Cloud security assessment: Guide to choosing the right cloud model for your security needs

When choosing a cloud provider, robust security should be a given.  

But while every cloud provider will tell you they’re “secure”, that doesn’t always mean they’re secure enough for you. Your organisation has its own environment, risk profile and compliance requirements to keep in mind when deciding whether a cloud service is the most secure fit.  

That’s an important decision. In Tenable’s 2024 Cloud Security Outlook study, 99% of organisations said they’d experienced cloud-related breaches in the previous 18 months. That’s not an indictment cloud security. Cloud infrastructure can be as secure as your organisation needs it to be. Instead, it’s a clear sign that your cloud security shouldn’t be left up to chance. Before deciding to invest in cloud infrastructure, you’ll need to have done your due diligence with a cloud security assessment.   

A cloud security assessment is a focused review of an organisation’s cloud infrastructure — whether current or planned — to ensure it meets your organisation’s security, risk and compliance needs. It assesses where your cloud environment is exposed, how effective your existing protections are and what it must be able to support safely. The outcome is a clear security baseline and practical direction on which cloud model best supports your security posture: public, private or hybrid.  

This guide gives you a structured cloud security assessment framework. It also compares security capabilities across public, private and hybrid cloud models. Finally, we’ll provide clear decision criteria aligned to Australian compliance requirements. Whether you’re planning your first cloud migration or reassessing your current deployment, this assessment methodology ensures you have everything you need to make an informed decision that balances your infrastructure and security requirements.  

  

What is a cloud security assessment framework? 

A cloud security assessment framework is a structured methodology for effectively completing a cloud security assessment. It assesses security risks, compliance requirements and operational needs to help organisations make an informed, secure decision about their cloud services. Rather than focusing solely on technical security controls, these comprehensive assessments examine five interconnected pillars that determine which cloud environment best supports an organisation’s security posture. 

  

The 5 pillars of a cloud security assessment framework

Follow these steps when evaluating the security of cloud deployment models.  

  

1: Data classification and sensitivity 

Start by understanding what you’re actually protecting. Financial records, customers’ personal information (PII), your intellectual property and regulated health data all carry different security and compliance obligations. Classify your data (public, internal, confidential, restricted) and determine which categories need the strongest protection. The clearer the classification, the clearer the path to robust security. 

 

2: Threat landscape analysis 

The threat landscape is unique to every organisation. Every industry attracts a different kind of adversary. Financial services face targeted credential attacks and fraud vectors. Healthcare deals with data-theft-driven ransomware. Retail fights skimming and account takeover attempts. The list goes on. Map the threats that matter most to your organisation — the likely attack paths, the impact of a potential breach and how much operational disruption it would cause. From there, build a simple profile of how and why you’d be targeted. This will be your reference point as you move through the rest of the framework.  

  

3: Compliance and regulatory requirements 

Compliance shapes your cloud decisions more than most people realise. Of course, Australian organisations have to meet their Privacy Act obligations, but that’s usually just the starting point. Depending on your organisation or sector, extra rules kick in — PCI DSS if you accept card payments, APRA CPS 234 if you’re a financial institution, the My Health Records Act for healthcare and any increased expectations around data residency or sovereignty. These frameworks become the guardrails for your cloud model, shaping how strong your controls need to be, what architectures make sense and where your data is allowed to live. 

  

4: Infrastructure and architecture needs

Your cloud choice must work with the systems you already run. This stage is where you evaluate integration requirements, performance expectations, redundancy targets and disaster recovery requirements. Legacy systems can pull a lot of weight in these decisions. If you’ve got a heavy on-prem footprint or ageing workloads that were never designed for the cloud, they can easily nudge you toward a hybrid model. 

  

5: Security controls evaluation 

Review the controls you already have and decide which ones you’ll need to strengthen or introduce. That might include identity and access management, encryption, network segmentation, logging and monitoring and the maturity of your incident response process. The results will tell you whether your current posture can handle cloud-scale risk. From there, run a gap analysis to show which cloud model closes those gaps — and which ones might widen them. 

Once you’ve applied this framework to your organisation, you can now confidently evaluate how each cloud deployment model addresses your specific security requirements.  

