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Corporate Compliance Insights
Home Risk

Gartner: Cloud Concentration Rising on List of Risks

Third-party viability remains top emerging risk

by Staff and Wire Reports
November 2, 2023
in Risk
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The risk associated with dependence on a particular cloud provider for multiple business capabilities is in the top five emerging risks for organizations for the second consecutive quarter, according to a Gartner survey of risk executives.

More than half of the 294 executives who were asked about their emerging or over-the-horizon risks listed cloud concentration as being among their top five risks, behind generative AI availability, evolving sociopolitical expectations and third-party viability, according to Gartner’s report.

“The risk associated with cloud concentration is fast losing its ‘emerging’ status as it is becoming a widely recognized risk for most enterprises,” said Ran Xu, director of research in the Gartner legal risk and compliance practice. “Many organizations are now in a position where they would face severe disruption in the event of the failure of a single provider.”

Widespread outages of cloud services are becoming increasingly common, with a two-hour outage of Amazon’s AWS service affecting companies across multiple sectors, including media, retail and food services just a couple of months before Gartner’s survey was finalized.

Emerging risks by frequency, Q3 2023, Gartner survey
Third-party viability 73%
Evolving sociopolitical expectations 69%
Mass generative AI availability 68%
Cloud concentration risk 62%
Personal data regulatory fragmentation 59%

Third-party viability and mass generative AI availability both make the top five for a second consecutive quarter as well, with third-party viability topping the list in both quarters.

“Third-party viability’s continued position reflects ongoing shifts in supply chain networks, uneven inflationary effects and continued labor pressures stoking fears that third parties may become insolvent,” Xu said. “Mass generative AI availability is concerning risk leaders because almost everyone now has easy access to AI models with nascent (or nonexistent) guidelines in place.”


Tags: Artificial Intelligence (AI)Third Party Risk Management
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