Data Centre Outsourcing - A Security Perspective

By Eddie Chau, Special to ZDNet Asia
Thursday, January 16, 2003 12:00 PM

The hosting industry began as an outlet or external resource for companies hoping to outsource the physical space and bandwidth needed to support their Web sites, and with it, their Web-hosting requirements. Over the years, the hosting industry has evolved into an economic marketplace of strategic importance within the communications industry. At the heart of the hosting industry are data centres and their key attributes that make them outsource-compelling. Data centres themselves have evolved from the plain vanilla FM-type services to IDC model, to the 'managed hosting' model today with its end-to-end managed solutions and services. Aside from the strong economic model rationale that underlines its market value proposition, the data centre today is of even higher strategic importance because of the level of Internet traffic that it generates, the IP based connectivity it sits on, and the volume of data concentration housed.

Overtime, the majority of Internet traffic will increasingly originate from servers housed and maintained by hosting providers, partly owing to the rapid commoditisation of bandwidth and competitive differentiation between different types of data centres; however, from a security perspective, the volume of data transmission, generation, concentration and applications make the data hosting industry too important to ignore. Not least in light of increasing hacking and cyber-criminal activity both in the Internet and Intranet space, and the rise of cyber-terrorism.


The Managed Hosting Value Proposition today
  • Accelerated time to marketLower entry costs
  • Lower entry costs
  • Sidesteps IT resource shortage
  • Less costly and more timely application upgrade cycle
  • More robust network performance
  • Tailored service level agreements
  • Lower total cost of ownership (TCO)
  • Peace of mind in terms of security, business contingency and continuity

Security as a key aspect of this Mission-Critical attribute
From a market perspective, customers will always differentiate a data centre of today from the data centre of yesterday, and look at what differentiates the same one of today tomorrow - and most often, preferably for the same price. In addition to the primary role that a data centre provides in terms of collocation, network connectivity, data storage, IT services and shared or dedicated applications, its security features have become a fundamental consideration for the ever-sophisticated customer in deciding which data centre it eventually wants to outsource to.

Outsourcing Trust
A common reason that companies cite for not outsourcing their Internet infrastructure is the concern over security. In essence, when a customer outsources the management of its data to a data centre, it not only places expectations on the data centre to deliver its hosting/network requirements, but also places trust in the hosting company to handle and protect its data. In other words, the customer feels confident in the level of professional service it will receive from the data centre. Hence, security is always a primary concern or, if not, the foremost consideration in any outsourcing decision-making process.


A survey by CIO ASIA in 2000 showed that security was the primary most important factor in considering whether to outsource its IT operations to a data centre.

Reasons For And Against Outsourcing    
% Small       Medium       Large      
Security 36% 29% 25%
Flexibility/Svs. Options 29% 19% 19%
Customer Service 14% 10% 13%
Cost 14% 10% 13%
Performance 7% 5% 6%
Continuity in Mergers 0% 5% 6%
Other 0% 24% 19%

It is already well documented that for the Internet to thrive as an e-commerce backbone, companies and individuals need to feel that transactions and proprietary information are secure. For e-commerce dependent service providers who outsource their Internet infrastructure to data centres for management, vicious attacks like a Distributed Denial-of-Service (DOS) can cripple their entire operations instantaneously. References to hacking attacks on Amazon, CNN, eBay, NASA, BBC and other popular Web sites are often brought up as powerful reminders of the lurking dangers on the Internet. As such, data centres must ensure that network security technology and the requisite security expertise supports the other product suite offering, and actively recommend security offerings to any potential customers. Owing to the increasing level of attack sophistication, data centres should also continuously consider and internalize new e-security measures to stay ahead of hackers and malicious intruders.

A Sampling of Attacks    
Type Description
Backdoors Executable codes enabling entry without authorization
Session Hijacking Replacing one party of a legitimate TCP connection
Packet Sniffing Reading unencrypted passwords off a network
Packet Spoofing Masquerading as a trusted host in order to insert a backdoor
Application-layer Hidden executable code within common software and protocols
Denial of Service Flooding a host/router with TCP/ICMP requests to shut it down
Source: e-Cop.net


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