  

Evaluating private vs hybrid vs public cloud security issues and strengths 

Each cloud deployment model has distinct security advantages and challenges. Understanding these trade-offs through the lens of your security assessment means you can make an informed decision on the cloud deployment model that best aligns with your risk tolerance and compliance obligations.  

  

Public cloud security assessment 

  

Strengths: 

• Resources: The major cloud providers (Azure, AWS, Google Cloud) invest billions in market-leading security infrastructure, a scale that smaller, individual providers simply cannot match.  
• Advanced tools native to the platform: AI-powered threat detection, automated patch management and comprehensive monitoring capabilities come standard, reducing the burden of day-to-day maintenance and management.  
• Compliance certifications: Public cloud providers are pre-certified in major security and compliance frameworks, so their customers can prove compliance straight away.  
• Shared responsibility model: The provider manages infrastructure security, freeing your team to focus where its strengths lie: on application and data security.  

Considerations  

• Multi-tenancy risks: Shared infrastructure introduces potential isolation vulnerabilities and “noisy neighbour” effects. 
• Limited infrastructure control: You can’t implement custom network security or hardware-level controls.  
• Data sovereignty challenges: Providers may store data across multiple international locations, which may complicate regulatory compliance or data sovereignty requirements.    
• Vendor dependency: With public cloud, you’re reliant on the provider’s security practices and incident response capabilities.  
• Public cloud security breaches: The bigger the cloud provider, the bigger target they are. High-profile incidents like those affecting Capital One in 2019 and Uber in 2016 demonstrate this. They were the result of a misconfiguration and a mismanaged credential, respectively, highlighting the limitations of customer-side security controls for public cloud. 

When is public cloud the best fit?

Public cloud works best for:  

• Organisations with standard compliance requirements. 
• Variable or unpredictable workload demands. 
• Limited in-house infrastructure expertise. 
• Development and testing environments. 
• Non-critical or less sensitive data. 

Cloud security assessment questions for public cloud: 

• Can you accept shared infrastructure and multi-tenant environments? 
• Do the provider’s Australian regions satisfy data sovereignty requirements? 
• Do you have the expertise to properly configure security controls? 
• Can you maintain the continuous monitoring of configurations? 

Private cloud security assessment

Strengths: 

• Complete infrastructure control: Private cloud gives you full visibility across hardware, network, and security architecture. You know exactly what’s running, where it’s running and who can touch it.  
• Stronger compliance alignment: It’s easier to show compliance with regulations aimed at sensitive data (such as APRA CPS 234 for financial institutions) when the environment is dedicated and under your control. 
• Data sovereignty by default: Local hosting (such as in Interactive’s Sydney, Melbourne, and Brisbane data centres) ensures your data stays in Australia without extra paperwork. 
• No multi-tenancy surprises: Dedicated resources remove noisy-neighbour issues and isolation risks. 
• Customisable security stack: You can build and fine-tune controls to match your organisation’s policies and risk appetite. 
• Predictable performance: Dedicated infrastructure means consistent monitoring, predictable response times, and no shared-resource contention. 

Considerations:  

• You own the management: Patching, monitoring, updates, and hardening fall on you (or your managed service partner). 
• Expertise required: You’ll need a capable security team or trusted partner (like Interactive) to operate it safely. 
• Higher upfront costs: Infrastructure, tools, and specialised capability come with capital investment. 
• Scaling takes planning: Growth isn’t instant. Adding new capacity requires procurement and lead time. 

Private cloud’s Australian regulatory advantage

For financial institutions and the organisations that work with them, APRA CPS 234 expects security capability to match the criticality of your information assets. Private cloud is the cleanest way to meet that standard in the cloud. Hosting in local data centres also avoids the complexity of sovereignty concerns. 

  

When is private cloud the best fit?

• Financial services and APRA-regulated organisations. 
• Healthcare and any environment handling sensitive PII. 
• Government agencies and defence-aligned contractors. 
• Organisations with steady, predictable workloads. 
• Industries where data sovereignty is non-negotiable. 

Cloud security assessment questions for private cloud: 

• Do you process APRA-regulated financial data? 
• Can you justify the operational and capital investment in private cloud? 
• Do you have (or can you engage) specialised cloud security expertise? 
• Are your workloads relatively predictable? 
• Is data sovereignty a mandatory requirement for your organisation? 

