Liability risk drives outsourced hosting: Macquarie Corporate

Concern about liability risk amongst senior management is driving security decisions out of IT departments and into boardrooms, according to Macquarie Corporate Telecommunications' manager of hosting solutions, Glen Noble.

"As it becomes clear that senior management and directors will be held responsible for damage caused by security breaches, unless they can show they have taken measures to guard against the problem, they are becoming more involved in the decision process," Noble said. "They realise they simply don't have the money to do it properly."

According to Noble the increased level of concern was driving larger companies towards outsourced hosting solutions and leading hosting companies to place increasing emphasis on their security infrastructure as a competitive differentiator.

"Security is one of the key differentiators between outsourced hosting operators," Noble said. "Everyone has the requirement, and more and more companies are realising it is too expensive to do it properly in-house."

While he warns that hosting companies do not take on the liability for security breaches, they do outline the measures taken to protect a network from attacks, providing senior management with a line of defence should they find their system compromised.

"Our contracts basically outline the things we are able to do, and we make the point that most IT departments are so busy they are not able to focus specifically on IT security within an organisation," Noble said. "The costs associated with guarding against intrusion detection 24/seven are prohibitive, whereas we have the infrastructure and the staff to take counter measures at 3am if it is necessary."

However, Noble warns that companies should not become complacent even if security is a key component of their outsourced hosting arrangements.

"Research indicates that the greatest threat comes from within - and especially from ex-employees," Noble says. "We can provide protection from what might come in from outside, but it is still up to the system administrators to make sure that people can no longer access the network once they have left a company."

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