Questions and Answers on Encryption and Key Management Projects

VMware® is hands-down the virtualization choice of large and small organizations, and it is easy to see why. Not only is it a highly reliable and scalable platform, VMware also provides a complete set of tools you need to deploy, manage, monitor, and protect virtual machines.

Earlier this month, Paul Taylor with Security Insider - Podcast Edition spoke with our founder, Patrick Townsend about encrypting data on Microsoft SQL Server in VMware environments, steps to encrypting data on SQL Server (with and without TDE), as well as talk about Townsend Security’s Alliance Key Manager for VMware. Here are a few highlights (download the podcast for the whole conversation):

Paul Taylor: We’ve talked about the Townsend Security encryption and key management solutions for VMware. Today let’s put the focus on Microsoft SQL Server and encryption in the VMware customer environment. Can you give us an overview of how VMware customers can protect data in SQL Server databases?

Patrick Townsend: Just to recap, we really need two things to get encryption right: A key management solution to protect the critical encryption keys, and an encryption solution for the SQL Server database. And they have to talk to each other.

For the first part, our Alliance Key Manager for VMware solution provides a fully functional, enterprise key management solution that protects SQL Server databases as well as other databases and other operating systems.

For encrypting SQL Server, our Alliance Key Manager solution comes with a full Microsoft SQL Server Extensible Key Management Provider. We call this Key Connection for SQL Server and it is one of the modules that our key management customers receive without paying additional license fees. Key Connection for SQL Server provides the encryption and integration with our key server to provide a complete, end-to-end solution for encrypting data in the SQL Server database.

Paul Taylor: Can you talk a little about how Microsoft enables encryption in SQL Server?

Patrick Townsend: If you are running SQL Server Enterprise Edition or higher, you have access to Microsoft’s automatic, full database encryption facility called Transparent Data Encryption, or TDE. You also have access to Microsoft’s automatic, column level encryption facility which Microsoft calls Cell Level Encryption. Both of these options, TDE and Cell Level Encryption,  are implemented without any programming work at all. And both are fully supported by Alliance Key Manager and the Key Connection for SQL Server software from Townsend Security.

Paul Taylor: What about Microsoft customers who aren’t using the Enterprise Edition of SQL Server? Can they encrypt their data with the Townsend Security solution?

Patrick Townsend:  With SQL Server Standard and Web Editions we provide two paths to encrypt data. The first is to use SQL Views and Triggers along with our .NET DLL to provide automatic encryption without any changes to applications. And the second path is to modify your C# or Java applications to use our .NET DLL to perform encryption at the application level.

Both approaches leverage our Microsoft .NET DLLs to perform encryption with integrated key management. Both are very simple to implement. And there are no additional license fees to deploy and use our Microsoft .NET DLLs to accomplish this.

Paul Taylor: So, walk me through the steps for encrypting data in my SQL Server Enterprise Edition database. How difficult is it?

Patrick Townsend: Encrypting data in Enterprise SQL Server is really very easy. The first step is to install our Alliance Key Manager for VMware solution. It launches like any other virtual machine using the normal VMware applications and you can have a key management solution up and running very quickly.

The second step is to install the Key Connection for SQL Server application on the virtual machine running SQL Server in Windows. This is a normal install process with an MSI file. You answer some questions, install a certificate and private key in the Windows Certificate Store, and run a handful of commands to start SQL Server TDE encryption or Cell Level Encryption. You also restart the log file to be sure that it is encrypted as well. That’s about it.

Of course, you will want to follow the instructions on how to set up a high availability key server, and point your Key Connection for SQL Server configuration to it as failover. That is a normal configuration process and also very easy to do. We find that VMware customers can deploy SQL Server encryption very quickly.

Paul and Patrick also cover which versions of SQL Server are supported, the availability of Alliance Key Manager in other platforms (hint: it’s quite versatile), and our 30-day evaluation program (you can do a full proof-of-concept in your own environment at no charge). Be sure to download the podcast to hear the rest of their conversation:

Questions and Answers on VMware Encryption Projects

Every business is trying to save money and reduce complexity in their IT departments, and many are accomplishing this today by using virtual machines such as VMware®. While these businesses’ infrastructures are becoming virtual, their security threats are still very much real.

Recently Paul Taylor with Security Insider - Podcast Edition spoke with our founder, Patrick Townsend about encrypting data in VMware, encryption performance, and special encryption and key management concerns for VMware users.  Here are a few highlights (download the podcast for the whole conversation):

Paul Taylor: As VMware customers start to work on encryption projects to protect sensitive data, what are the things they worry about? What concerns them?

Patrick Townsend: VMware customers have made a large investment in VMware technologies. This includes, but is not limited to, an investment in the VMware solution stack that lets them run a variety of virtual machines; administer those machines, monitor the health of the virtual environment, and secure the entire infrastructure of virtual machines and VMware itself.

