Cloud Computing is just another delivery model for IT services. However, due to the specifics of cloud services like multi-tenancy and many others, requirements sometimes are even higher than for on-premise services. One of these requirements in well-architected IT environments and for well-architected applications is the ability to externalize security. That includes relying on external directories for administering and authenticating users, e.g. on Identity Providers. It might include the capability of "cloud provisioning", e.g. receiving changes of users - even while I clearly favor federation as loosely coupled approach over provisioning. It should include the support for external logs, event monitoring, and so on - unfortunately that appears to be a topic where noone is really working on.
And it should include the capability of managing authorizations in cloud services based on centrally (on-premise or using a cloud service - but centrally and not per cloud service!) managed policies. There is limited value in federating users and than doing all the administration work per cloud service using the cloud service's proprietary management GUIs or APIs. However, authorization is where the problem really starts.
There is a standard for distributed, dynamic authorization management out there: XACML, the eXtensible Access Control Markup Language. It allows to describe the rules. It allows to work with different repositories for identity information (PIPs, Policy Information Points) and other information required for authorizations, it provides interfaces to custom and standard applications, and so on. However, I haven't seen XACML in the cloud until now. Unfortunately, I also haven't seen any real alternative to XACML.
Some might claim that SAML might do that job. There is the SAML Authorization Decision Query as part of the SAML 2.0 standard. But that leads pretty quickly to SAML/XACML interoperability and things like the SAML 2.0 profile of XACML. In fact, if it is about having a consistent set of policies expressed in a common standard, XACML is what we need. We need to define and manage these policies consistently per organization, not per service. Services should request authorization decisions - at least in an ideal world. However, when looking at the cloud, there comes another aspect into play: Performance. Performance is a general issue when externalizing authorization decisions. For cloud services which have to ask many different authorization "engines", it is an even bigger issue. And there is the issue of latency, which is a factor in cloud environments due to the geographical distances you might find there.
Thus, while XACML is fine for defining policies, the interesting question is: Should cloud services ask external authorization engines per authorization decision? Or is it the better way to update the relevant XACML policies at the cloud service and do authorization decisions there? However, then we will still need a way for efficiently accessing the PIPs for other attributes required to perform the authorization decision.
I don't have the full answer. However I'm convinced that XACML is a key element for authorization in the cloud, given that it is the standard for externalizing authorization decisions. But it might need some enhancements to optimally work for cloud security as well. It definitely will need improved security architectures for cloud services themselves to externalize authorization decisions and to rely on centrally managed policies. And it definitely needs some thinking about the overall security architecture for cloud services. So I'm looking forward to comments on this post - maybe I've missed something and everything is there; maybe this initiates some enhancements to standards. I don't know but I'm really curious.