ok fine I have seen these type of examples but where is the weakest link - e.g. does this super secret segregated network backup to unencrypted tape which is then lost or stolen (http://bit.ly/cQZiRd) a hard drive stolen (http://bit.ly/aLH2xI), a legitimate user walks out with info (http://bit.ly/b8Iecp), a laptop stolen (http://bit.ly/cp0h5Q)
The point I'm trying to make is you have to look at security holisticly. Having a super strong segregated network has no point if you are not going to have a similar level of control everywhere else which I can guarantee you the Federal government especially in the US does not have.
So why not take advantage of the cloud, enjoy the cost decrease, increase in resilience and scalability and still have an acceptable level of risk with application of reasonable logical controls?
I think we're deviating away from the real topic at hand, but regardless, I couldn't say specifically what the weakest link is... while I know that the tapes themselves have their own procedures, I don't know what they are.
The 'legitimate users' issue is largely mitigated from malice by severely limiting who those users are with background checks, security clearances, layered access levels, and a culture in which everybody reinforces the security procedures and watches for others who might be violating them, intentionally or unintentionally. This isn't 100% of course, nothing is, but it's largely effective I would guess.
Stolen laptops of course happen on occasion, but it's a dramatically different problem than unintentional access to a data center, or all the data therein. Further, most of the laptops I've seen have data-at-rest encryption, remote locating devices (GPS) and fairly stringent security protections on the device. In order to connect to any sensitive networks, they'd also have to use VPN and 2 factor encryption.
Largely, these things have already been thought of... but more importantly, if you're statement holds weight, and they should have stringent controls everywhere to be effective, then why would they arbitrarily allow their data to be potentially compromised in the event that Amazon has less stringent requirements -- and guess what, they do.
You've done a good job answering the question asked of me -- thank you.
To add a little more, in places where security really matters, like DoD manufacturing areas, there is literally physical security segregating everything from the people to the network to the hardware to the data from the unclassified parts. Knowing you could go to jail for a very long time if you do something stupid or illegal is a strong motivator. For those not so motivated, most places not only segregate the network but also the data: tapes or backup data are kept onsite in a secure area, computers used for interacting with the data never leave the secure area and have been modified not to have USB headers or removable hard drives, cables and gear are physically protected from tampering, etc.
None of this is to say that all risk is eliminated, but since most systems are compromised by casual hackers using simple tools, adding the security you can is usually a sensible thing to do.
Look two good replies and I think we are all in agreement that the military will probably not be using public cloud services any-time soon (at least not until budget cuts > security concerns) and if the OP is targeting purely that of market with that risk appetite then good luck to them.
My main point was that for most corporations and individuals the risk of using a public cloud with effective security controls and the right kind of data stored and processed there could be within their risk appetitive and therefore private clouds have no long term high profit making potential
The point I'm trying to make is you have to look at security holisticly. Having a super strong segregated network has no point if you are not going to have a similar level of control everywhere else which I can guarantee you the Federal government especially in the US does not have.
So why not take advantage of the cloud, enjoy the cost decrease, increase in resilience and scalability and still have an acceptable level of risk with application of reasonable logical controls?