VMware customers also have invested heavily in the talent needed to run a VMware data center, have adopted governance and risk management procedures specific to a VMware environment, and have invested heavily in migrating existing applications to this platform. It’s a large investment but the payoffs are substantial.

So, when approaching an encryption project the VMware customer really wants to deploy products and solutions that run naturally in VMware. It is painful and concerning to have to deploy solutions that don’t fit naturally.

Paul Taylor: I know that Townsend Security has encryption and key management solutions for VMware customers. Can you talk a little about those?

Patrick Townsend: For any encryption project there are really two major components:

1. The encryption of the sensitive data, usually in a Windows or Linux virtual machine
2. The protection of the encryption keys

An effective strategy in the VMware environment has to address both of these. I think we are doing this very well with our encryption solutions for VMware.

First, our Alliance Key Manager for VMware product provides for the creation, management, and protection of encryption keys in a VMware virtual machine. It runs the same FIPS 140-2 compliant key management solution that we offer in our Hardware Security Modules (HSMs). So VMware customers can get encryption key management right without having to go outside of their VMware infrastructure.

Second, all of our encryption solutions that are deployed to protect sensitive data run in the VMware platform and talk to our key manager. For example, you can deploy our SQL Server Transparent Data Encryption solution for automatic SQL Server encryption in a Windows Server virtual machine, and it will talk naturally to our key management server also running in a VMware virtual machine. It’s a perfect match for the VMware customer.

Paul Taylor:  Encryption has a reputation for being the hardest part of security. How do you address that concern?

Patrick Townsend: Yes, you are certainly right about encryption having a reputation for being hard and expensive to deploy. However, things are really different today. I’ll give you a couple of examples:

First, our VMware key management solution will soon be released as a ready-to-use key manager. This means that the first time you boot our Alliance Key Manager For VMware solution it will ask you a few questions, create a complete configuration for the key manager, and start the service. You literally have a functioning key server in a few seconds. What 5 years ago required multiple engineers and weeks of installation and configuration now gets done in a blink.

Secondly, our client-side encryption applications and SDKs are also designed for rapid deployment. For example, SQL Server Transparent Data Encryption also deploys through a standard Windows install process. Again, you answer a few questions, install credentials into the Windows Certificate store, run a handful of SQL Server commands, and you are fully protected with encryption. It is incredibly easy.

Paul Taylor:  I think everyone worries about performance when you talk about encryption. How well do your encryption solutions perform in VMware?

Patrick Townsend: Performance impacts are a natural thing to worry about. Encryption is a CPU intensive task, and it will have some effect on your application or database. Fortunately modern encryption libraries are very efficient and the impact is usually very modest. Back to our example about SQL Server TDE encryption, the average customer will experience about a 2% to 4% impact when activating TDE encryption. This is very manageable. Large SQL Server databases can pose a performance issue with TDE which is why we also support Cell Level encryption with SQL Server.

We always encourage our customers to try our encryption solutions before they make a full commitment. We make it very easy to do a proof-of-concept project with encryption. Our free evaluations let you take it for a spin and evaluate the impacts yourself.

Paul and Patrick also cover topics on high availability, business recovery, and compliance regulation concerns for protecting data in a VMware environment.  Be sure to download the podcast to hear the rest of their conversation:

Understanding PCI Merchant Levels and how an assessment can help your business

If your business takes credit cards for payment, then you are subject to the Payment Card Industry – Data Security Standards (PCI-DSS).

Companies of all sizes must comply with PCI DSS to ensure that their customers' data is protected during the processing and transmission of credit or debit card transactions and securely stored within any internal databases. PCI categorizes businesses into different classification levels based on the number of transactions and dollar amounts they processes each year.

Level 1 – All merchants processing more than 6 million card transactions annually

Level 2 – All merchants processing between 1 million and 6 million card transactions annually

Level 3 – All merchants processing between 20,000 and 1 million card-not-present only transactions annually

Level 4 – All other merchants

Level 1 companies are most likely well versed in the annual PCI audit process as they have a certified onsite audit annually with a Qualified Security Assessor (QSA). Level 2, 3, 4 merchants are not required to hire an onsite QSA, but can have a certified Internal Security Assessor (ISA) do the PCI self assessment annually. However, a small business preparing a self-assessment to participate in their first PCI review may find it a little daunting. If you're feeling that the PCI assessment process is overwhelming and complicated, understanding this process may be the first step toward putting your mind at ease. If you are a Level 1 merchant, the PCI assessment is a process carried out by a QSA to establish whether or not a business is compliant with security standards relating to the processing of transactions made via a credit or debit card (payment card). PCI compliance assesses your business point of sale system, payment applications, and all interconnecting systems with these goals in mind: (1) to examine your system, (2) to identify vulnerabilities, and (3) to prevent data from being compromised.

