A Definitive Guide to Cloud Governance

Quick innovation, iteration, and deployment are the glorified advantages of using the cloud. However, this benefit holds only until you have hundreds, if not thousands, of engineers building and deploying software in the same environment. That is when this advantage can turn into a headache. 

Traditional IT environments require a series of approvals from engineers to build and deploy their projects. In contrast, the cloud allows them to choose from managed services and deploy with a single click. Such rapid launching of cloud instances can make your environment chaotic and overwhelming to manage. 

Things can quickly spiral out of control without proper guardrails in place. Top software development companies have addressed this issue by using robust and reliable cloud governance tools. This article explores the concept of cloud governance, discussing its benefits, principles, implementation, limitations, and best practices.

1. What is Cloud Governance?

Cloud governance refers to a clearly defined policy framework that determines how users should work and how services must operate within cloud environments. Adhering to industry standards and implementing best practices are the pathways to effective cloud governance, ensuring that every cloud policy, whether internal, external, or regulatory, is properly enforced. 

Through cloud governance, organizations can efficiently deploy, integrate, and secure their cloud-based assets distributed across multiple environments like Microsoft Azure, AWS, and more. By setting budget parameters within cloud governance, businesses can extract the most value from cloud deployments. 

At any given time, multiple parties, including third-party vendors, may be involved with an organization’s cloud system. Some create it, some maintain it, and others have access to use and manage it. This diversity necessitates continuous adaptation and updating of cloud governance policies. 

Cloud governance frameworks and initiatives provide a robust structure and security processes that align with a company’s data security policies, budgetary requirements, and industry-specific or geographical regulatory compliances.

2. What are the Benefits of Cloud Governance?

Cloud governance is crucial for organizations because it helps maximize cloud outcomes, address challenges, and mitigate associated risks. Below, we discuss why your organization must implement cloud governance. 

2.1 Reduces Administrative Overhead

Initially, organizations relied on spreadsheets and manual processes to monitor costs, compliance issues, and cloud accounts. These methods were also used to control budgets and manage access to cloud resources. Undoubtedly, this traditional approach was highly inefficient, unscalable, and prone to human error. 

With the advent of technological solutions and cloud governance, organizations can now define cloud policies centrally and consistently apply them across the entire organization and multiple cloud environments. This centralized control over cloud costs and access enables timely alerts about issues and facilitates quick responses to threats. By implementing cloud governance, organizations can eliminate unnecessary costs and non-compliant activities, thereby reducing administrative overhead. 

2.2 Reduces Shadow IT Costs

When an organization deploys IT systems or services outside its official departments but for internal use, this is known as shadow IT. Such practices expose the organization to significant security and compliance risks and unexpected costs. Organizations often resort to shadow IT because they lack confidence in acquiring the required resources, or at least not in a timely manner. 

Cloud governance ensures that available resources are used responsibly. It establishes a standardized process for requesting cloud resources while maintaining strong security controls aligned with the organization’s policy. 

2.3 Improves Cloud Resource Management

Top cloud providers, such as AWS, emphasize using a multi-account strategy. They recommend not putting all your eggs in one basket by separating resources and workloads across multiple accounts. 

With effective cloud governance, you can break down the entire system into small cloud accounts, where each account may represent a different cost center, project, or department. This approach simplifies resource management, cost tracking, and access control. 

2.4 Reduced Security Risks

After migrating to the cloud, organizations must implement stringent security protocols to ensure data protection. Compared to on-premise data storage, cloud hosting offers greater convenience. 

However, risks such as unauthorized access and data breaches remain. These risks can be easily mitigated through robust cloud governance. A comprehensive cloud governance plan helps identify vulnerabilities within your system, address them, and prepare for potential incidents. It also uses certain metrics to evaluate the effectiveness of the implemented security measures. 

2.5 Compliance

Many industries, like finance and healthcare, are highly regulated and subject to various regulations, including HIPAA and GDPR. Cloud governance helps these organizations ensure compliance across all their cloud operations and reduces the risks of legal charges or financial penalties.

