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Passwords are a liability: cumbersome, insecure and easy to forget. Every seasoned administrator knows that Monday morning user-has-forgotten-password scenario.
Make public key infrastructure (PKI) part of your cloud security policies. PKI relies on a public and private key to verify the identity of a user before exchanging data. Switch the cloud environment to PKI, and password stealing becomes a nonissue. PKI also prevents brute force login attacks. Without the private key, no one will obtain access, barring a catastrophic PKI code failure.
While this might seem obvious, include a note on the cloud security checklist that the private key should not be stored on the computer or laptop in use. Investigate vendors, such as YubiKey, that provide secure key management. For some programs, the user has to touch the device. Cloud key management for multiple users is easier with these tools.
All the major public cloud providers offer a PKI. If you prefer to use your own keys, make sure they are kept safe with a good, secure password. That means if you lose the USB key/storage medium holding the key, you have a certain level of security that will give you time to replace the lost key.
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Source : http://searchitoperations.techtarget.com/tip/Six-simple-cloud-security-policies-you-need-to-know