It’s not a matter of “IF”, but “WHEN”

If you have already suffered a data breach, working closely to review your assessment and put data security best practices into place will provide you with a roadmap to help avoid future losses. If you have not yet been breached, undergoing an assessment and reviewing your risk tolerance can still be stressful. Understanding the process may alleviate some of that stress and help you to maximize your use of the information in the PCI DSS assessment report

How can a PCI audit help my business?

PCI compliance auditing helps businesses to ensure they are providing the most secure environment for their customers to process payments and ensures that transactions are less likely to result in a compromise in the customers' data.

Ensuring that you meet PCI compliance and have a solid infrastructure for managing data security will increase customer confidence in your business and ensure that you're not exposed to security breaches that could have been avoided. 

To learn more about meeting PCI compliance requirements, download the whitepaper Meet the Challenges of PCI Compliance and find the answers to the following questions (and more):

• What will my auditor look for?

• How can I ensure my customers' data is secure?
• What is the difference between tokenization and encryption?
• What is encryption key management and why are auditors looking at this?

Because Hackers Don’t Take a Holiday

Companies earn my loyalty when I know they are looking out for and protecting their customers! So yes, I am truly thankful every day for data security and the encryption & key management solutions that help protect our personal information.

Michelle – Marketing

I’m grateful for all the amazing blessings I receive on a daily basis.  I have a loving and healthy family, dear friends, creative and witty co-workers.  I also get to work for a company that is truly focused on doing good in the world, our community, and here in the office too.   

Robbi – Administration 

I am thankful everyday I wake up and have the gift of another day to spend with my family, friends and doing the things I love.

Ken ~ Marketing

I am thankful for my girls!  (the day we adopted our daughter and became a forever family)

Jim – Development

I am thankful for my family and friends.

Victor – Partner Operations

I am thankful for a happy and healthy family.

David –Support

I’m thankful for biosynthetic insulin!

Shayna – Sales

I am thankful for my family who has always challenged me to be the best version of me.  I am thankful for the family I call my coworkers for always believing in my abilities.  I am thankful for my fiance for always making me feel safe and making me laugh.  I am thankful for my dog Barkley who has brought me pure joy and happiness and my new puppy Lenny who we are getting for Christmas!

Sandra – Administration

I am thankful for our family cabin and the joy that it brings.

Robbn – Support

This is exactly what I am thankful for…  3 of my favorite people!

Tim – Development

I am thankful there’s always more!

James – Sales

I am grateful for my wife and daughter's love.

Luke – Marketing

I am thankful for an awesome, musical family and being able to work with an awesome company that is helping keep your and my personal information safe.

Carol – Administration

I am thankful for my family, and for working at a place where everyone feels like family!

Victoria – Support

I'm thankful for Starbucks hot chocolate.  

Katie – Administration

I’m always thankful for family, friends and community!

Paul – Development

I'm thankful for the way the universe has brought me together with my father, he is 97 and an irascible old guy. But he has an unbounding love for life and an enthusiasm that is fantastic. Unfortunately his zest for living exceeds his physical abilities but to see his love for the moment is wonderful.

Patrick – CEO

I am thankful for my wonderful family, my tolerant and forgiving friends, and for the great community of employees and partners who make Townsend Security successful. Best holiday wishes to them all!

Being surrounded by loved ones, mashed potatoes, turkey, gravy, and pies has become the annual setting where Americans express their thanks each November.  Instead of bottling up all that gratitude to be released on one day, let’s take time throughout the year to show our thanks, express our gratitude, and share with others!  

“Not what we say about our blessings, but how we use them, is the true measure of our thanksgiving.” ― W.T. Purkiser

More Questions from the Tradeshow Floor (Part 2)

In our last blog we touched on a few of the questions asked at events we attended in November.  There were so many great conversations that I’ve decided to share a few more!

With the various platforms that I can deploy an encryption key manager in, how do I know which one is right for me?

There are several factors that will come in to play when deciding where you deploy your key management:

• Compliance regulations that you need to meet can be a factor in whether you deploy an Hardware Security Module (HSM) or a cloud HSM or a virtualized instance. If you are working with an auditor or going through a QSA audit, you'll want to have a conversation with them to understand their expectation from a compliance point of view around where you deploy your encryption key manager.
• Risk tolerance will also come into play. You may have a security group within your organization with strong feelings about how to deploy encryption key management and how to mitigate risk. If you have large amounts of sensitive data to protect you might decide to deploy an HSM in your secure data center. If you're dealing with a very small amount of data and you do not process credit cards or personally identifiable information, your risk assessment may indicate a cloud deployment.
• Budget is certainly always a factor to consider. It is important to consider the cost benefits of security however, we all understand that leaving our data in the clear is no longer an option. It is a matter of understanding your industry regulations and risk assessment, then deciding what encryption and key management to deploy.

While they are generally the most secure solution, Hardware Security Modules (HSMs) can be more expensive than a virtual environment, dedicated cloud instance, or virtual private cloud. Once you look at all the factors that affect your company, we will be there with the right solution that will work for your needs.

