Overview
Moving workloads to the cloud and adopting SaaS applications is a business accelerator, but each new provider introduces risk that needs to be evaluated before contracts are signed. This template gives security and procurement teams a consistent way to assess cloud and software providers across security architecture, data handling, compliance posture, and operational resilience. Use it for new vendor evaluations, annual reviews, and contract renewals.
Assessment Categories
- Cloud architecture and multi-tenancy isolation
- Data encryption at rest, in transit, and in use
- Identity federation, SSO, and MFA support
- API security and integration practices
- Data residency, sovereignty, and cross-border transfers
- Incident response and breach notification SLAs
- Service level agreements and uptime commitments
- Compliance certifications (SOC 2, ISO 27001, etc.)
- Backup, recovery, and data portability
- Subprocessor management and transparency
Provider Comparison Matrix
| Criteria | Weight | Evaluation method |
|---|---|---|
| Security architecture | 20% | Architecture review, penetration test results |
| Data protection | 20% | Encryption standards, key management, DLP |
| Compliance | 15% | Active certifications, audit reports, attestations |
| Identity and access | 15% | SSO/SAML support, SCIM provisioning, MFA |
| Operational resilience | 15% | SLA terms, disaster recovery testing, RTO/RPO |
| Data portability | 10% | Export formats, API access, contract exit terms |
| Transparency | 5% | Subprocessor lists, incident history, changelog |
Key Questions to Ask Every Provider
Start with the fundamentals: Where does my data physically reside? Who at your company can access it? How is tenant isolation enforced? What happens to my data if I terminate the contract? Ask for their most recent SOC 2 Type II report and look for exceptions. Request a summary of penetration test findings from the last 12 months. Ask about their incident notification timeline and whether it meets your regulatory requirements. These questions cut through marketing language and get to what matters.
Red Flags in Cloud Assessments
- No tenant isolation or shared database architecture without encryption boundaries
- Inability to support SSO or SCIM for user provisioning
- No SOC 2, ISO 27001, or equivalent third-party attestation
- Vague or missing data processing agreements
- No documented disaster recovery plan or untested backup procedures
- Refusal to share subprocessor lists or notify of changes
Contract and Exit Planning
Security does not stop at onboarding. Ensure your contract includes the right to audit, breach notification timelines, data deletion obligations at termination, and subprocessor change notifications. Define data portability requirements upfront so you are not locked in. Include SLA credits for downtime and a clear escalation path for security incidents. Plan your exit strategy before you sign, not when you are already trying to leave.
Frequently Asked Questions
Should we assess all SaaS applications or only critical ones?
Prioritize based on data sensitivity and business impact. Any application that processes, stores, or has access to sensitive data deserves a full assessment. Low-risk tools with no data exposure can go through a lighter review.
How often should cloud provider assessments be repeated?
Annually for critical providers. Every 18 to 24 months for moderate-risk providers. Trigger ad-hoc reassessments when there is a breach, significant product change, or acquisition.
What if a provider will not share their SOC 2 report?
This is a significant concern. Ask if they have an alternative attestation like ISO 27001 or a CAIQ (Consensus Assessments Initiative Questionnaire). If they refuse all evidence sharing, weigh whether the risk is acceptable or if alternatives exist.
How do we evaluate multi-cloud environments?
Assess each cloud provider independently, then evaluate how data flows between them. Pay attention to inconsistent security controls across providers and ensure your monitoring covers all environments equally.
What is the role of a CASB in cloud assessment?
A Cloud Access Security Broker helps enforce policies across SaaS applications, providing visibility into shadow IT, data loss prevention, and threat protection. It complements the assessment process by providing continuous monitoring after onboarding.
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