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What poses the most significant risk to Company XYZ's cloud-hosted systems?

  1. Data encryption issues

  2. Poor DNS server configuration

  3. Outdated software running on servers

  4. Inadequate employee training

The correct answer is: Outdated software running on servers

The most significant risk to Company XYZ's cloud-hosted systems is outdated software running on servers. When software is not regularly updated, it can expose systems to known vulnerabilities that attackers can exploit. Software vendors regularly release updates to patch security flaws, enhance features, and improve performance. If Company XYZ's servers are running outdated versions of software, they may lack critical security patches, making them attractive targets for attackers who look for easy access points to exploit. In a cloud environment, where systems are often accessible from various locations, the risk is amplified. Attackers can use automated tools to scan for vulnerabilities in software, and if an organization does not keep its software up to date, it increases the likelihood of a successful attack. This could lead to data breaches, loss of sensitive information, and financial damage to the company. While other factors like data encryption issues, poor DNS server configuration, and inadequate employee training can indeed pose risks, outdated software is often a direct entry point for adversaries, making it a critical area that requires consistent attention and management to mitigate potential threats effectively.