Hybrid cloud security assessment  

Strengths 

• Workload optimisation: Keep your sensitive or regulated workloads in private cloud, while using public cloud for everything that doesn’t need the same level of protection. This is where a thorough security assessment becomes critical.  
• Flexibility: Strike a balance between tight security control and public-cloud cost efficiency. 
• Compliance-friendly: Meet regulatory requirements for critical data without giving up the elasticity and scale of public cloud. 
• Smooth migration path: Move off on-premises infrastructure at your own pace, without creating security gaps along the way. 
• Built-in resilience: Spread workloads across multiple environments for stronger business continuity and geographic redundancy.

Considerations 

• More moving parts: Connecting environments introduces complexity – and a larger attack surface along with it. 
• Policy consistency: Keeping security controls aligned across private and public cloud requires mature tooling and discipline. 
• Integration risk: VPNs, interconnects, and peering links need careful hardening to avoid becoming weak points. 
• Visibility gaps: Monitoring and logging across different platforms can make threat detection slower and harder. 

When is hybrid cloud the best fit? 

Hybrid cloud works best for:  

• Shifting from on-premises to cloud over time. 
• Workloads that vary in sensitivity. 
• Balancing compliance obligations with cost optimisation. 
• Organisations with existing infrastructure investments they aren’t ready to retire.   

Cloud security assessment questions for hybrid cloud: 

• Can you manage security across multiple environments without losing control? 
• Do your workloads have different security requirements? 
• Can you enforce consistent security policies across platforms? 
• Do you have tools for unified monitoring, logging, and threat detection? 

Cloud security assessment checklist: 10 critical evaluation criteria

Use this checklist to score each cloud deployment model against your organisation’s needs. For every item, rate the factor as Critical, Important, or Standard based on how much it matters to your organisation. Once you’ve scored each factor, your result will show you which cloud model might fit best. 

  

Private cloud signals  

Mark these as critical if they apply. Three or more Critical signals mean private cloud is the natural fit. 

 

Data sensitivity & compliance 

• You store or process sensitive assets, financial data, health data or high-volume PII. 
• You’re subject to strict sector-specific compliance obligations. 
• Data sovereignty is a hard requirement, not a preference. 

Control & visibility 

• You need full control over security configurations and infrastructure. 
• You require deep visibility into the entire stack. 
• You have low tolerance for multi-tenancy or shared resource environments. 

Operational characteristics 

• Your workloads are predictable or steady. 
• You maintain legacy systems or significant on-prem investments that must integrate smoothly. 

  

Public cloud signals

Mark these as critical if they apply. Three or more Critical signals suggest public cloud is the natural fit.

 

Scalability & performance flexibility 

• You need elasticity or autoscaling for variable workloads. 
• Your demand fluctuates seasonally or unpredictably. 
• You value rapid deployment or global availability. 

Cost & operating model 

• You don’t want to make a large up-front investment (CAPEX), and would prefer to pay-as-you-go (OPEX) 
• You want cost flexibility  

Workload characteristics 

• Your applications are cloud-native or modernised for distributed architectures. 
• You primarily handle low- or medium-sensitivity workloads.

Hybrid cloud signals 

If you have critical signals in both the private and public categories, hybrid cloud is usually the right call. Hybrid cloud works best when you have Mixed workload profiles: Some workloads require strict sovereignty or isolation while others don’t, and benefit from scale and elasticity. On the infrastructure side, hybrid cloud makes sense if you’re running on-prem infrastructure you’re not ready to decommission. Hybrid cloud also helps you thrive in regulatory and architectural complexity. It lets you operate across multiple compliance frameworks and run older systems alongside modern, cloud-ready applications. 

  

How to interpret your results:

Private cloud is the strongest fit when your critical signals cluster around sovereignty, high data sensitivity, full control, and regulatory pressure. 

Public cloud is the strongest fit when your critical signals emphasise agility, elasticity, and cost flexibility. 

And naturally, hybrid cloud is the strongest fit when your critical signals are a mix of both. Remember, the goal is to match the right workloads to the right environment, not force everything into a single model. 

