WHITE PAPER SPON. Evaluating Managed File Transfer in the Cloud: What You Need to Know. Published October 2012 SPONSORED BY

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1 WHITE PAPER N Transfer in the Clud: What Yu Need t Knw An Osterman Research White Paper Published Octber 2012 SPONSORED BY SPON spnsred by spnsred by! Osterman Research, Inc. P.O. Bx 1058 Black Diamnd, Washingtn USA Tel: Fax: twitter.cm/msterman

2 EXECUTIVE SUMMARY Every rganizatin needs t have a secure and reliable methd t manage, gvern and autmate their file exchange prcesses. After all, an uncrdinated apprach puts the security and availability f critical data at risk. Transfer in the Clud: What Yu Need t Knw A file exchange strategy has multiple cmpnents t it. Mst rganizatins are facing challenges with persn-t-persn file exchange, and alng with this we see the B2B, system-t-system, and system-t-persn aspects f file exchange are grwing in imprtance and are increasingly subject t security and ther cncerns. Althugh mst rganizatins tday use , FTP, scripting, clud-based dcument repsitries and ther tls t send files, these mdes f file transprt suffer frm a number f prblems, including a lack f auditability f the sent files, a lack f reprting capabilities, n visibility int the transfer prcess, and an inability t enfrce access r permissin cntrls ver the cntent. T vercme these prblems, rganizatins must be able t: Enfrce IT, security and cmpliance plicies acrss the entire rganizatin fr every kind f file transfer. Autmate data transfer prcesses and wrkflws s as t imprve their efficiency. Replace ld and insecure scripts that can lead t plicy vilatins. Enable straightfrward persn-t-persn file transfer. In shrt, traditinal tls and prcesses used fr file transprt typically d nt prvide the necessary level f cntrl ver cntent and access, resulting in a much higher likelihd f a data breach, inefficient r slw delivery f cntent, and reduced emplyee prductivity. SO WHAT? Organizatins require a transfer slutin that will vercme the prblems with current prcesses and wrkflws: ne that will enable rganizatins t manage and gvern the exchange f files and data. Such a slutin needs t enable full administrative cntrl ver hw and where cntent is sent, wh has access rights t the sent files, full encryptin f the cntent thrughut its lifecycle, and the ability t reduce data risks and drive the csts f file transfer as lw as pssible. Organizatins f every size shuld seriusly cnsider adpting a clud-based transfer slutin t cmpliment, r ptentially replace, an n-premise file transfer slutin. The advantages f managing file transfer in the clud and include: Organizatins require a transfer slutin that will vercme the prblems with current prcesses and wrkflws: ne that will enable rganizatins t manage and gvern the exchange f files and data. Virtually n up-frnt csts Mre predictable csts ver the life f the system Rapid deplyment Cnservatin and refcus f in-huse IT resurces Guaranteed uptime Greater scalability and flexibility Rbust security Built-in disaster recvery The ability t integrate with an n-premise transfer slutin A clud-based file transfer slutin integrated with n-premise capabilities can be useful fr gegraphically distributed rganizatins, allwing field ffices withut dedicated IT staff t have the same level f functinality as a headquarters served with an n-premise slutin Osterman Research, Inc. 1