Tell me more about all these different options you have for the Alliance Key Management Solution… are they all going to help me meet compliance requirements?

There are still our original hardware security modules (HSMs) and now there are new options for deployment of cloud-based HSMs, virtual appliances (VMware), and true cloud instances of encryption and key management in AWS and Microsoft Azure.

• Hardware Security Module (HSM) is a physical appliance or security device that is protected and tamper evident. Built for high resiliency and redundancy it has hot swappable rated disc drives, dual power supplies, dual network interfaces, and is deployed in your IT data center.
• Cloud HSM is a physical appliance hosted in a secure cloud with real-time encryption key and access policy mirroring.  Dedicated HSMs are hosted in geographically dispersed data centers under an ITIL-based control environment and are independently validated for compliance against PCI DSS and SOC frameworks. No access is available to the cloud vendor or any unauthorized user.
• Virtual Appliances are the exact same key management solution - the same binary software that runs inside the hardware HSM - available as a VMware instance.
• In the Cloud - If you're running on Microsoft Windows Azure, vCloud, or in Amazon Web Services (AWS),the encryption key manager can run as a true cloud instance in a standard cloud or deploy in a virtual private cloud for added data protection for sensitive applications.

Because encryption and key management is so important, we offer all of the options listed above as NIST and FIPS 140-2 compliant solutions.

How is Alliance Key Manager Priced?

We have a wide set of options for our customers, and are dedicated to helping find affordable solutions. We have perpetual license or subscription options for classic HSMs, Cloud HSM, and virtualized environments. Our cloud offerings are true usage-based subscriptions, so if you're used to deploying in Amazon Web Services or Windows Azure, our encryption & key management solutions will fit that same strategy for pricing.  

We really believe that the encryption should go everywhere you need it to go! Your key management should work across a wide set of application environments, and it must be affordable, so that we can all get where we need to be in terms of protecting sensitive data. Regardless of where your data is or what platform you are using, there's a key management solution that can work for you!

How can Encryption and Key Management improve my bottom line?

Whether you choose a designated hardware security module (HSM), something designed specifically for virtualized environments (VMware), or data storage in the cloud, encryption and key management solutions can help you:

• Gain competitive advantage and build loyalty by protecting your customers data against access by unauthorized users
• Reduce hardware costs by leveraging virtual environments in the cloud
• Significantly improve your data security strategy while satisfying data compliance and privacy requirements

Overall, data encryption offers many benefits and provides solid protection against potential threats or theft. In addition to the many benefits, encryption is also efficient, easy to use, and affordable!

What sets Townsend Security apart from other key management vendors?

We want to protect data and make sure encryption is available everywhere you need it, so at Townsend Security we have a very different philosophy and approach:

• We think that when you buy an encryption key manager, you should be able to easily deploy the solution, get all your encryption projects done properly, and have very affordable and predictable costs.
• We understand that we live in a world where budget matters to our customers, so we do not charge client-side fees.  
• We know that IT resources are limited and have done a huge amount of work to make our solutions easy with out-of-the-box integrations, simplified deployments, and also provide along with our solution ready-made client-side applications, encryption libraries, source code samples, as well as SDKs for developers who need them to get their projects done very quickly.

Want to learn more about how to properly secure your data and protect your business against a data breach? Download our eBook “The Encryption Guide”:

Questions from the Tradeshow Floor  (Part 1)

November was a very busy month for tradeshows, conferences, and speaking engagements for the team at Townsend Security.  We love getting out to meet our current and potential customers and other than “giant Tetris”, our favorite things are the great questions we get asked at events. 

What if I lose an encryption key?

While the fear of losing a key is legitimate, the keystone of a successful encryption solution is encryption key management, which is the primary solution for managing, storing, and most importantly, protecting encryption keys. Unlike a “key storage” solution, a cryptographic encryption key manager is typically a NIST FIPS 140-2 compliant hardware security module (HSM) or virtual machine in the cloud that manages key storage, creation, deletion, retrieval, rotation, and archival. Many key management solutions are also produced in pairs, with one located in a different geographical location for high availability. If doing encryption key management right, you will never lose an encryption key.

Is there more to encryption key management than just storing my encryption keys?

There is far more to encryption key management than just storing the encryption key somewhere. Generally, a key storage device only provides storage of the encryption key, and you need to create the key elsewhere. Also, just storing your encryption keys “somewhere” doesn’t work very well for compliance regulations. With an encryption key manager, there is a whole set of management capabilities and a suite of functions that provide dual control, creates separation of duties, implements two factor authentication, generates system logs, and performs audit activities, along with managing the key life cycle. Beyond storing the encryption key, a cryptographic key manager manages the entire key life cycle. Some of the most important functions the key management administrator performs are the actual creation and management of the encryption keys. The keys are generated and stored securely and then go through the full cycle to become active, go into use, expire, retire (post-activation), and then be backed up in escrow, and then deleted (the “destruction” phase).  There is a very real need, and very specific compliance regulations & guidelines that require you to store and manage your encryption keys away from the data that they protect.

