By David Canellos
PerspecSys President and CEO

The UK Information Commissioner's Office (ICO) recently published a useful and informative report on cloud computing that provides key guidance for companies using or considering cloud services in the UK. The guidelines intend to help organizations comply with the 1998 Data Protection Act (DPA), and they offer welcome assistance for private and public enterprises struggling to avoid stiff non-compliance penalties from the watchdog agency.

The ICO emphasizes that cloud customers are responsible for ensuring data protection, whether they know it or not. Many businesses simply don't realize that data protection is their responsibility when processing is outsourced to a third party (i.e., a cloud provider).

The ICO makes several recommendations about how to assure cloud provider security measures and mitigate data access risks, including physical inspections of cloud provider facilities, third-party audits of security systems, and ongoing procedural reviews and updates. And what really makes sense is for the data controller to have a written contract with the data processor that places the same legal obligations on the processor as on the data controller itself. This becomes critical when you get down to the details of the DPA, which restrict data transfer outside of the EU without adequate protection for the rights and freedoms of data subjects. But by its very nature, cloud computing makes this difficult as data can be stored or processed on servers located anywhere in the world. In some cases, cloud providers can't even pinpoint where data is being stored at a given time, much less cloud customers. Reasons such as this make cloud service providers reluctant to agree the sorts of contractual requirements the ICO suggests.

Realizing that there is no such thing as an iron-clad SLA, the ICO encourages businesses to look for way to maintain control of their sensitive information. As a critical part of the guidance, it underlines encryption as a means to protect personal data in transit or at rest. With encryption, data controllers can maintain and enforce their own security measures at all times. The PerspecSys cloud data protection solution helps data controllers comply with UK laws because any information that is stored or processed in the cloud can be encrypted or tokenized, rendering it undecipherable. This gives organizations a practical, technically feasible way to overcome data privacy restrictions, take advantage of the cloud's numerous benefits, and maintain legal compliance.

The ICO also mentions another potential encryption benefit that pertains to international law enforcement. Foreign law enforcement agencies may have the power to demand access to personal data stored in foreign data centers. By storing encrypted rather than clear text information in the cloud, companies are further able to protect data subjects' privacy rights.

For more insight into these issues, check out PerspecSys' new whitepaper, Data Privacy & Compliance in the Cloud. Available for download from our website, the paper discusses how encryption and tokenization (which can be extremely valuable for organizations with data residency requirements) satisfy legal requirements and industry mandates associated with protecting sensitive data in cloud applications.

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PerspecSys Inc. is a leading provider of cloud data security and SaaS security solutions that remove the technical, legal and financial risks of placing sensitive company data in the cloud. PerspecSys accomplishes this for many large, heavily regulated companies by never allowing sensitive data to leave a customer's network, while maintaining the functionality of cloud applications. Based in Toronto, PerspecSys Inc. is a privately held company backed by investors that include Intel Capital and GrowthWorks.