Say I have a few EC2 instances in an AWS VPC network, each assigned its own private address for the subnet at creation. Say one of them is a DB, and another one some kind of web app talking to the DB. The DB makes sure to authorize only a certain segment of IPs on that subnet.
How critical is it that the communication within this subnetwork is encrypted with SSL? If eavesdropping occurs then you should be able to see the password get transmitted over cleartext.
Assuming, for the sake of argument, that there aren't exploits in AWS, how possible is it to either eavesdrop on the communication to the database instance, or to even MITM it?
When you run your own physical datacenter, you can be relatively confident that your data won't be snooped on internally, but how does cloud hosting alter this approach? I imagine the trust levels are a lot lower.