How easy is securing and protecting sensitive data on SharePoint?

The path to implementing encryption and key management for SharePoint is one of the most straightforward and easy paths. Townsend Security’s Alliance Encryption Key Management solution fully supports automatic encryption in SQL Server and integrates with ease.  SQL Server Enterprise and higher editions (starting with 2008) fully implement extensible key management (EKM) and encryption to protect data. Installing encryption on that platform is the first step. Administrators can then leverage the automatic encryption capabilities of SQL Server with only a few commands and no application changes.

What impact does encryption have on SQL Server performance?

Encryption will always be a CPU intensive task and there will be some performance impact due to extra processing power needed for encryption and decryption. However, the Microsoft encryption libraries as well as the .NET environment are highly optimized for performance. We have always seen very good performance on SQL Server and the native encryption capabilities that it provides. Microsoft reports that Transparent Data Encryption (TDE) on SQL Server may cost you 2-4% penalty in performance, and our own tests show similar results that fall on the 2% end of things.

Is there any limit to the number of servers that I can hook up to your encryption key manager?

There are no restrictions, and no license constraints on our encryption & key management solution. We don't meter or count the number of client-side platforms that connect to our Alliance Key Manager, so you can hook up as many client side applications, servers, and processors as you need to. This is one of the things I think is different about how we approach encryption and key management with our customers. We also know the applications you are running today may not be the applications you need to be running tomorrow and we really want you to deploy encryption to all your sensitive data and scale up when & where you need it.

I am collecting data in Drupal. What data do I need to encrypt?

Organizations starting an encryption project always have this question on their minds. It is a simple question, but can be hard to answer. Generally speaking, you should encrypt any information that alone, or when combined with other information, can identify a unique, individual person. This is called Personally Identifying Information, or PII. This should be your starting point, but you may need to address other information depending on the compliance regulations you must meet.

• PCI Data Security Standard (PCI DSS) applies to anyone, public or private, who take credit cards for payment. Primary account numbers (PAN) are specifically addressed.
• HIPAA/HITECH Act requires the medical segment (and any business associate) provide data protection for protected health information (PHI) of patients. 

• GLBA/FFIEC applies to the financial industry (bank, credit union, trading organization, credit reporting agency) for protecting all sensitive consumer information. 

• Sarbanes-Oxley (SOX) applies to public traded companies for sensitive data of personally identifiable information (PII).


In addition to these compliance regulations, the Cloud Security Alliance (CSA) has created the Cloud Controls Matrix (CCM) specifically designed to provide fundamental security principles to guide cloud vendors and to assist prospective cloud customers in assessing the overall security risk of a cloud provider.

We encourage all developers to check out Townsend Security’s Developer Program, it allows developers to design strong and secure applications from the ground up using NIST compliant AES encryption and FIPS 140-2 compliant encryption key management.

Taking Security Beyond Usernames and Passwords

Security professionals understand that passwords alone are just not good enough protection, and the on-going flood of data breach reports just confirms this on a daily basis. Enterprise IBM i users aren’t going to stop using passwords to login to their IBM i platforms, and hackers aren’t going to slow the flood of attacks any time soon. But now, we can take a giant security step forward by implementing two-factor authentication (2FA) to dramatically reduce the risk of a security breach.

Compromised email, social media, online gaming, ecommerce, financial services and other types of cracked accounts continue to threaten both personal and corporate interests. Out of all the threats that face individuals and companies, account compromise stands out as one of the most easily addressed with available and mature security technologies.

Historically, companies used physical tokens to provide authentication on the IBM i beyond username and password. Even if someone hacked a user’s password, they still could not login without the physical token. Tokens represent another layer of protection, which is a step in the right direction. Unfortunately, tokens increasingly do not make fiscal sense for Enterprise IT departments who have to deploy, manage, and troubleshoot large numbers of tokens. There is a better way for organizations to quickly and cost-effectively roll out two-factor authentication to a large and sometimes global user base. Solutions that leverage the mobile phone as a reliable means of authentication have become readily available for the IBM i platform. For example, instead of tokens, businesses can simply send an SMS or voice message that contains a one-time authentication code to the individual user’s phone. This means cyber criminals cannot log into the IBM i without physical control of the actual phone.

Mobile phones and landlines present key advantages for verification and authentication regimes:

• They possess unique identifiers – phone numbers, electronic identifiers and account numbers
• They remain in the possession of users or near at hand most of the time
• They are difficult to spoof
• If stolen or otherwise misappropriated, they are easy to disable
• Their association with actual individuals is verifiable through the operators that provide phone service

While none of these attributes alone are sufficient, together they provide a compelling basis for verification and authentication. The goal is to reduce fraud and actual theft of sensitive information by implementing something much harder to defeat than a login password. Combining something the person knows with something they have, or something they are, which can then be used for two factor authentication.