3 ABOUT THIS WHITE PAPER This white paper discusses the critical rle f transfer, why a cludbased transfer service is a viable alternative r cmpliment t npremise slutins, and key issues t cnsider when evaluating varius clud fferings. Transfer in the Clud: What Yu Need t Knw WHY MANAGE YOUR FILE TRANSFER OPERATIONS? The transfer f files between systems and applicatins behind a crprate firewall, between internal systems and thse f business partners, r between users is an essential part f the cmmunicatins flw fr any rganizatin. Given that the vast majrity f the bits that flw thrugh crprate netwrks are files, there are fur reasns that every rganizatin must manage its file transfers prperly: 1. T imprve crprate gvernance Crprate gvernance ver infrmatin transfer is abslutely essential and is becming mre imprtant as a result f increased versight by gvernment. Statutry and ther requirements such as HIPAA, Sarbanes-Oxley, PCI DSS, Basel II and the Gramm-Leach-Bliley Act require that rganizatins manage infrmatin transfers prperly. Specifically, a sund file transfer prcess shuld prvide fr the fllwing elements: Administrative cntrl s that IT r anther crprate entity can manage the flw f infrmatin in a cmpany Cmpliance auditing and reprting t ensure that infrmatin is sent in accrdance with crprate plicies and legal requirements Visibility int the file transfer prcess s that, as discussed in the pint abve, the transfer f files can be tracked and audited thrugh the infrmatin lifecycle Highly secure file transfer prcesses in rder t minimize the ptential fr a data breach, and als t enable cntrl f the infrmatin and fr hw lng it can be accessed Fundamentally, crprate gvernance is abut reducing crprate risk any file transfer system must minimize the risk f data breaches r ther prblems t the greatest extent pssible Using a rbust transfer slutin can replace scripting prcesses which are ften cmplex, hard t maintain and insecure and allw fr the autmatin f wrkflws in an rganizatin. 2. T imprve crprate prcesses and wrkflws Anther imprtant reasn t implement a secure transfer slutin is t imprve the management and efficiency f data transfer wrkflw prcesses. Using a rbust transfer slutin can replace scripting prcesses which are ften cmplex, hard t maintain and insecure and allw fr the autmatin f wrkflws in an rganizatin. This can make wrkflws mre reliable, as well as imprving the cmpliance and gvernance capabilities ver these wrk prcesses. Mrever, a rbust MFT slutin can increase prductivity by autmating manual and labr-intensive prcesses; simplify the creatin f cmplex, multi-step and lgical wrkflws; run prcesses n a schedule-driven, event-driven r n-demand basis; and integrate with third-party schedulers, scripts and applicatins t cntrl wrkflws. 3. T prvide secure, reliable and guaranteed delivery fr all types f file and data transfer Apprpriate management f file transfers between applicatins r individuals is essential in rder t enable secure and reliable transfer f critical infrmatin. MFT lets an rganizatin enfrce IT, security and cmpliance plicies 2012 Osterman Research, Inc. 2

4 cnsistently; prvides reprting and analysis t measure perfrmance and ensure that SLAs are met; and allws business-t-business, multiprtcl cnnectivity. In the absence f MFT: Transfer in the Clud: What Yu Need t Knw Cntent is nt encrypted in mst cases. There is n prf that the cntent has actually been received. Cntent cannt be tracked after it is sent. There is n cntrl ver hw lng the sent cntent is available fr access. Access permissins cannt be established fr cntent that is sent. There is n audit trail fr the delivery f infrmatin. In shrt, withut a sund file transfer mechanism in place, there is little cntrl r visibility int the file transfer prcess. 4. T alleviate the burden n systems Anther imprtant reasn t implement a sund transfer slutin is t alleviate the enrmus burden n systems. Tday, the vast majrity f files that are sent persn-t-persn use the backbne t prvide transprt fr this cntent. The result is that mre than 95% f the bits that flw thrugh systems tday are files and nt messages themselves. The cnsequences f using as the file transfer system are several and include higher IT csts t manage the rapidly grwing strage requirements in mst systems, wasted user time cleaning ut mailbxes in rder t stay under mailbx size qutas, slwer message delivery, increased server dwntime, lnger nightly backups, and lnger restres after an server crashes. Using a true file transfer system that emplys an client plug-in r a brwser-based interface will result in faster delivery, greater server reliability and lwer strage csts. WHY MANAGE YOUR FILE TRANSFER OPERATIONS IN THE CLOUD? Clearly, managing and gverning file transfer peratins is essential t imprving crprate wrkflw prcesses, ensuring the reliability f infrmatin delivery, and mitigating risk. While transfer systems can be deplyed n-premise r in the clud, there are several key reasns t cnsider fr managing file transfers using clud services: Virtually zer up-frnt cst Unlike n-premise transfer systems that require the purchase f servers and sftware, there are virtually n up-frnt csts assciated with a clud-based transfer capability. The switch frm a capital expenditure (CAPEX) mdel t an perating expense (OPEX) mdel is ne f the mst cmpelling reasns fr switching t a clud-based service, since IT des nt have t devte a significant prtin f their available funds t the deplyment effrt in a single budget cycle. Unlike npremise managed file transfer systems that require the purchase f servers and sftware, there are virtually n up-frnt csts assciated with a clud-based transfer capability. Predictable nging csts Related t the near zer up-frnt cst f a clud-based transfer service is that nging csts are predictable ver the life f the service prvider cntract. Unlike n-premise systems that may require unexpected IT attentin when things g awry, clud services ffer a predictable cst per user ver a lng perid. Even as users are added t the system because f cmpany expansin, the cst f the transfer service will increase predictably and steadily. Use f in-huse IT labr fr mre prductive wrk Fr the vast majrity f rganizatins, managing a file transfer capability cannt be cnsidered a cre cmpetency. The result is that even if an n-premise 2012 Osterman Research, Inc. 3

