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Implementing SSL in Java Based Web Applications

I have a java based web application developed in Amazon EC2. It is doing transactions of confidential information. I have a MySQL server installed all by my self in the same amazon instance. The web application access the database via localhost . In Security Groups , I have created a custom security where the port 8080 (the Tomcat ) can be accessed only via localhost .

Considering these, do I still need SSL to make sure the transactions are secured?

It depends. Are you comfortable with plain text inside the datacenter? Don't bother with SSL.

Are you worried about that traffic being sniffed locally (tcpdump) or from a malicious source ( for instance, if data was being rerouted from the switch between EC2 instances )? Use SSL.

There's a trend of large companies making sure to encrypt local traffic.

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