3. Cloud Governance Model Principles

Understanding the six fundamental principles discussed below will help guide your cloud governance journey. These can also be considered the main objectives of cloud governance.

3.1 Managing Data

Cloud governance acts as a guide for handling the data lifecycle. Storing and managing large datasets can be challenging, so it is important to classify data into different categories based on compliance requirements, business value, and risk factors. 

Ensure that all data stored in the cloud and in transit is encrypted. If your datasets contain confidential or sensitive information, add an extra layer of security, such as role-based access control, to prevent unauthorized access. 

Moreover, cloud governance policies should assist data owners, managers, and developers in safeguarding data. These policies enable you to define data management lifecycles, including how to migrate data between different storage systems and how to protect it throughout the process. Automated data migration tools provided by cloud vendors are ideal for this purpose.

3.2 Financial Management (FinOps)

Cloud cost optimization is essential to avoid overspending on cloud-based tools and resources. Here are a few tips for effective cloud cost governance: 

• Create a Budget: Estimate the costs of cloud operations from development to maintenance. You can either opt for in-house development or choose a third-party provider, depending on your budget and requirements. 
• Define Financial Policies: Cloud governance controls costs by establishing financial policies around the processes, tools, and people involved. These policies help make cost-effective decisions and ensure that expenses don’t exceed the allotted budget. 
• Track Your Expenses: Use a cloud cost tracking tool provided by your cloud provider or a third-party to generate expense reports. This will give you a detailed analysis of exactly where your money is going and how much you are spending. 
• Cost Alerts: Configure alerts to notify you if the total cloud costs exceed a certain threshold – say, 50% of your budget. This gives you time to adjust usage and avoid overspending. 

3.3 Asset and Configuration Management

Cloud resources require careful supervision for effective asset management. Developers are seen creating virtual machines to meet short-term requirements. Once they are fulfilled, these VMs are often forgotten to be turned off. This may incur unnecessary costs, especially if you are dealing with expensive services or large clusters. 

1. Infrastructure as Code (IaC)

Resource management is a challenging undertaking, but it can be simplified by automating it using IaC. No longer do developers need to start and stop the resources manually. IaC takes care of it for you. Just define the infrastructure requirements and IaC will handle the setup automatically. In case any virtual machine or other component malfunctions, IaC takes corrective measures to maintain the pre-determined configuration. 

2. Configuration Management

Ensure that the cloud resources are configured securely and comply with relevant standards and regulations. This includes identifying and correcting misconfigurations that could lead to security risks. Uses monitoring tools to monitor configurations and for drift detection. Take corrective action whenever any deviation is identified from the baseline.

3.4 Security and Compliance Management

Cloud governance covers security operations like data encryption, risk assessment, emergency planning and access management with a focus on meeting the legal and business requirements. 

Here are a few security measures you can take: 

• Leverage reliable frameworks such as NIST to implement cloud governance practices. 
• Avoid service disruptions and data leaks using security tools offered by your cloud providers.
• In case of unique business and compliance requirements, customize the access controls, monitoring systems, and other security tools. 
• Careful monitoring and decision-making help balance risk with compliance. 

The table below explores the most important cloud governance models and standards:

3.5 Managing Performance

Monitoring cloud infrastructure ensures efficient usage and IT service delivery. Deleting unused resources, saving enough space and computer resources for the workload and keeping the costs in check are some of the ways infrastructure monitoring assists with performance management. 

For dynamic allocation of cloud resources, utilize auto-scaling features and monitoring tools. When monitoring the performance, it is important to keep your eye on the following metrics: 

• Latency for web page loading, data retrieval, and API function calls.
• A number of database transactions in a specific period. 
• Number of connected users. 

More importantly, create an alert system where the app manager and the teams are notified when the services don’t function as expected.

