyber Liability

IBM's strategy is fairly obvious. Many businesses and IT consultants are wary about transitioning to the cloud. To counter this, they are offering expanded security oversight and better data backup services. They are trying to address the weaknesses of cloud computing, while also building on its data management strengths.

For IT consultants, this is good news. Many of your clients might have legitimate concerns about cloud computing. If a cloud computing solution makes sense for your client, the hands-on features IBM and other businesses offer can help you answer a client's questions about data security and management.

More than that, better backup and security are crucial ways IT consultants can cover their own personal liability.

Say an IT consultant recommends her client uses Company X's cloud service. If a data breach occurs at X or an outage leads to lost data or productivity, the consultant can be sued even if the problems are on the cloud vendor's servers.

This is what is called "third-party liability" and it's a major risk IT professionals need to manage. Data breaches and performance problems with vendors can lead to lawsuits against your business. You are responsible for the performance and security of all the products and services you use. That's a lot of liability to rest on your shoulders.

(For more on managing third party liabilities, see "Help Your Clients Understand the Risks from Third-Party Contractors.")

How to Protect Your IT Business from Cloud-Source and Third-Party Risks

The good news for IT contractors is that Errors and Omissions Insurance covers third-party and cloud-computing risks. If you're sued for a data breach caused by your client's cloud-based data backup, E & O Insurance covers the cost of the lawsuit and damages you owe your client.

In addition, this insurance covers more "traditional" IT lawsuits like software glitches, missed deadlines, compatibility problems, and performance issues. To learn more about E&O Coverage, see these sample E&O Insurance quotes for IT businesses.

The Small Business
Insurance Leader
800.688.1984 | 8 am - 5:30 pm CST | M-F
Customer Rating 4.9 out of 5
Read Customer Reviews


The Small Business Insurance Leader