A guide to practical encryption across the business

There is only one thing worse than realising that you have left your laptop in the back of a taxi. That is the recollection that you have not encrypted any of the data on it - including all of your contact information, your sensitive e-mails, all of your online passwords, and that spreadsheet full of customer names and addresses.

There is only one thing worse than realising that you have left your laptop in the back of a taxi. That is the recollection that you have not encrypted any of the data on it - including all of your contact information, your sensitive e-mails, all of your online passwords, and that spreadsheet full of customer names and addresses. That sort of situation spells trouble for your customers, your company and, ultimately, for you.

Unfortunately, this kind of thing happens more often than you would think, in both the public and private sectors. In January, the government faced a storm of criticism after a navy officer's laptop containing the details of 600,000 people was stolen. The data, including passport numbers, bank details and national insurance numbers, was unencrypted. In December, the DVLA lost discs en route to its headquarters in Swansea that contained unencrypted information on 6,000 drivers. Of course, the most serious event of all last year was the loss of 25 million personal data records by Her Majesty's Revenue & Customs - again, the data was stored unencrypted on CDs that were lost in the post.

For governments, such transgressions can be politically devastating, for private companies, they can be financially disastrous. Last February, the Nationwide Building Society was fined almost a million pounds by the Financial Services Authority following the theft of a laptop from an employee. The unencrypted data included details of almost 11 million customers.

Why, after 50-odd years of enterprise computing and with the PC nearing its 30th birthday, are we still not encrypting our storage media systematically? One reason could be that high-profile data breaches stemming from inadequate encryption have not traditionally come to light. Whatever the reason, we are still very poor at routine encryption of sensitive data. A 2007 study of UK encryption policies from the Ponemon Institute showed that 55% of companies had some type of encryption plan. That is a promising number, but only 9% adopted encryption at a strategic level and enforced it on an enterprise-wide basis. And yet in another Ponemon study, examining the cost of UK data breaches in 2007, it was found that 36% of all breaches were caused by lost or stolen laptops or other mobile storage devices. The average cost of data breaches in the UK last year was £47 per compromised record, the report said.

Much of the discussion around encryption in the press of late has concerned laptops and other mobile devices because of the high-profile nature of those data breaches. "You used to have to provide a financial argument for why you needed to do it," says Miles Clement, senior research consultant at the Information Security Forum, who argues that the awareness and practice of laptop encryption is growing. "But you do not need that financial argument any more, because the fines of the regulators are so large that the cost of implementation pales into insignificance."

Now, suppliers are starting to build encryption right into the operating system. Apple has included its FileVault system since version 10.3 of Mac OSX, which encrypts the users' home directory. Microsoft built BitLocker into certain editions of Vista, enabling Windows users to encrypt their hard drives, but competitors complain that it does not encrypt the whole of the disc, but only encrypts the primary volume. Lots of drives are partitioned into multiple volumes, and users will inevitably store their data on the unencrypted ones, warns Guy Bunker, who is responsible for technical strategies in the security and data management group at Symantec.

The other criticism of BitLocker, levelled by both Bunker and by McAfee's group product marketing manager for data protection, Chris Parkerson, is that Microsoft's technology is not manageable at an enterprise level. However, this can be mitigated using third-party products. For example, Ultimaco offers enterprise-level policy-based Bitlocker protection using its SafeGuard security management suite.

Symantec recently launched its own full disc encryption product called Symantec Endpoint Encryption. The product is available in two editions. One carries out full disc encryption on a Windows-based machine. The other is a removable storage edition, which encrypts data on everything from USB keys to CDs and DVDs.

A cacophony of disc encryption products now exist for laptops. In addition to Symantec's, McAfee offers its own Endpoint Encryption software (formerly called SafeBoot), and Check Point has one too. But the worry is that many of these products could be compromised should an underlying flaw be found in the design implementation.