1. Something you know - a password. Even “strong” passwords can still be fairly weak from an attacker's point of view. With malware that easily detects them, passwords alone are a weak defense in relation to log-in security if that's all you have.

2.  Something you have - a mobile phone. It is now becoming quite common for companies to leverage what everyone already has in the way of the mobile phone or standard phone, and use that device as a mechanism for two factor authentication.

3. Something you are – biometric authentication options.  Physically scanning for an iris pattern or fingerprint.

By using 2 of those 3 things you can authenticate more securely to the system.

Here are a couple examples of things that are not two factor authentication:

• Requiring two passwords: using one factor twice is not 2FA!
• Using shield questions of which are actually fairly easy in our social world to determine.

The IBM i platform has a well-earned reputation for security, but security is only as strong as the weakest point in the enterprise network. User PCs, internal and external web servers, and network applications represent points of attack. These systems are not safe from:

• Memory scraping
• Keyboard logging
• Stolen vendor credentials
• Stolen user passwords from external web services

Due to the nature and the extent of these security threats on the IBM i, two factor authentication has become a viable solution for meeting compliance regulations and safeguarding the vast amount of data and numbers of users with access to sensitive information on the IBM i. We're seeing Google, Facebook, Yahoo, and almost all large commercial banking websites implementing a two factor authentication system based on SMS text and or voice verification to give additional security to their users accounts and IBM i users now have an affordable solution for their platform. Find out more by downloading this white paper:

It’s not just “Target”… everyone has a bullseye painted on their information!

Forget about vampires, werewolves, and other things that go bump in the night.  If you want to be truly frightened this Halloween, just take a look at some of the 395 data breaches reported in the first half of 2014 alone.

According to the Identity Theft Resource Center there has been a 21% increase in breaches (and that is just the ones that have already been reported to regulators) in the same period as last year.  Some of these you may be familiar with, others might surprise you:

• eBay - online retailer
  The breach is thought to have affected the majority of the 145 million members when a database containing customer names, encrypted passwords, email addresses, physical address, phone numbers, and dates of birth was compromised.
• Home Depot
  In a large nationwide malware attack, 56 million card records were stolen through point-of-sale systems. In a second attack in Atlanta, 20,000 employees personal information was stolen and used to open fraudulent credit cards by 3 human resource employees.
• Michaels Stores - craft stores nationwide
  The point-of-sale (POS) systems at 54 stores were attacked using malware and up to 3 million payment card numbers and expiration dates were obtained.
• Snapchat (online photo app and delivery service)
  4.6 million accounts were hacked and millions of images stolen. The information (phone numbers and user names) database posted online at Reddit and another site that has now been taken down.
• Neiman Marcus (retailer)
  1.1 million payment cards were compromised over a period of 8 months as hackers repeatedly breached the point-of-sale systems through a central processing server.
• AIG (American International Group)
  774,723 customers - The insurance provider confirmed the theft of a file server and two laptops that held personal information was by a former financial adviser.

Those are some pretty significant numbers, and most likely everyone that reads this blog has been affected in some way by at least one of these events. What we all need to remember is that cyber crime isn’t limited to “Black Hat” hackers that only go after the big piles of data.  Sometimes it is a disgruntled employee that destroys or releases sensitive data. Sometimes it is an unintentional employee error, or loss of an employee’s laptop/thumbdrive that thieves go after.  Often it is the smaller company or mid-sized Enterprise that hasn’t yet implemented security steps, like encryption and authentication, to protect their sensitive information.  

If the first list didn’t give you a fright, here is another that might make you tremble with fear. However, we would prefer if it resulted in the topic of data security brought up at your next security and risk management meeting!

University of Maryland
307,079 individuals - personal records
*Hackers broke in twice and stole data

North Dakota University
291,465 student and staff records

Sutherland Healthcare Solutions
168,000 patients
*Stolen computer equipment containing personal health & billing information

Sally Beauty Holdings (retailer)
25,000 customers lost credit card data to a hacker

Catholic Church - Archdiocese of Seattle
90,000 employees and volunteers - database records

Goodwill Industries (charitable resale)
868,000 customers from approximately 330 stores

Jimmy John’s (national sandwich shop)
*undisclosed number of customers from 216 corporate and franchised locations

Internal Revenue Service (IRS)
20,000 individuals affected
*Employee incident - loaded an unsecure drive into insecure home network

Assisted Living Concepts
43,600 current and former employees in 20 states, had their payroll files breached when the vendor’s system was hacked.

Coco-Cola
74,000 people lost unencrypted personal information to a former employee from Atlanta who stole 55 laptops. Company policy requires laptops to be encrypted, but they weren’t.

The Montana Department of Public Health and Human Services
A server holding names, addresses, dates of birth, and Social Security numbers of approximately 1.3 million people was hacked.

