Policy as Code Approach: How to Streamline Cloud Governance

As organizations migrate to the cloud, managing complex cloud infrastructure has become a critical priority. Cloud governance is no longer optional — it’s essential for maintaining security, optimizing costs and ensuring operational efficiency. Policy as Code (PaC) is a key component of modern governance, automating the detection of policy violations through codified rules to prevent misconfigurations, a leading cause of security issues. PaC empowers organizations with scalable, consistent and compliant cloud operations, replacing outdated manual processes with advanced automation. It’s a smarter, more efficient way to take control of the cloud.

This article explores the importance of cloud governance, the risks of misconfigurations and how PaC addresses these challenges to improve efficiency, security and compliance.

What is Cloud Governance?

Cloud governance involves defining, implementing and monitoring a framework of policies that guides an organization’s cloud operations. It provides control across key areas like cost management, security, operational efficiency and deployment, ensuring cloud resources align with business objectives.

Cloud governance alone doesn't guarantee compliance with laws or standards, as they are part of a Governance, Risk and Compliance (GRC) framework. Cloud services offer convenience and efficiency but can introduce security risks. Misconfigurations and weak access controls create vulnerabilities leading to violations of an organization’s information security policy.

To address these challenges, an organization must first understand the consequences of mismanagement within cloud environments, especially since configuration errors are a leading cause of cloud-related security incidents. A proactive and expert-driven approach is essential to mitigate these risks.

Impact of Inadequate Configuration Management

Vulnerabilities caused by misconfigurations and inadequate change control often arise from human error, lack of expertise or insufficient security measures. Integrating multiple services and applications adds complexity to cloud environments, increasing the risk of accidental or malicious damage.

The absence of governance controls can have negative impacts on business:

• Unencrypted data compromises the security of sensitive information like payment card data, Personal Identifying Information (PII) and Protected Health Information (PHI).

• Publicly accessible systems expose businesses to data breaches and service disruptions.

• Relying on a single availability zone increases the risk of service downtime and reduced availability.

• Keeping unused or underutilized resources causes unnecessary expenses.

• Disabled monitoring and logging prevent the timely detection of suspicious activities, making identifying and responding to security incidents difficult.

• Granting unnecessary access permissions violates the least privilege principle, increasing the risk of unauthorized actions.

• Lack of proper backups leaves businesses vulnerable to data loss caused by hardware failures, cyberattacks (ransomware) or accidental deletions, jeopardizing continuity and compliance.

The above selection mostly describes the impact from a technical perspective. It’s equally important to consider broader risks that affect business operations, reputation and finances.

Operational inefficiencies can lead to reduced system performance or full system outages, directly impacting an organization’s ability to meet SLA commitments.

Public incidents can inflict significant reputational damage, reducing public trust and weakening brand value. This loss of trust decreases customer loyalty and discourages potential partnerships.

Financial risks are another critical concern. Inadequate change controls can cause costly outcomes like ransom demands to regain access to compromised data or systems. Regulatory non-compliance may also lead to significant penalties and fines. Service disruptions can directly reduce revenue and even a decline in stock market valuation.

A Case Study on the Impact of Poor Configuration Management

In December 2024, Volkswagen faced a major security breach due to poor configuration management in its AWS environment, leading to the unauthorized exposure of personal data for around 800,000 electric vehicle owners across brands like Volkswagen, Audi and Skoda. The breach violated GDPR and included sensitive information, such as lawmakers' daily movements, remaining accessible for months.

The leaked data raised serious concerns, allowing criminals to track owners near critical government sites like Germany’s foreign intelligence agency and the U.S. Air Force Base in Ramstein. This breach underscores the importance of strict configuration management and proactive measures to safeguard sensitive data, avoid legal repercussions and even cause national security risks.

Policy as Code: Enhancing Cloud Governance and Security

Modern software development demands that organizations rethink traditional governance and compliance strategies. Outdated methods reliant on lengthy manuals and manual reinforcement are insufficient. A common best practice is to prohibit public access to port 22 (SSH) on network firewalls. Manually verifying compliance requires painstakingly reviewing each network firewall’s inbound rules — one by one — via web consoles or CLI across all regions and cloud accounts. As organizations scale, this approach becomes inefficient, error-prone and unsustainable.

