The valuable transformation of organizations that adopt cloud computing is indisputably accompanied by a number of security threats that should be considered. In this paper, we outline significant security challenges presented when migrating to a cloud environment and propose PaaSword-a novel holistic, data privacy and security by design, framework that aspires to alleviate them. The envisaged framework intends to maximize and fortify the trust of individual, professional and corporate users to cloud services. Specifically, PaaSword involves a context-aware security model, the necessary policies enforcement and governance mechanisms along with a physical distribution, encryption and query middleware, aimed at facilitating the implementation of secure and transparent cloud-based applications.