Summary Industrial internet‐of‐things (IIoT) cloud computing gives users with the ease of outsourcing calculations and carrying the risk of privacy disclosure. To solve this issue, secure high‐order clustering algorithm by fast search (SHOCFS) technique is introduced recently. The major factors of SHOCFS algorithm are speed improvement and detecting optimal density peaks. The optimal selection of density points in the SHOCFS algorithm still becomes an important issue to be considered. The swallow swarm optimization (SSO) is introduced in the proposed work for choosing optimal density peaks in clustering algorithm. This paper motivates to design a new secure cloud service system for cloud in IIoT environment. The secure high‐order optimal density selection (SHODS3O‐CFS) approach is proposed in hybrid cloud environment. The major contribution of the work is to develop an optimization‐based secure clustering algorithm for finding the best density points in clustering algorithm. It may reduce the overlapping peak points in the cluster and increase the security of system in hybrid cloud. The experimental results of the proposed algorithm and existing methods are measured via clustering metrics such as accuracy, clustering center quality, and speed ratio. The metrics like clustering center quality, Rand index (RI), encryption time (ms), and speedup ratio have been used to measure the results of the proposed system and existing methods. From the results, it is concluded that the proposed work has achieved higher average RI of 93.4%, which is 29.68% and 17.4% higher when compared with the privacy preservation high‐order clustering algorithm by fast search (PPHOCFS) and SHOCFS methods.