Hmm, for a customer of a cloud provider, this sort of thing will be very hard to defend against. Maybe if the customer service system had had two-factor security, this might have been avoided (i.e., customer service can access your account only if you read them your hardware token's code). Requiring SSL/SSH client certificates even for intranet accesses might have deterred this attack. I hope other cloud providers ta…
Actually not. Just use a loopback cypto FS to store the sensitive stuff. The reason they had to reboot the machine is that they just had access to the HDD where they could change the password, as opposed to having live root access.
If that's even the case here. We don't have much indication that the attacker couldn't have taken a snapshot of a running system (or that that will be how it happens next time).
So, sure, use a loopback crypto filesystem. It just doesn't provide much in the way of a security guarantee (but it adds some measurable costs).