By Phil Dunkelberger
January 31, 2008
One of the questions I'm frequently asked is, "If perimeter-based data
security strategies are breaking down, why aren't more companies using
encryption to protect their confidential information?"
Although I'm not sure I agree completely with the question's premise, I
believe what we're seeing has less to do with the role encryption will
play protecting confidential information than the rate at which
enterprises can really upgrade their core information infrastructure.
Encryption is not the kind of technology that can be "painted on" an
existing set of information technology assets. Achieving comprehensive
enterprise data protection requires a change in both policies and
technology at the architectural level, followed by deliberate deployment
everywhere sensitive information resides.
As one of my favorite chief information officers observed, "Rome wasn't
built in a day, and that was a far easier goal to accomplish."
What I've observed, particularly in the last year, is the growing
understanding by IT security professionals that Gen. Patton was correct
when he observed that "fixed embattlements are monuments to human
With the vast majority of mission-critical data now being created and
consumed on mobile devices outside most corporate security perimeters,
data security experts globally have realized that fixed data
embattlements are a necessary but insufficient component of a
comprehensive enterprise data protection strategy. These companies are
rethinking their security strategies, and the leading firms (primarily
in financial services and manufacturing) are implementing solutions that
assume there is no perimeter in the classic sense. Most if not all of
these new approaches involve broad deployment of various encryption
The Jericho Forum has been promoting this concept of
"de-perimeterization" for a number of years. What I'm seeing from the
largest PGP Corp. customers is a belief that security now must travel
with the data wherever it goes throughout the world. Because upgrading
the security policies and technology in a large enterprise takes time
and careful planning, however, this is not the type of trend that pops
out fully formed--like a YouTube or Facebook--but evolves over time to
address changing threat models.
The other phenomenon driving this trend is the growing understanding
that no institution is immune to the type of breach experienced by TJX
in early 2007, or even the massive breach the British Treasury
experienced in late November in which an employee burned extensive
personal information on 25 million British subjects onto two CDs and
dropped them in the mail--never to be seen again.
So although de-perimeterization and the assumption that all firms are
vulnerable are the current drivers for encryption adoption, there's a
third, less well-understood phenomenon I believe will become
increasingly important in the next two years: the hard dollar costs of a
TJX disclosed recently that it may spend $500 million mitigating the
effects of its breach. The most recent study by the Ponemon Institute,
which tracks the cost of breaches, estimates that each compromised
record costs an affected company $197, up 8 percent from 2006 and 43
percent from 2005. I expect both the number of breaches and the
cost-per-breach to increase in the short term as the profitability and
popularity of identity theft rise in the increasingly organized
international criminal community. This trend will, in turn, put
increasing pressure on public and private institutions to protect
sensitive data regardless of where it resides in the enterprise.
The final factor affecting the rate at which encryption technologies are
deployed is the knowledge that to protect all data in motion and at rest
in a large enterprise effectively, it isn't enough to deploy one point
solution for e-mail, one for laptops, a third for shared storage, and so
on. Most CIOs know from hard experience (and early public-key
infrastructure deployments) that a combination of such point solutions
usually leads to data that is actually less secure and/or less available
to those who need it.
Encryption by itself is not the answer, and the fact is that building or
deploying a simple, single application encryption technology just isn't
that hard. The magic of enterprise data protection occurs when it is
combined with a comprehensive data protection policy and key management
system, and encompasses all of an enterprise's business, compliance, and
Building systems that meet these criteria is hard and should be
undertaken only when implementers truly understand all of the
enterprise's threat models and have identified the most cost-effective,
Biography: Phil Dunkelberger is chief executive of security software
company PGP Corp.
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