Exclusive Whitehall IT chiefs have been warned by the intelligence agency GCHQ that security problems with cloud computing could foil their plans to use the technology to slash the cost of public services.
The assessment forms part of the first report of the Cyber Security Operations Centre (CSOC), seen by The Register. The new internet intelligence gathering unit, located at GCHQ's "concrete doughnut" in Cheltenham, will begin operations next month.
"Cloud computing could form an important part of government cost-cutting exercises, but cloud computing hosts are likely to want to site their storage where it is cheapest for them to do so, which may mean that sensitive information or intellectual property is physically stored in another country, potentially one which might have an interest in using the information for its own purposes," CSOC says.
The report was prepared for the Cabinet Office, which sets overall government IT strategy. CIO John Suffolk recently promoted cloud computing technology and use of private providers as ways to cut costs.
"You can't have hundreds of data centres and tens or even hundreds of networks. You have to ask 'Do we need to do all this ourselves?'," he said.
"I just don't think it's a suitable model for the next ten years."
However, CSOC sounds a more sceptical tone. It explains that while for some users cloud computing will bring security benefits, because malware protection will be managed by the service provider, the risks could be great.
"Compromised login credentials would give an attacker access to the user's whole system from anywhere in the world, enabling a full identity theft," the report says.
"This could limit the usefulness of cloud computing to government and commercial organisations unless a solution is found."
CSOC's view acts as a counterpoint to enthusiasm for cloud computing in Westminster and Whitehall as they gear up for a bout of massive post-recession cuts.
The technology figures large in the Conservatives' IT strategy, too. Criticising the current government's record of schedule and budget overruns on large IT projects, they have suggested commercial operators such as Google and Microsoft could maintain health records in the cloud, for example.
As well as highlighting direct security threats to cloud public services from data theft, the CSOC report also warns that increasing official reliance on the internet could cause a "catastrophic" breakdown in confidence in the government if the UK were subject to a cyber attack such as distributed denial of service. We reported in detail on that earlier this week. ®