5 transfer system is managed extremely well, IT s management f it n matter hw imprtant file transfer is t the rganizatin will nt add significant value t the rganizatin by virtue f internal IT staff managing it. Transfer in the Clud: What Yu Need t Knw Hwever, if IT des nt have t deply r maintain an n-premises MFT capability, this will save time and mney, plus increase IT staff members availability t fcus n ther key initiatives. A clud service wuld free up IT resurces that wuld therwise be respnsible fr deplying, managing and maintaining cmplex partner, applicatins and cllabrative file and data transfers, since internal IT staff wuld nt have t deal with sftware installs, hardware maintenance, patching and ther activities necessary t maintain npremises infrastructure. Deplyment in hurs, nt weeks r mnths Anther imprtant advantage f a clud-based transfer capability is that it can be deplyed very rapidly typically within a few hurs unlike npremise systems that can take weeks r mnths fr the purchase f servers and sftware, their deplyment and cnfiguratin, and their integratin with ther n-premise systems. All a cmpany needs t d is prvisin its users and the service can be used almst immediately. Built-in high availability Typically, clud-based transfer capabilities ffer very high levels f reliability. Of curse, this is dependent n the prvider selected, but mst leading prviders have deplyed a carrier-grade infrastructure that includes redundant cmmunicatin links between multiple data centers, replicatin f custmer data between these data centers, backup generatrs, and 24x7 staffing. Fr mst rganizatins, the cst and expertise t reprduce this level f reliability using n-premise systems wuld be prhibitive. While n-premise transfer systems can be highly reliable, cludbased services are generally mre reliable. Fr example, if an n-premise transfer system experiences just fur hurs f dwntime per mnth fr activities like server upgrades, maintenance and ther planned activities, this will result in a maximum annual uptime f 99.45%. Add in unplanned events like pwer utages r server crashes ttaling anther hur f dwntime per mnth, and the uptime figure drps t 99.32%. While this level f uptime is reasnable fr mst n-premise systems, leading clud-based prviders generally prvide 99.9% uptime. Can extend the investment in n-premise MFT t the clud in a hybrid architecture A transfer capability need nt be an n-premise r clud decisin: many rganizatins are taking a hybrid apprach by deplying bth. Fr example: Anther imprtant advantage f a clud-based transfer capability is that it can be deplyed very rapidly typically within a few hurs. An rganizatin can maintain revenue-driven B2B and B2C transfers such as purchase rders, shipping, inventry, etc. n-premises and mve ther types f file transfers t the clud. Critical custmer and partner data transfers culd be kept n-premises t prvide the highest levels f supprt, while less time-sensitive r less critical transfers culd emply a clud service. An rganizatin culd pt t create and schedule multi-step transfer wrkflws and prcesses n-premises, but then have them executed in the clud t save n-premises IT resurces, cst and bandwidth. Highly sensitive data that is subject t strict regulatry cntrl, such as custmer financial infrmatin, culd be transferred using n-premises capabilities, while less sensitive data culd be transferred using a clud 2012 Osterman Research, Inc. 4