Enter Ed Felten, renowned security researcher and anti-DRM advocate at Princeton University. Felten, in conjunction with the Electronic Frontier Foundation (EFF), says he has discovered a flaw in disc encryption technologies including BitLocker, FileVault and other systems such as TrueCrypt. The flaw lies in the fact that encryption keys are held in memory, and memory does not lose the data that it contains straight away when power is turned off. Felten's proposed attack exploits this idosyncracy, using a program to collect the contents of a computer's memory after it has been rebooted. Machines in sleep or hibernation mode are particularly susceptible to an attack based on this vulnerability, suggests the EFF.

"There are a couple of ways around this. Firstly, if you have a hard token containing the key, then the key is held in that token," says Bunker, arguing that if the key is never held in the laptop's Ram, it cannot be recovered later. "But if you are worried about an attack, then do not put the computer into sleep mode." Microsoft representatives have also pointed out that BitLocker can be married with a USB key, and that sleep mode can be prohibited on Vista clients. But perhaps the best solution would be for encryption product suppliers to write zeros to the parts of memory where the keys were stored when the machine goes to sleep, or use a hard token.

Using policy settings to avoid sleep mode (or to require a password to recover from it) could also solve some other problems with full disc encryption. A machine with its data fully encrypted sounds fine in theory, but if the machine is in sleep mode when it is stolen, and does not require a password for recovery, then the thief can act as a legitimate user and pilfer all the data he wants. This is why encryption firm Steganos advocates file and folder-level encryption. "We believe that file and folder-level encryption is a more competent solution because it takes that extra step," says CEO Aston Fallen. Files encrypted using the Steaganos product are not visible using the standard Explorer program, and must be decrypted using the Steganos interface to be accessed.

So, you have found an appropriate full disc encryption tool for your user base, are managing it properly across the company. Now, what about your datacentre? Do not think unencrypted information on your disc arrays is not a risk - thefts of equipment from datacentres are rife. In 2006, Easynet had equipment stolen from its London facility, and telecommunications carrier Verizon experienced a similar theft last December, according to reports. If unencrypted hard drives go missing from the server room, and they contain sensitive information, it could constitute a major security breach.

Encryption at the disc level has traditionally been a tough sell in the datacentre, says Parkerson. "It is a space management issue," he says, arguing that encryption algorithms will generally increase data sizes. "The algorithms are turning the text into ciphertext, and ciphertext by nature is larger in physical size than the original data. On average, depending on the type of data you are doing, it can be anything from 10% to 25% larger."

With the increasing amount of low-latency data being stored on server hard drives (audio and video need to be played back without any time lag), performance at the server level may also be an issue, unlike at the desktop and laptop end, where dual-core processors have largely solved that problem. With multiple users accessing drives, the problem calls for hardware-based rather than software-based encryption, Parkerson says.

Intel is preparing a technology called Danbury, reportedly due in the second half of this year, which will add hardware-based protection to the vPro platform targeted at desktop and laptop machines. Hardware encryption at the server level, however, is likely to happen within the disc drive itself. In October, Seagate joined with other enterprise storage players including IBM and LSI to develop an initiative for full disc encryption using ASICs embedded in disc drives. Key management is being standardised for interoperability purposes via the IEEE's 1619.3 specification.

That just leaves tape drives, and suppliers have been busy working in that area too. Given the common practice of transporting back-up tapes between physical locations using couriers, this is particularly important. The LTO Consortium - a group developed by IBM, HP and Quantum - developed an interoperability standard called LTO4, which includes encryption technology directly in compliant drives. However, legacy tape drives have a habit of sticking around. For users of older equipment, a bolt-on device may be necessary. nCipher, which makes its main revenue from hardware-based encryption key management systems, also sells CryptoStor, an appliance to encrypt data as it is written to tape, which it acquired along with the original developer, NeoScale. "We support the trend towards LTO4, but a lot of our customers still have legacy environments," says Richard Moulds, vice-president of marketing at nCipher.

With encryption becoming increasingly prevalent on the corporate radar, the suppliers that sell this equipment stand to make some healthy profits. As for the customers, they have little choice but to implement these systems if they want to protect their own data, and that of their customers. Done properly, encryption can choke off many data criminals' activities at the neck. What is the point of stealing data if you cannot read it?

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