 

Enterprise cloud security: why large organisations need different assessment criteria 

Enterprise cloud security looks very different once you move beyond the small-to-medium scale. Organisations with 1,500+ employees deal with a level of complexity that requires a deeper, more specialised assessment than the standard framework can offer. When you’re running tens of thousands of endpoints and hundreds of applications across multiple business units, the risk posture changes. So too should the way you assess cloud models. 

  

Scale and complexity factors

Multi-department requirements: 

Enterprises rarely run a single, uniform workload. Instead, you’re dealing with public-facing customer portals, internal finance systems, data analytics platforms, HR software and more. Each of these applications will have different security and performance requirements. A strong assessment recognises that one deployment model may not suit every part of the business. 

 

Regulatory multiplicity: 

Large organisations often operate across several industries and jurisdictions at once. An Australian enterprise with banking, healthcare and retail divisions may need to meet APRA CPS 234, Privacy Act obligations, and other sector-specific regulations simultaneously. This complexity often pushes enterprises toward hybrid models where sensitive workloads get stricter environments and lower-risk workloads leverage public cloud scale. 

  

Enterprise-specific security concerns

Third-party integration security: 

Enterprises have deep vendor ecosystems, and every integration introduces another access path. Your assessment must look closely at how each cloud model handles API security, partner access and supply chain risk. Given how many data breaches occur via third party channels, this is especially relevant to today’s cyber threat landscape.  

  

Legacy system dependencies: 

Critical legacy systems aren’t always cloud-ready. Your assessment should identify which deployment model best supports hybrid architectures that bridge modern cloud platforms with on-prem systems without weakening security boundaries. 

  

Governance at scale: 

Dealing with a high volume of users and applications, enterprises need consistent, centralised governance. But the same complexity that makes governance essential also makes it challenging to implement effectively. Private and hybrid cloud models can make this easier, when compared to managing policies across multiple public cloud tenants and services. 

Given the scale of their challenges, enterprises benefit from working with local managed service providers that understand the regulatory landscape and can support complex, multi-cloud security environments. 

 

Common mistakes to avoid when evaluating cloud deployment models 

Picking a cloud model based purely on cost, without a proper security assessment: Lower upfront costs can look attractive, but short-term savings often hide long-term exposure. Without understanding how a model handles access control, data protection, monitoring and incident response and cost-based decisions can introduce serious security gaps that are far more expensive to fix later. 

Underestimating compliance complexity in public cloud environments: Public cloud platforms can meet high compliance standards. But that doesn’t mean the burden of proof is on them. Many organisations assume compliance is “handled by the provider,” only to discover they still carry responsibility for configuration, access control and data protection. Without clear ownership, compliance risks are easy to miss. 

Assuming data sovereignty won’t impact deployment or architecture choices: If they operate in Australia, they must be able to keep your data there, right? Not always. Where your data is stored — and who can access it — has legal and regulatory implications. Ignoring data residency requirements can force costly architecture changes later or expose your organisation to regulatory penalties and reputational risk. 

Overlooking the expertise required to manage cloud security effectively: Cloud models are only as secure as the people managing them. Without the right internal skills or external support, even well-designed environments quickly become misconfigured, poorly monitored and vulnerable to attack. 

  

Making your cloud infrastructure security decision in 2026 

Choosing the right cloud deployment model isn’t about following industry trends or chasing the lowest cost. It comes down to your organisation’s security requirements, compliance obligations and appetite for risk. If you handle APRA-regulated data, high-sensitivity PII or have strict data sovereignty expectations, private cloud deserves serious consideration. When you factor in breach prevention, governance strength and compliance assurance, private cloud’s ROI remains unmatched. If you’re somewhere in the middle, hybrid cloud is the solution. But to make sure you get the best, not the worst, of both worlds takes planning.  

 If you’re ready to run a structured cloud security assessment, Interactive can help. Our team works with Australian enterprises to evaluate security, compliance and operational needs across private, public and hybrid cloud models. We’ll help you evaluate every option against your unique needs, and map where your workloads belong, so you can confidently choose the most secure cloud approach for your organisation.  

  

Book a cloud assessment.