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Lost in a Cloud?

Supply chain managers may also be asking whether building private clouds creates a single point of vulnerability by aggregating many different types of sensitive data onto a single platform
By Patrick Burnson
January 29, 2013

While the use of highly scaled, shared, and automated IT platforms—known as cloud computing—is growing rapidly, the advance is technology is not without its skeptics.

Indeed, a recent report issued by McKinsey & Company maintains that many shippers are asking whether external providers can protect sensitive data and also ensure compliance with regulations about where certain data can be stored and who can access the data. 

Supply chain managers may also be asking whether building private clouds creates a single point of vulnerability by aggregating many different types of sensitive data onto a single platform, stated the report.

Titled, “With All Its Benefits, Cloud Computing Does Not Come Without Risks,” McKinsey researchers note that blanket refusals to make use of private- or public-cloud capabilities leave too much value on the table from savings and improved flexibility:

Adopters are driven by the prospects of increasing agility and gaining access to more computing resources for less money. Large institutions are building and managing private-cloud environments internally (and, in some cases, procuring access to external public clouds) for basic infrastructure services, development platforms, and whole applications. Smaller businesses are primarily buying public-cloud offerings, as they generally lack the scale to set up their own clouds.

But as attractive as cloud environments can be, they also come with new types of risks.

McKinsey says executives should be asking whether external providers can protect sensitive data and also ensure compliance with regulations about where certain data can be stored and who can access the data.

Supply chain managers seem to agree that large institutions – which have many types of sensitive information to protect and many cloud solutions to choose from – must balance potential benefits against risks of breaches of data confidentiality, identity and access integrity, and system availability.


About the Author

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Patrick Burnson
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at .(JavaScript must be enabled to view this email address).

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