3.6 Operations Management (CloudOps)

This aspect of the cloud governance model concerns‌ the way cloud resources offer services. Experts recommend the following actions to ensure efficient management and control over cloud operations. 

• Set Clear Rules and Processes: Clearly define the processes and standards for developing and managing cloud applications and their workloads.
• Prepare Service-level Agreements: Use SLAs for efficient resource allocation and determine performance standards. 
• Deploy App Code: Utilize appropriate tools to handle app code deployment across different environments, including production. 
• Monitor Services: Monitor the performance of each service to ensure that it meets the expectations pre-determined in the service level agreements. 

Work in coordination with the operations team, clarify the identity and access management needs, estimate resource requirements and implement careful monitoring and logging for effective operations management. Setting operations policies and SLAs avoids shadow IT, optimizing both cost and performance. 

4. How to Implement Cloud Governance in a Cloud Environment?

To set up cloud governance, you must use tools and processes that offer a fixed framework for cloud computing operations, like: 

• Automating CI/CD pipelines and other processes for enhanced efficiency and prevention of unauthorized access or unintended modifications. 
• Unifying cloud controls to handle the policies centrally without duplicating them across the cloud. 
• Continuous threat detection and instant alerts to notify about issues as they arise. This also includes automating risk mitigation to avoid violations of regulations. 
• Monitor cloud infrastructure to track costs, resource usage, and performance using observability tools. 
• Prove ongoing compliance with powerful logging, reporting and audit controls. This enables you to investigate suspected attacks or breaches. 

The concept of cloud governance is young and continuously evolving. There is no single tool that can offer all the above-mentioned capabilities. Cloud management and security tools are used to run governance functions. But still, you will need a mix of these solutions to cover all your requirements. 

For example, the AWS management and governance tool is used to control cloud usage across on-premise and AWS infrastructure. Oracle offers automation and multi-cloud visibility. Meanwhile, Wiz and CrowdStrike ensure policy-driven security coverage across all your environments. 

Therefore, it becomes a necessity to analyze your options, i.e., popular and widely used tools in the market and compare them against your project needs to choose the right fit or make a perfect combination of tools that help achieve your cloud governance goals. Here, we explain the journey of cloud governance implementation in three key steps:

Step 1: Evaluate Cloud Operations to Formulate the Necessary Governance Controls

Assess your cloud inventory for issues like weak security measures, poor monitoring and missing processes. Once you identify them, plan on how to resolve them using cloud governance controls. Share your plan with the stakeholders and refine it or adjust it as more information comes in. 

Step 2: Implement Your Controls

In this step, we work towards building up a desired structure for governing cloud operations. First of all, we need to gather or build tools that can address the issues you have identified before. This demands a significant investment and effort but if you have planned and budgeted carefully, then there won’t be much of a problem. 

Step 3: Regularly Audit and Evaluate Your Cloud Governance Strategy, and Subsequently, Implement Necessary Revisions

Cloud governance is not a project where you can rest easy after the launch. It is a dynamic project that demands continuous attention as your requirements keep changing. For instance, you may discover a zero-day vulnerability after provisioning of new services; otherwise, you are subject to more compliance needs. 

Therefore, regularly auditing the cloud usage and reviewing the strategy for appropriate modifications is deemed necessary. Depending on the cloud service types and scale of your organization, the steps may vary. Now, if a business is running a limited number of non-critical cloud apps, then its governance requirements will differ greatly from those of enterprises that run mission-critical multi-cloud deployments. 

Do not make the mistake of applying all kinds of controls you can find outright. It will do more harm than good. Adding more controls increases the setup time. Instead, start small with essential controls and then you can add more later as the need arises with future iterations.

5. Challenges When Implementing Cloud Governance

Despite being highly beneficial, implementing cloud governance is a challenging undertaking. And the challenges vary according to the organization’s cloud adoption goals, industry and size. Understanding these challenges helps prepare for more effective implementation of cloud governance.

