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Encryption Set to Go Mainstream

Study: Data breaches, new laws drive enterprises to build encryption into infrastructure, processes

SAN FRANCISCO -- RSA Conference -- Enterprises are about to stop asking when to encrypt their data and start doing it on a wholesale, platform-level basis.

That's the conclusion of a new study unveiled here this week by the Ponemon Institute LLC , a security and privacy research firm, and sponsored by PGP Corp.

About two thirds of large U.S. businesses currently have some sort of encryption strategy in place, and 16 percent of organizations have developed an enterprise-wide plan, according to the report.

"We've been researching encryption for years, and it hasn't ever reached this level of importance in enterprises before," says Larry "Eponymous" Ponemon. "Traditionally, enterprises have approached encryption in a piecemeal fashion, sort of applying it where they felt it was needed. This data suggests they're being a lot more strategic in their decisions."

Recent data breaches -- or, more specifically, new state laws mandating the disclosure of data breaches -- are the primary drivers behind the shift in strategic thinking, Ponemon says.

"Encryption's been around for years, but the security people who were most interested in it didn't have the authority to make the controls work across the enterprise," he observes. "Now there are laws, and there is a whole group of CEO and CXO-level people saying they don't want what happened to TJX Companies to happen to them. Instead of security going to the top executives, the top executives are coming to security and saying, 'What are we doing about this?' " (See More Thefts From TJX Breach.)

Encryption has become an "earmarked" item in enterprise budgets, along with database security and identity management, according to Ponemon's research. "That means that there's money specifically designated for encryption projects -- and the amount of money that's being earmarked is higher than ever."

Instead of encrypting in only a few specific areas, companies are increasing their use of encryption across multiple applications -- including email and backup -- as well as across hardware, including file servers, mobile devices, and laptop computers, according the study. Laptop encryption has grown the most in the past year, jumping from 10 percent of companies surveyed in 2006 to 18 percent this year.

Only 6 percent of companies routinely encrypted their backup data in 2006, and that number will jump to 11 percent this year. "I was surprised to see that backup encryption figures are still remarkably low," Ponemon says. "Encrypting backup media is so easy, and with several companies losing drives or tapes over the last year, you'd think more companies would be doing it."

Enterprises like the idea of building an encryption "platform," in which encryption technologies, processes, and interfaces would be common across applications, systems, and departments, the study says. Sixty-one percent of the survey's respondents viewed the idea of building an encryption platform as "important" or "very important."

That figure is good news for PGP, which underwrote the study. PGP recently began marketing the idea of building an encryption platform. "But we didn't slant the questions," says Ponemon. "We wanted to know their attitudes about this. If everybody had said it was a bad idea, we'd have reported that, too."

— Tim Wilson, Site Editor, Dark Reading

Tim Wilson is Editor in Chief and co-founder of Dark Reading.com, UBM Tech's online community for information security professionals. He is responsible for managing the site, assigning and editing content, and writing breaking news stories. Wilson has been recognized as one ... View Full Bio

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