Most U.S. organizations are currently encrypting data or are in the process of doing so, and the No. 1 driver for this is compliance.

A new study by the Ponemon Institute, commissioned by Symantec, found that 84 percent of nearly 1,000 U.S. organizations surveyed are using encryption or starting to, an increase of 2 percent from 2009 and 5 percent from 2008. Overall, most organizations have deployed file-server encryption (62 percent), full-disk encryption (59 percent), and database encryption (57 percent). Full-disk encryption was up 5 percent over last year and 15 percent since 2007.

But the big shift is in what's driving encryption: For the first time in the survey's five-year history, the respondents said their main reason for adopting encryption is regulatory compliance. Nearly 70 percent ranked this as the main driver, up from 64 percent last year and 44 percent in 2006. Those who attributed their encryption use to protecting against breaches dropped to 63 percent this year, down from 59 percent in 2008. The Ponemon report attributes this change to the acceptance of the significance of regulations, and says data breaches have become more a part of the IT security fabric.

"Despite the bellyaching about how bad compliance is and how hard it is to comply, it seems to be the main driver for encryption. This means that PCI, and expanded regulatory [rules] under HIPPA have made encryption more valuable than before," says Larry Ponemon, chairman and founder of the Ponemon Institute. "I think that's an important finding."

An important element here is that these regulations have teeth, with failure to comply with PCI leading to the inability to perform online credit card transactions, for instance, according to the report.

Some 88 percent of the respondents say their organizations had suffered at least one breach this year, an increase of 3 percent from 2009. Around 40 percent of them have had anywhere from two to five breaches this year, while 23 percent had experienced one. "The frequency of data breaches is increasing ... but that may be because organizations are better at detecting them," Ponemon says. "Data breaches are a common event [now]."

"Companies are starting to realize they can't completely control a data breach, but they can make it harder so they are making efforts to ensure [their] data is encrypted," he says.

Security purchases that come with encryption are getting the biggest increase in budget allocations. According to the report, earmarks for encryption solutions rose 9 percent over 2009 and 12 percent over 2008. Laptop and other endpoint encryption are up 10 percent since last year; key management jumped 9 percent this year over last, and 10 percent over 2008.

Symantec has seen similar trends among its customers. Brian Tokuyoshi, senior product marketing manager for Symantec, says his company sees customers including encryption as a line item in their budgets as well as part of another security project, such as extending their email security or data leakage prevention. "Typically, we would see an encryption project originate where the company last got hit. If they lost a USB drive, they start with UBS encryption. Now they are being more proactive," Tokuyoshi says.

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