The solution? Automating configuration audits. By eliminating human error and creating repeatable, reliable processes, automation not only streamlines compliance but also strengthens overall security. It’s a smarter, faster and cost-effective way to stay ahead in an increasingly complex digital landscape.

Driving transformation begins with the adoption of policy as code. This approach follows the same principles as Infrastructure as Code (IaC), allowing organizations to define their documented policies in code form. Codified policies are used to assess alignment with desired configurations and, optionally, to enact automatic remediation.

Operated by widely used policy engines such as Cloud Custodian or OPA policy as code extends across critical domains, security enforcement, compliance management, cost optimization and operational excellence.

Effective compliance management through policy as code ensures that a cloud environment strictly adheres to organizational policies, reducing non-compliant assets and thus enhancing customer trust.

Policy as Code Modes

Misconfigurations must be managed both reactively — resolving issues after they arise — and proactively, preventing them before they occur. Taking a proactive approach is essential, as fixing issues later in the software development life cycle (SDLC) can cost up to 100 times more than addressing them early. Integrating PaC into infrastructure as code templates from the start can prevent vulnerabilities in planned changes, maintaining the integrity and security of your infrastructure. The "shift-left" approach integrates robust safeguards from the start, creating multiple layers of protection and reinforcing a proactive, innovative defense strategy.

By using the right approach, organizations can maximize the benefits of policy as code while ensuring strong security and compliance.

Policy as code can be applied in four main modes:

1. Proactive controls ensure resources are compliant before deployment by scanning infrastructure as code templates, such as AWS CloudFormation templates or Terraform configuration files, to detect compliance issues early on. This is the first line of defense to help prevent unwanted changes.

2. Preventative controls restrict actions by enforcing policies and preventing the deployment of non-compliant resources. For example, it can prohibit creating an AWS security group with unrestricted access (from IP 0.0.0.0/0) to a sensitive port (SSH) from the internet that exposes the instance to unauthorized access.

3. Detective controls identify policy violations and compliance drifts in deployed resources, often caused by manual changes or bypassed preventative measures. They're vital for assessing infrastructure in real time, detecting risks and ensuring security and compliance by promptly addressing deviations.

4. Responsive controls act on non-compliant resources by auto-remediating deviations from established security baselines.

Adhering to each control creates a more comprehensive governance strategy that covers the entire life cycle of resources.

Policy as Code Development Life Cycle

The rapid pace of cloud innovation and evolving APIs demands that policy as code is a continuous, iterative process rather than a one-time effort. Maintaining a reliable catalog of policies requires applying software development best practices to ensure they remain current, effective and adaptable.

Policies must be codified and stored in version control systems for change tracking and peer reviews. Automated testing — such as unit tests, static code analysis and integration tests within CI/CD pipelines — ensures policy reliability and compliance.

Key steps in developing policy as code:

1. Regulations Investigation: Identify critical points across regulation standards to design policies.

2. PaC Development: Create policies based on compliance requirements and include metadata such as descriptions, remediation steps and compliance mappings.

3. Testing: Validate policies using unit testing, static analysis, peer reviews and integration testing.

4. Policy Release: Publish policies in a centralized catalog for seamless access and deploy them into production once they meet quality standards.

5. Maintenance: Continuously update policies to reflect changes in compliance requirements, cloud APIs and policy engines.

With these practices, organizations can ensure policy as code evolves with business objectives, regulatory demands and emerging risks.

The Advantages of Policy as Code

Implementing policy as code solutions delivers clear, measurable advantages, elevating governance and compliance across cloud environments and platforms. These benefits can be categorized into three core areas:

1. Automation and Error Reduction

Enabling automated policy enforcement, eliminating manual processes and reducing human error. By integrating policy checks into CI/CD pipelines, organizations can automate security testing, ensuring vulnerabilities are identified and resolved early in the development life cycle. This approach enhances the consistency of compliance enforcement across all operations.