5.1 Cloud Adoption

When adopting cloud infrastructure, a business might face issues like existing investments in current data centers, vendor lock-ins and skill gaps. Before adopting the cloud, it is important to have a team that is trained in developing or maintaining the cloud infrastructure. 

On top of that, you must also understand the costs of data migration from an on-premise data center to the cloud. More importantly, make sure that your business doesn’t get locked in with a third-party vendor. Having the flexibility to swap vendors is a must in case they can’t fulfill your changing requirements in the future. 

On a management level, resistance to change might be possible, along with a general lack of metrics for tracking performance and costs. To ensure data security, implementing identity protocols, establishing credential and access management and other security measures can be challenging if your security team isnt familiar with the cloud system, jeopardizing your app, data and business. Embedding management controls into the cloud operations helps create models that can address these challenges.

5.2 Complexity of Cloud Ecosystems

Cloud environments are, without a doubt, an ecosystem with high complexity, which increases exponentially when dealing with multiple cloud services, service providers and regions. Handling a cloud ecosystem is an overwhelming task. But it can be simplified by adhering to the centralized governance practices and tools that offer visibility and control across the entire cloud ecosystem. 

5.3 Shadow IT and Uncontrolled Access

Bypassing the cost controls, audits and policies through unmanaged accounts and unofficial services undermines the cloud governance. Devoid of any official ownership, accountability and visibility, these off-the-books resources will only increase inefficiencies and vulnerabilities. 

The main concern of shadow IT is accountability because there is no clear owner or team that bears the responsibility of the costs and risks. Strong identity controls, approval workflow and entitlement management help address this problem, leaving no room for exploitation.

5.4 Security Risks

Due to their complexities, cloud environments are highly vulnerable, increasing the need for proper safeguards to protect the app and its data. Using robust security frameworks, developers can easily detect and address possible security risks, implement strict access controls and conduct thorough assessments regularly.

5.5 Compliance Requirements

Adhering to industry standards and regulations is a necessity quite difficult to meet. Leverage the compliance management tools to monitor the cloud environment, checking for compliance with regulatory requirements and enforcing relevant policies automatically. 

Regulations are subject to continuous change. Therefore, a business handling hybrid models or global operations finds it challenging to comply with all relevant policies. Quick adaptation through the governance framework enables them to overcome this legal complexity. 

To avoid penalties and maintain the trust of the customers and regulators, perform proactive updates, regular audits and dynamic compliance monitoring. Businesses can easily maintain compliance with changing regulations by blending adaptability with governance. 

6. 7 Cloud Governance Best Practices to Follow

Effective cloud governance requires careful consideration of app and data security, compliance, operational management, cost optimization, and environmental monitoring. Follow the best practices discussed below to achieve maximized outcomes.

6.1 Establish Clear Roles and Responsibilities

Establishing clear roles and responsibilities helps maintain accountability. For example, a cloud finance manager is responsible for handling the budget and optimizing the cloud costs. Apart from that, you must have a core team that controls access to the cloud and data, depending on the roles of the personnel. As a result, the access permissions remain uniform across the organization. 

Using a formal ticketing system, different teams, such as IT and finance, can request access to specific resources, specifying the roles and use cases for which the resources are required. This ensures safety while permitting the teams to access and use required resources. 

Unauthorized access can be thwarted by aligning access rights with job functions, reviewing permissions to mitigate privilege creep, and updating roles and job functions. Train the team leaders on the relevant tools, using them for a comprehensive analysis of cloud usage to make informed decisions about security policies and cloud costs. 

Cultivating a sense of ownership and accountability across different departments maintains operational efficiency and balances access management. 

6.2 Automate

Use automation wherever you can in cloud management. Automated operations are more efficient, coordinated and less prone to errors compared to manual efforts. Integrating an automated system with the cloud governance framework will streamline the governance processes, offering better visibility into the security and compliance of the cloud environment and minimizing the inconsistencies or risks.