Spec’s - wine retailer in Texas
Affecting as many as 550,000 customers across 34 stores, hackers got away with customer names, debit/credit card details (including expiration dates and security codes), account information from paper checks, and even driver’s license numbers.

St. Joseph Health System
Also in Texas, a server was attacked that held approximately 405,000 former and current patients, employees, and beneficiaries information.  This data included names, Social Security numbers, dates of birth, medical information, addresses, and some bank account information.

The US Department of Health and Human Services has a breach database of incidents related to exposure of personal health information.  Due to late entries, dates weren’t listed, but the following were reported:

• 25,513 records at Dept. of Medical Assistance Services in Virginia
• 22,511 records at Cook County Health & Hospital System
• 18,000 records at Terrell County Health Dept. in Georgia
• 10,000 records at Health Advantage in Arkansas
• 84,000 records at St. Francis Patient Care Services in Tulsa, OK
• 10,024 records at Missouri Consolidated Health care

A new study from researchers at Gartner indicates that it is markedly less expensive for companies to invest in new security and encryption technologies than it is for them to respond to a data breach. According to the analyst firm, businesses pay roughly $6 per year per user for encryption tools, or $16 per user per year for intrusion prevention software licenses, versus paying out an average of $90 per user to address problems after a breach has occurred.

Five steps you can take to make sure this doesn’t happen to you:

1. Have a defense-in-depth strategy that meets your level of risk tolerance
2. Make sure you know where all of your sensitive data is stored, and who has access to it
3. Use standardized encryption algorithms to make that data unreadable
4. Use an encryption key management solution to protect keys away from the data
5. Use two-factor authentication whenever possible, because passwords are no longer enough

To help open up the conversation around your conference table, download this eBook “Turning a Blind Eye to Data Security” and find out more about the tools & resources to begin discussions about data security in your company!

The academic cryptographic community has been very inventive lately and we are seeing some promising new encryption technologies start to emerge. Format preserving encryption is moving through a standards track at the National Institute of Standards and Technology (NIST) and I think we will see one or more of the proposed FFX modes of encryption achieve standards status soon.

Homomorphic encryption is also a promising encryption approach that allows for various operations on encrypted (ciphertext) values without having to first decrypt the value. That’s pretty cool. There are a number of cryptographers working on approaches to homomorphic encryption, but at this point there is no clear consensus on the right approach. I suspect that some consensus on the best approach will emerge, but it may take some time for this to happen. Cryptography is hard, and it needs time for proper examination and analysis of both mathematical and implementation strengths and weaknesses before its adoption in commercial systems. We need to give the cryptographic community time to do their work.

If homomorphic encryption is cool, why not use it?

It has not achieved wide review and acceptance
While there is promising work on homomorphic encryption, there is no clear consensus on the best method or implementation approach. Typically a new cryptographic method will not get a full review from the cryptographic community until there is some consensus, and not until a standards body takes up the new method in a formal review process. There are a large number of potentially good encryption methods that have been thoroughly reviewed by the professional cryptographic community but which have not achieved the status of an approved standard.

Homomorphic encryption has not yet been through this process and it is too early to trust any current proposals or implementations.

It is not a standard
Standards are important in the encryption world. Standard encryption algorithms receive the full scrutiny of the professional cryptographic community and we all benefit from this. Weaknesses are discovered much faster, weak implementations are identified, and we all have much more confidence in encryption based on standards. The Advanced Encryption Standard (AES) has stood the test of time since its adoption by NIST in 2001.

Homomorphic encryption has not yet achieved the status of an accepted and published standard.

Note: Mathematical proofs do not a standard make. They are required as a part of the standards review and adoption process, but mathematical proofs alone do not rise to a level of an accepted standard. Claims to the contrary are false.

It cannot be certified by a standards body
Since homomorphic encryption is not a standard, there is no independent standards body process to validate a vendor’s implementation. This is important - in an early study by NIST of encryption solutions submitted for validation, nearly 37% of the solutions contained errors in the implementation and failed validation. The failure rate for implementations of homomorphic encryption are likely as high and unknowable. All serious vendors of encryption technology have validated their AES implementations to FIPS 197 standard through the NIST AES validation process.

No such similar standards validation process exists for homographic encryption.

It cannot achieve FIPS 140-2 validation
Encryption key management solutions are cryptographic modules and can be validated to the FIPS 140-2 standard. NIST has established a validation process through a number of chartered test labs. All serious vendors of encryption and key management solutions validate their products through this process. One of the first steps in key management FIPS 140-2 validation is validation of the encryption methods used by the key manager. The approved encryption methods are documented in Annex A of FIPS 140-2.

Homomorphic encryption is not an approved encryption method and cannot be validated to FIPS 140-2 at this point. Any representation that homomorphic encryption or key management systems implemented with it are “FIPS 140-2 compliant” is false.