6 service. Cnversely, a cmpany that is nt cnfident in its internal ability t meet strict regulatry bligatins culd use a reliable clud prvider fr its mst sensitive transfer peratins, and use internal capabilities fr less sensitive transfers. Transfer in the Clud: What Yu Need t Knw The right clud prvider will ffer a rbust and secure infrastructure It is abslutely essential that any prvider f clud-based transfer services ffer a highly reliable infrastructure that can handle the lad placed n its by its custmers. Hwever, just as imprtant is the fact that the infrastructure be highly secure s that breaches f data cannt ccur. This requires the clud prvider t deply rbust physical security fr any lcatin that huses custmer data, as well as rbust security and encryptin against malware, hackers, advanced persistent threats and the like. Because even a single data breach can cst multiple millins f dllars t remediate, security fr a clud-based prvider f transfer capabilities must be bulletprf. Clud prviders that prperly manage their custmers data will nt permit their unauthrized users t access any custmer cntent. Mre scalable and elastic than n-premise deplyments Anther imprtant advantage f a clud-based transfer capability is that it is mre easily scalable and elastic than n-premise deplyments. In ther wrds, a clud service is better able than n-premise systems t scale upward t meet spikes in usage, as well as t scale dwn t reduce csts when demand slws. The latter is particularly imprtant fr cmpanies that are seeking t reduce csts after a reductin-in-frce r during a seasnal slwdwn f file transfer activity. When managed n-premises, additinal sftware licenses, additinal hardware r additinal bandwidth may need t be deplyed just in case spikes in demand necessitate it this is nt the case with clud prviders that already have excess capacity and can simply deliver mre bandwidth n demand. Built-in disaster recvery Anther advantage f a clud-based transfer system is that with the right prvider disaster recvery is built-in. This is particularly imprtant fr rganizatins that have gne thrugh sme srt f natural disaster r ther unfreseen event that culd prevent them frm accessing their n-premise infrastructure. The use f a clud service fr file transfers will enable emplyees t cntinue wrking even when their primary ffice lcatin is unavailable. KEY ISSUES TO CONSIDER WHEN EVALUATING SERVICE OFFERINGS When evaluating clud-based transfer fferings, there are fur imprtant issues that shuld be cnsidered: A cmpany that is nt cnfident in its internal ability t meet strict regulatry bligatins culd use a reliable clud prvider fr its mst sensitive transfer peratins, and use internal capabilities fr less sensitive transfers. There are wide variatins between clud service fferings There are tw basic classes f fferings that ften get lumped tgether as transfer fferings. The first are true MFT slutins that prvide visibility f files and data thrughut the entire transfer prcess and its lifecycle; enfrcement f IT, security and cmpliance plicies cnsistently, such as access cntrl; auditing and end-t-end encryptin f files. The secnd grup f fferings are basic strage and synchrnizatin services that will enable cllabratin between emplyees, suppliers and custmers. Mrever, using a platfrm-as-a-service ffering based n an ffering like Amazn s EC2 n which anther vendr s slutin is deplyed still requires multiple pints f cntact t reslve prblems, perfrm upgrades, etc. It is imprtant t nte that bth classes f slutins are useful and can be cmplimentary, but they are used fr fundamentally different purpses. Slutins in the first grup are designed fr highly secure, highly auditable file 2012 Osterman Research, Inc. 5

7 transfer prcesses that enable a high degree f crprate gvernance. Slutins in the secnd grup are designed slely fr sharing files between individuals r helping individuals r wrkgrups t keep a set f files synchrnized acrss multiple platfrms. Again, bth classes f file transfer prducts are useful, but they are nt interchangeable. Transfer in the Clud: What Yu Need t Knw Price is imprtant, but shuld nt be the primary cnsideratin Anther imprtant cnsideratin fr any clud-based transfer slutin is its price. There is variability between the prices fr different fferings, but price shuld typically nt be the primary cnsideratin when it cmes t slutins that are s integral t a cmpany s prcesses. Mrever, given the enrmus cst f even a single data breach, the security and gvernance capabilities f the slutin shuld be cnsidered as mre imprtant than the price f the slutin itself. Cnsider all f the csts assciated with n-premise file transfer When cmparing the csts f an n-premise transfer slutin versus a clud-based alternative, it is imprtant t factr in all f the csts f the frmer. Our research has fund that many decisin makers d nt add in all f the n-premise csts when making the cmparisn, giving n-premise slutins an unfair cst advantage in the analysis. Fr example, all f the fllwing csts shuld be factred int the cst f an n-premise transfer slutin: Physical infrastructure, such as server hardware, perating systems sftware, applicatin sftware and ther capabilities. Given that the deplyment f an n-premise slutin requires a significant amunt f upfrnt capital expenditure, it is imprtant t accunt fr all f the infrastructure elements that are required t maintain the n-premise transfer system. The IT labr that ges int evaluating, cnfiguring, deplying, maintaining and upgrading the n-premise infrastructure. The financial and pssible tax benefits f migrating frm a capital expenditure (CAPEX) t an perating expense (OPEX) mdel. This can create significant financial benefits fr an IT department that des nt have t budget fr large expenditures t deply hardware and sftware and the IT labr that ges alng with deplyment. When cmparing the csts f an n-premise transfer slutin versus a cludbased alternative, it is imprtant t factr in all f the csts. Pwer csts, which can add substantially t the cst f an n-premise slutin. Fr example, assuming that a transfer server cnsumes 750 watt-hurs f electricity during nrmal peratin, the annual cst t perate this server will be $1,084 per year 1 in Cnnecticut where electricity prices are fairly high. Even in Idah, where electricity csts are lw, the annual cst t run this server will be $445 per year 2. Heating, ventilatin and air cnditining csts fr the n-premise equipment. The cst f flr and rack space t huse the servers. The pprtunity cst f the IT labr devted t managing the slutin. The last cst element is ne that many rganizatins verlk because they cnsider it t be a sunk cst f an n-premise system. Fr example, if we assume that an IT staff persn must spend fur hurs per week verseeing the n-premise transfer infrastructure, and that the fully burdened cst f that IT staff persn is $80,000 annually, the annual cst t manage the system will be $8,000. Hwever, while this cst is significant, the cst f nt Ibid 2012 Osterman Research, Inc. 6

