Ah, weather is nice and warm, fresh wind is cooling the face, security is in the clouds. Security in the cloud? Yup. Or, if you take Mike Rothman here at face value, "lack thereof." Now, we are not talking about "cloud-based security services" here, but about "security of cloud-based services" - big difference!
If somebody asks you "Can you have a secure cloud-based service?" - you need to ask back "What do you mean by "you"?" Seriously! Let's go back to the old joke that "the only computer that is 'secure' is the one that is turned off, cemented into a big concrete cube and stored in a locked room." But whose room? Do you own the room where the aforementioned concrete cube is stashed? No? Then maybe it is no longer 'secure' ... Think "concrete cube in the clouds - then BAM!" :-)
Joking aside, if you think that a system that is located somewhere remotely (you don't control physical security) + Internet accessible (you don't control network security) + neither written nor audited by you (you don't control application security) can be secure, than yes, most certainly you can have a secure cloud-based service. This also reminded me about this post by Richard where he classifies people into "two camps: those who trust their products to operate as expected and those who do not."
Now, let's review some of the issues with security of cloud based services.
First, is there public vulnerability research that made MS IIS and OpenSSH (and OpenBSD) the paragons of software security? No, this part is completely screwed up today as only criminals are "allowed" to do vulnerability research of cloud based-services (and web applications). Comparison here is not in favor of "the clouds," and "legacy" software approach wins hands down (want trusted apps? go audit them!). To remind yourself what the world looked like without public vulnerability research, think back to early 90s: "hot new exploit - telnet as 'root' without any password" (this is where web security stands today, pretty much).
Second, can you make sure that only you will see the sensitive data (or even regulated data: PHI, credit cards, passwords, financials, etc)? Maybe, if you take care of it. As Mike R puts it : "Basically, you can't be sure anything is secure in the cloud, so that means you have to secure it yourself. That means building your applications with some semblance of data protection [...] But ultimately if you can't prove your data hasn't been tampered with and that it's open for anyone to steal, then I suspect your auditor may have a bit of an issue with that."
Third, can you log and audit access to your information, stored and processed somewhere in the cloud? Maybe, if you chose the provider that allows you to do it. For example, I hear that Salesforce.com access logs are good enough to enable most things you can do with OS logs. Otherwise, well, keep begging them to build it; there is no appliance you can buy to plug this hole.
Finally, if we are insane because we use software, what about cloud services? Sorry, multiply that insanity by 10x. Replace today's mantra "I trust my software vendor" with "I trust my cloud provider, their software developers, their outsourcers (if any), the other vendor they mashup with, my ISP (and its ISP, and its ISP, and its ISP, etc, etc), my cloud provider's ISP (and its ISP, and its ISP, etc, etc, etc) and ... oh, wait ... and your software developers who wrote the code that connects to the above in-the-cloud service." Cool, isn't it? :-)
This paper also reminds us about the business angle: "Remember that the storage provider has less to lose than the customer" [that is you, BTW]. At this point somebody has got to ask "is that dirty C-word hiding somewhere here? Is there a compliance angle?" You bet. And it is "simple", really: just compare a) and b) here:
a) you manage a system that contains financial records (SOX anybody?), you screw up and they are lost OR you don't screw up and they are OK (not lost)
b) you DON'T manage a system that contains financial records (SOX still?) - it is in the cloud, you DON'T screw up and they are still lost since your cloud provider screws up.
Who do you think will go to jail? And don't even get me started on the breach disclosure law angle here (if they lose your data, than you are in violation of SB1386 - that is at least my guess ...)
By now, it should be painfully obvious to any and all of my readers that "in the cloud services" are indeed the future of IT! :-) Yes, and security is a great career - with no shortage of challenges to overcome or tall peaks to climb ... now and ever. That is why I love it.