Risks Inherent in Utilizing Economies of Scale

The number of people in the United States has been increasing heavily over time and we are currently the third most populace country on the planet. In the last century, the population has more than tripled here, and it is estimated that we will add more than 100,000,000 to the current total by 2050. One of the things that help us cope with such huge numbers is taking advantage of economies of scale.
For example, we build truly giant ships to carry our oil and cargo because the bigger the ship is the more hydrodynamic advantage there is and the less cost there is per ton for transportation. Similarly, we build enormous power plants and network them into grids because it is more efficient and cheaper per kilowatt hour to do so. There are many more examples of this trend all across American commerce. While this practice indeed does work and enables us in many ways, it comes with a variety of costs; one of which is increased risk.
We stand to lose a lot of oil and cause major environmental catastrophes if someone starts sinking major super tankers, for example. And if an enemy starts destroying our large power plants (or critical nodes in the infrastructure connecting them), the impact could be very much worse than that.
I mention all of this, because now we are seeing the trend toward economies of scale coming into the information processing world, mainly in the form of cloud computing. This trend is inevitable because it truly is more efficient, cheaper and improves peoples’ lives in many ways. But it must be realized that this centralization of data processing and storage brings with it the same increase in impact if a major compromise occurs – and the greater the impact, the greater the risk.
What this means in the information security world is that we need to have more security assurance built into these large cloud systems. It should be stated like a natural law: the bigger the system, the more effective the security controls need to be. So before you put all of your valuables into the cloud, keep the risks inherent in economies of scale in mind and vet your cloud provider’s security measures. Make sure that they have all the technical, operational, physical and management controls in place. Ensure that their information security program is transparent and reactive to realistic criticism. And ensure that your own organization realizes the risks inherent in the cloud and plans accordingly as well. Remember, it is your own organization that is ultimately responsible for the security of their data no matter where it is stored or processed.

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