8 using this individual fr a prject r initiative that culd yield mre value must als be factred int the equatin. Given that gd IT staff peple are nt particularly easy t find, using part f an individual s time t versee a managed file transfer system culd be a waste f a valuable and scarce IT resurce. Transfer in the Clud: What Yu Need t Knw Cmpare the security f n-premise and clud-based file transfer fferings Finally, it is critical t accurately cmpare the security f n-premise and cludbased transfer slutins. While many decisin makers are reluctant t cnsider the latter because f their fear that sensitive r cnfidential data will be cmprmised when in the hands f a third party, it is imprtant fr these decisin makers t ask themselves the fllwing questins: Hw secure are the rms in which transfer servers are currently hused in ur cmpany? D these rms require tw-factr authenticatin t enter as is the case with leading clud prviders? Is a lg kept f all visitrs wh access these rms? Are we abslutely certain that unauthrized parties will nt be able t gain access, such as might ccur if an emplyee hlds pen a dr fr a visitr? D ur physical facilities cmply with standards and practices like PCI, FIPS- 140, SSAE 16 Type II SOC 1 r Safe Harbr? D ur administratrs have access t the data files? Can we prvide a cmplete audit trail f all activities that ccur in ur npremise data center? D we prvide fr granular access cntrls and enfrce strict user permissins fr all cntent stred in ur n-premise data center? Hw rbust are ur internal intrusin detectin and intrusin preventin systems? D we prvide end-t-end encryptin fr all data, bth in-transit and at rest? What des it r will it cst t maintain such tight cntrls using nly npremise systems and in-huse IT persnnel? Decisin makers shuld seriusly cnsider using a clud-based transfer slutin in rder t reduce the ttal cst f wnership fr this capability relative t an npremise slutin. In shrt, a thrugh cmparisn f n-premise versus clud-based transfer systems will mst ften result in the nd ging t the latter. SUMMARY A transfer slutin is essential fr any rganizatin t transfer cntent between individuals and systems. Such a slutin shuld prvide highly secure transfer f cntent, auditing capabilities, maintenance f strict cmpliance with crprate and ther plicies, be as inexpensive as pssible t perate, and perate independently f the crprate system. Decisin makers shuld seriusly cnsider using a clud-based transfer slutin in rder t reduce the ttal cst f wnership fr this capability relative t an n-premise slutin, and t maintain highly secure transfer capabilities Osterman Research, Inc. 7

9 ABOUT IPSWITCH FILE TRANSFER Ipswitch File Transfer is a glbal prvider f transfer slutins that deliver the cntrl necessary t enable gvernance and cmpliance with the ease-fuse that supprts brad end-user adptin. Millins f glbal users - including the majrity f Frtune 1000 enterprises and gvernment agencies rely n Ipswitch fr their file transfer needs and data wrkflw needs, with slutins bth n-premise and in the clud. Transfer in the Clud: What Yu Need t Knw Learn mre at Osterman Research, Inc. All rights reserved. N part f this dcument may be reprduced in any frm by any means, nr may it be distributed withut the permissin f Osterman Research, Inc., nr may it be resld r distributed by any entity ther than Osterman Research, Inc., withut prir written authrizatin f Osterman Research, Inc. Osterman Research, Inc. des nt prvide legal advice. Nthing in this dcument cnstitutes legal advice, nr shall this dcument r any sftware prduct r ther ffering referenced herein serve as a substitute fr the reader s cmpliance with any laws (including but nt limited t any act, statue, regulatin, rule, directive, administrative rder, executive rder, etc. (cllectively, Laws )) referenced in this dcument. If necessary, the reader shuld cnsult with cmpetent legal cunsel regarding any Laws referenced herein. Osterman Research, Inc. makes n representatin r warranty regarding the cmpleteness r accuracy f the infrmatin cntained in this dcument. THIS DOCUMENT IS PROVIDED AS IS WITHOUT WARRANTY OF ANY KIND. ALL EXPRESS OR IMPLIED REPRESENTATIONS, CONDITIONS AND WARRANTIES, INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, ARE DISCLAIMED, EXCEPT TO THE EXTENT THAT SUCH DISCLAIMERS ARE DETERMINED TO BE ILLEGAL Osterman Research, Inc. 8

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