Intellectual property claims are not resolved
Organizations large and small are rightfully concerned about violating patents and other intellectual property claims on information technology. At the present time there are multiple vendors claiming patents on homomorphic encryption techniques. Most encryption methods that have been adopted as standards are free of these types of IP claims, but homomorphic encryption is not free of them.

Organizations would be wise to be cautious about deploying homomorphic encryption until the patent and intellectual property issues are clearer.

Compliance regulations prohibit its use
Many compliance regulations such as PCI-DSS, HIPAA/HITECH, FISMA, and others are clear that only encryption based on industry standards meet minimal requirements. Standards bodies such as NIST, ISO, and ANSI have published standards for a variety of encryption methods including the Advanced Encryption Standard (AES).

Homomorphic encryption is not a standard and it is difficult to imagine that it could meet the minimum requirements of these and other compliance regulations.

Summary
Homomorphic encryption is a promising new cryptographic method and I hope that we will continue to see the cryptographic community work on it, and that we will see its future adoption by standards bodies with a proper validation processes. We just aren’t there yet.

It seems like everyday there is a new data breach in the news.

From malicious hackers to unintentional employee mistakes, loss of sensitive data is skyrocketing. Risk management has brought the data breach issue out of the IT department, and into the offices of Enterprise executives. Data loss is considered such a critical issue that encryption and encryption key management is mandated not only by many industry compliance regulations, but also by most state and governmental laws.

Here are a few key thoughts to consider:

5 Misconceptions About Data Security That Put You At Risk

1   If we have a breach, we’ll just pay the fine.

In many cases there will be fines for a data breach, but it is only a small part of the total cost. The cost of a breach also typically includes a forensics investigation, credit monitoring for customers, lost sales due to brand damage, and litigation costs.

2   We’ve never had a problem, so things are probably OK.

This type of thinking is not a form of risk assessment. Since data breaches often take months to discover, you may not know that a breach has already occurred. Wishful thinking won’t help you prevent a breach.

3   My software vendors and consultants say they have everything under control.

Today, many software vendors have not moved quickly enough to add encryption to their core products. It is not wise to rely on vague statements about data security from vendors and consultants. Make sure their solutions have been through a NIST FIPS 140-2 validation, using best practices, and based on industry standards such as AES.

4   My IT staff says we’ve done everything we can.

IT departments may not have the resources or management directives they need to accurately assess and address data security issues. Meeting management’s goals and objectives within a set of operational and budgetary constraints is not the same as meeting security best practices.

5   We are encrypting our data, we are doing everything we should.

If you are encrypting your sensitive data, you’ve already made a good step forward. Do you know how and where your encryption keys are stored? Making sure your keys are not stored with your data is only the first step.  Good key management practices will truly protect your data.

5 Steps to Take to Reduce Security Risk

1   Talk About It

Discuss the importance of data security as it relates to risk management with all members of the organization’s leadership team. Data security is an ongoing process that involves every member of the organization, and will extend beyond your organization’s boundaries to vendors and service providers. Responsibility for data security belongs to everyone.

2   Assess Your Current Data Security Posture

If you have not had an external audit and assessment of your organization’s data security practices by a qualified security professional, now is the time to start. First, perform a data security assessment with an in-house consultant, security audit firm, or platform vendor to evaluate your current security posture. Find the location of all sensitive data. Lastly, evaluate the security of your backup tapes. The right security assessor will help you identify the most urgent problems, and help you prioritize your efforts.    

3   Invest in Encryption and Key Management

When you have located sensitive data that is not encrypted, start a project to encrypt it now. Don’t forget to invest in the necessary encryption key management devices to protect the encryption keys. If your risk assessment warrants, provide budgetary exceptions to address the problem. Invest where you need to, as soon as you can. When choosing an encryption and key management solution make sure it uses industry standard NIST compliant encryption and FIPS 140-2 compliant key management.

4   Strengthen your technology acquisition processes

Every organization relies on off-the-shelf software solutions to manage and run their business operations. If your core applications do not provide encryption and key management to protect data, put your vendors on notice that they must address this issue immediately, and ask for updates. All new technology acquisitions should incorporate data security requirements into the RFP process.

5   Create ongoing review processes and procedural controls

Performing one security assessment or passing one compliance audit will not provide the focus and attention needed to protect you from a data breach over time. You must conduct routine vulnerability scans, create new processes, and review points within the organization to ensure that you continue to monitor your security stance. Use good procedural controls to minimize the chances of fraud. Implement Dual Control and Separation of Duties to achieve a defensible data security stance.

To learn more, download the eBook, "Turning a Blind Eye to Data Security: Mending the Breakdown of Communication Between CEOs and CIOs", and authors Kevin Beaver, CISSP, Patrick Townsend, and Todd Ostrander will teach you about:

• Business risks associated with unprotected sensitive data 
• Tools and resources to begin the discussion about data security in your company 
• Actionable steps YOU can take

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