Enterprises Underestimate Actual Shadow Cloud Risks

More than 85 percent of cloud applications used in the workplace are unsanctioned, study shows.

The dangers posed by shadow IT, where workgroups and individual workers use applications that are not sanctioned by IT, are well understood. What few may realize is just how extensive the problem has become in an era of cloud computing and personal mobile devices in the workplace.
Security vendor CipherCloud analyzed a year’s worth of cloud usage data from its enterprise customers and discovered that on average, North American companies used about 1,245 cloud applications. Of that number, an astounding 86 percent were unsanctioned applications that IT groups had little idea were being accessed from inside the enterprise network.
The numbers highlight the scope of the shadow cloud problem within enterprises, says Willy Leichter, global director of cloud security at CipherCloud. While enterprises often know they have unsanctioned applications running within the enterprise, few have any idea of just how widespread that use really is, he says.
“Many were staggered by the extent of shadow IT,” within their companies Leichter says. The actual number of unsanctioned applications in some companies was several multiples of what IT managers were expecting he said. As an example, he pointed to one enterprise that expected to find about 10- to 15 unsanctioned cloud applications being used for file-sharing purposes, when in reality workers were using about 70 such applications.
For purposes of the
study
(registration required), CipherCloud defined a cloud application as any cloud-hosted service that requires a user to enter a username and password in order to access the service. Examples of such applications included social media services like LinkedIn and Twitter, filesharing applications like DropBox and Box, email, security, productivity and cloud storage applications.
The CipherCloud study showed that the most commonly accessed applications were publishing applications like WordPress and Adobe Creative Cloud, career services like Indeed and Resumonk, and social media networks like Facebook, Twitter and LinkedIn. Ironically, these three categories also comprised the top three most risky cloud applications, Leichter said.
CipherCloud’s study showed that 52 percent of publishing cloud applications, 42 percent of social media applications and 40 percent of career cloud application presented a high-risk to enterprises. Among the factors that CipherCloud examined when determining risk were whether the cloud application used multifactor authentication, supported data encryption, provided third party access and had earned any compliance certifications.
BYOD policies have played a big part in the growth of unsanctioned application use within enterprises, Leichter says. Workers with personally owned mobile devices often tend to use unsanctioned cloud applications to facilitate their work, he says. For example, someone wanting to work on a document at home or outside the office might simply upload the document to a file sharing application supported by their mobile device simply because it is easier to do so.
Aging enterprise technologies and IT models have also contributed to the shadow cloud problem, according to
PricewaterhouseCoopers
(PwC) from last August. With growing pressure to perform, business groups and individual workers are doing an end run around their IT organizations and adopting cloud services that they think make most sense, the PwC report noted.
While shadow IT has long been an issue for technology organizations, the shadow cloud presents new risks, the report cautioned. “The risks associated with shadow IT were largely confined to individual computers running the solution to support discrete day-to-day activities,” PwC noted. While such use was rampant in some organizations, the impact was largely confined to within the enterprise network.
With shadow cloud services, on the other hand, enterprises have to deal with information traveling outside the enterprise network and traversing the public cloud. “If left ungoverned, such decentralized, unknown, and unmonitored activity presents a significant risk to any enterprise, particularly those companies operating in highly regulated sectors,” PwC said,
John Pescatore, director of emerging security threats at the SANS Institute, says much of the risk can be mitigated if IT is responsive to business needs. Employees and business groups often sign up for cloud services they need on their own because it is faster than waiting for IT to provision it for them, he says.
The way IT works is, ‘we buy some hardware and we depreciate it over three years or we buy some software and we use it for five years’,” Pescatore said. That kind of model simply doesn’t work anymore: If it is a collaboration or synchronization problem, then people will go out and find an application” that resolves the issue for them, Pescatore said.
But if IT were to step in and give users a way to put content in a safe place so it can be accessed from anywhere at any time, there would be less reason to use an unsanctioned application, he said. “If IT doesn’t have a solution, this type of thing happens. You can’t stop it.”

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Enterprises Underestimate Actual Shadow Cloud Risks