6.3 Implement Centralized Monitoring

To know and understand everything that is happening in your cloud environment, it is important to establish a centralized monitoring system that offers end-to-end visibility. This is possible with the help of centralized monitoring tools. They offer automated severity-based alert features, data correlation, interactive dashboards for monitoring, an activity log and security metrics collection. 

A unified platform provides a holistic view into all of your cloud accounts and services. With that, you can enforce policies, identify inefficiencies and track usage, all from a single dashboard. 

6.4 Implement Strong Security and Compliance Standards

Enforce compliance standards and take robust security measures across all your cloud environments for operations like frequent security analysis, identity management and data encryption. Use end-to-end encryption for both data in transit and at rest. It helps protect your app and business data from unauthorized access. 

Verify the identities of your cloud app users and control access to cloud resources through multi-factor authentication and centralized identity and access management systems, respectively, for effective identity management. 

Ensure adherence to internal policies, compliance with industry standards and perform a security audit to find vulnerabilities. These proactive steps are necessary for maintaining governance integrity and preventing data breaches.

6.5 Regularly Review Cloud Governance Policies

Update your cloud policies as the cloud environment keeps evolving. Regularly reviewing the cloud governance policies helps you identify the changes in cloud usage and potential threats. Address these concerns and comply with new regulations through policy updates. Finding operational gaps, security vulnerabilities, identifying and eliminating outdated practices and refining the policies are a few benefits of regular cloud governance audit. Risks like vendor lock-in, service disruption and dependencies that occur when adopting a cloud environment can be easily mitigated with a careful policy review. 

6.6 Establish Incident Response and Recovery Plans

Every organization must prepare incident response and recovery plans in advance to deal with potential threats. It must include disaster recovery strategies, incident detection workflows and predefined escalation paths. Creating these plans is not enough; test them comprehensively to ensure that they would offer the much-needed support or a way out of the potential attacks. You must also maintain secure backups to reduce downtime.

6.7 Limit External Exposure

Limit external exposure through prevention systems, intrusion detection, firewalls and virtual private clouds. This helps prevent data breaches and unauthorized access, protecting your data and cloud infrastructure from both internal and external threats. 

7. Conclusion

A robust cloud governance framework is critical for seamless cloud operations, addressing the operational, compliance, financial and security concerns. You can start by identifying key issues in your cloud governance model and using existing frameworks to address them to fulfill your basic cloud requirements. 

When working with hybrid or multi-cloud environments, use third-party cloud governance tools to aggregate metrics and apply automation to maintain visibility and find anomalies. Define a set of metrics that can provide a benchmark for your organization. Moreover, set automated responses in case of alerts. 

Getting a comprehensive understanding of your cloud governance performance helps foster a sense of accountability across the organization. Transitioning from on-premise to cloud environment, after all, is not just a change in technology but also a change in mindset. Cloud governance is a dynamic process, demanding constant attention, frequent reviews, regular updates and continuous maintenance of the system and its data based on the insights generated through cloud monitoring.

FAQs

What is Cloud Governance?

Cloud governance refers to the policies, regulations, and best practices that organizations implement when managing services within a cloud environment. It aims to improve data security, mitigate potential risks and allow seamless operations across the cloud systems. 

What is the Difference between Cloud Management and Cloud Governance?

The main difference between cloud management and cloud governance is in the approach. While cloud management concerns itself with the daily operations like security, performance, usage monitoring, resource configuration, provisioning and more to manage cloud environments, cloud governance takes a holistic view by setting the policies, processes and access controls within an organization for effective management of cloud services. 

What are the 4 Types of Cloud Services?

Mainly, there are four types of cloud computing, including public cloud, private cloud and hybrid cloud. Within these cloud deployment models, serverless computing, software as a service (SaaS), platform as a service (PaaS), and infrastructure as a service (IaaS) are the four main types of cloud services. 

What are the Six Disciplines of Cloud Governance?

The six disciplines of cloud governance include financial management, cost optimization, operational governance, performance management, asset and configuration management, and security and incident management.