2. Consistency and Scalability

Promoting uniform governance practices throughout the various stages of development, from testing to production. Thanks to its structured design, it scales seamlessly, adapting to changes in operational needs, security demands and cost requirements. This scalability ensures governance standards are consistently upheld, even as the organization evolves and grows.

3. Security, Compliance and Efficiency

Implementing policy as code strengthens security operations by automating repetitive tasks and enabling security teams to prioritize strategic governance activities. This shift reduces manual oversight requirements and improves both operational efficiency and incident response effectiveness. This robust framework provides a strong foundation for future growth and facilitates easier adaptation to evolving threats and regulatory changes.

Key Trends in the Future of Cloud Security Threats

The future of cloud security will be shaped by several emerging trends that organizations need to closely monitor. Adapting to these evolving dynamics is essential to maintaining a secure cloud environment. Here are four major trends likely to influence cloud security in the years ahead:

1. Increased Attack Sophistication

Cybercriminals are evolving, leveraging AI to exploit vulnerabilities in cloud environments. These attacks are becoming increasingly targeted and harder to detect as AI algorithms bypass traditional security measures and adapt to specific environments. To counter these sophisticated threats, organizations must invest in AI-powered defenses, robust security testing, and advanced threat detection systems to proactively identify and mitigate risks.

2. Supply Chain Risk

As cloud ecosystems grow more complex, supply chain vulnerabilities are also expanding. A single breach within the supply chain can cascade across interconnected systems and services, leading to widespread compromise. To address this, organizations must extend their security strategies to include third-party vendors and partners, conduct regular audits and implement measures such as zero-trust architecture to minimize exposure to these risks.

3. Evolving Regulatory Landscape

Stricter data privacy and security regulations are on the horizon, pushing businesses to adapt their cloud security strategies. Non-compliance not only exposes organizations to legal penalties but also erodes customer trust. By staying ahead of regulatory changes and embedding compliance into governance frameworks, businesses can better protect sensitive data while adhering to evolving privacy standards. A strong emphasis on effective data management practices is crucial for maintaining compliance and safeguarding trust.

4. The Rise of Ransomware-as-a-Service (RaaS)

The rise of RaaS platforms is lowering the barrier for less-skilled cybercriminals to launch sophisticated ransomware attacks. This growing threat necessitates comprehensive backup and recovery solutions, as well as stringent access controls.

Strategies to Mitigate These Risks: 

• Cloud Native Security Tools: Adopt security tools designed specifically for cloud environments, offering greater visibility and control compared to traditional solutions.  

• Automation and Orchestration: Embrace automation to streamline security processes, enabling organizations to effectively manage large-scale cloud security challenges.  

• Security Awareness and Skills Training: The ongoing cybersecurity skills gap remains a critical challenge. Continuous workforce training and robust security awareness programs are essential to building the expertise needed to mitigate risks and protect organizational assets. 

By prioritizing these strategies, organizations can stay ahead of emerging threats and fortify their cloud security posture.

Improving Cloud Governance with EPAM Syndicate Rule Engine

Cloud governance across platforms like AWS, Azure, GCP, Kubernetes and OpenShift can be effectively strengthened with the flexible EPAM Syndicate Rule Engine. Featuring over 1,000 prebuilt policies and a structured software development life cycle, this powerful tool helps strengthen security, streamline cloud operations and ensure compliance with ease. 

Built on open-source technologies and supported by the Cloud Native Computing Foundation (CNCF), the EPAM Syndicate Rule Engine provides a robust foundation for policy management. It enables organizations to utilize ready-to-use policies based on industry best practices, ensuring alignment with evolving regulatory and operational demands.

EPAM is dedicated to driving expertise in cloud management alongside governance tooling. By integrating advanced tools like the Syndicate Rule Engine into cloud governance strategies, organizations can tackle security and compliance challenges head-on. This approach ensures they extract maximum value from their cloud investments with confidence and precision.