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Townsend Security Data Privacy Blog

HIPAA, Ransomware and ePHI - Encrypt Your Data Now

Posted by Patrick Townsend on Jun 29, 2021 3:04:55 PM

Ransomware criminals have been going after Hospitals, Clinics, Radiologists, Physician practices and all manner of organizations in the medical sector. These are “Covered Entities” in HIPAA compliance lingo. In response to the Ransomware threat the US Department of Health and Human Services (HHS) Office for Civil Rights (OCR) made this strong statement this last week:

“OCR is sharing the following alerts from the White House and Cybersecurity and Infrastructure Security Agency (CISA).  Organizations are encouraged to review the information below and take appropriate action.

White House Memo: What We Urge You To Do To Protect Against The Threat of Ransomware

Anne Neuberger the Deputy Assistant to the President and Deputy National Security Advisor for Cyber and Emerging Technology has released a memo titled “What We Urge You To Do To Protect Against The Threat of Ransomware.”  

Here is the link in full:


In addition to the White House guidance, HHS/OCR provides this fact sheet and guidance:


Podcast on How to Avoid a Data Breach Notification with Encryption and Key ManagementThese are short documents that are non-technical in nature and provide clear guidance for any Covered Entity under HIPAA data security requirements. If you have management responsibility in any healthcare organization, these are probably the most important things you can read right now. If you are an IT or security professional in a healthcare organization, use this information to inform and motivate your management team. 

Here are few quick takeaways with a focus on encryption and avoiding breach notification:

  • Encrypt your patient information (ePHI) wherever it resides (servers, laptops, mobile phones, etc.). Here is what HHS/OCR says:

“If the electronic PHI (ePHI) is encrypted by the entity in a manner consistent with the Guidance to Render Unsecured Protected Health Information Unusable, Unreadable, or Indecipherable to Unauthorized Individuals such that it is no longer “unsecured PHI,” then the entity is not required to conduct a risk assessment to determine if there is a low probability of compromise, and breach notification is not required.”

Interpretation: Encryption is your “Get Out of Jail Free” card. If you do it right.

  • Full Disk Encryption (FDE) is not enough:

“If full disk encryption is the only encryption solution in use to protect the PHI and if the ransomware accesses the file containing the PHI, the file containing the PHI will be transparently decrypted by the full disk encryption solution and access permitted with the same access levels granted to the user.

Because the file containing the PHI was decrypted and thus “unsecured PHI” at the point in time that the ransomware accessed the file, an impermissible disclosure of PHI was made and a breach is presumed. Under the HIPAA Breach Notification Rule, notification in accordance with 45 CFR 164.404 is required unless the entity can demonstrate a low probability of compromise of the PHI based on the four factor risk assessment (see 45 C.F.R. 164.402(2)).”

Full disk encryption is pretty easy to deploy. However, it just does not provide enough security. Use database or application layer encryption that provides more granular control over the decryption of ePHI. Self-Encrypting Drives (SEDs) and full disk encryption will not pass muster.

  • Encryption Key Management is essential

You’ve heard this expression:

“A chain is only as strong as its weakest link.”

In an encryption strategy the weakest link is usually encryption key management. The encryption key is the secret you need to protect. Storing the encryption key on the same server or device as the ePHI will never be an acceptable practice. Always use a professional encryption key management solution that protects and stores the encryption key away from the sensitive ePHI data.

Encryption is not the only security effort you need to make, but in my experience it is the one thing healthcare organizations tend to ignore. I think this is because the HIPAA law considers encryption an “addressable” security control. This means you are not required to do it IF you have other equivalent controls in place. But if you are not encrypting your data and you have a data breach through Ransomware or other cyber attack, then you have “ipso facto” not protected your information well enough and you are in for a breach notification, OCR/HHS compliance action (ouch!), potential fines, and litigation. That won’t be fun, and it will be a lot more expensive than encryption.

We help a lot of healthcare providers meet the HIPAA security requirement. If you are storing ePHI in SQL Server, MongoDB, MySQL or in a VMware architecture or cloud platform, we have an affordable, easy solution for you. More information on our website:


If you are a Managed Service Provider (MSP) helping healthcare providers meet HIPAA compliance, we have a partner program for you that you are going to love. There is no entity so small that you can’t help them get secure. You can find out more here:



Achieve Safe-Harbor Status from HIPAA Breach Notification

Topics: Encryption, Encryption Key Management, HIPAA, MSP, CyberSecurity, ePHI


Posted by Patrick Townsend on Jun 15, 2021 3:22:26 PM

If you’ve been following this blog recently you know that I’ve been advocating for the use of encryption to help prevent ransomware attacks. Ransomware attackers have been adapting to the new reality that a lot of companies have deployed good backup strategies to recover their files. Without that leverage the attackers can’t extort payments for recovery of your systems.

So, what are they doing now? They are exfiltrating your sensitive data and using that as additional leverage. 

Encryption Strategies for VMware EnvironmentsOh, you have backups and you don’t want to pay? OK, we took your sensitive data and we are going to publish it. Do you have secret intellectual property or business plans? Do you have sensitive medical information on your patients? Do you have sensitive information about children in your care? 

Under this kind of pressure many ransomware victims decide to pay the ransom. 

That’s why it is important to encrypt your data before a ransomware attack. If the attacker can’t read your data because it is encrypted they can’t threaten to release it.

It has been frustrating to me that most security recommendations on how to protect yourself from a ransomware attack omit the step of encrypting your data first.

But that has now changed! And it is long overdue.

Here is what President Biden’s new executive order recommends (emphasis added):

What we urge you to do now:

Implement the five best practices from the President’s Executive Order:President Biden’s Improving the Nation’s Cybersecurity Executive Order is being implemented with speed and urgency across the Federal Government. We’re leading by example because these five best practices are high impact: multifactor authentication (because passwords alone are routinely compromised), endpoint detection & response (to hunt for malicious activity on a network and block it), encryption (so if data is stolen, it is unusable) and a skilled, empowered security team (to patch rapidly, and share and incorporate threat information in your defenses). These practices will significantly reduce the risk of a successful cyberattack. 

And  more ...

And this:

For Federal Agencies:

Modernize and Implement Stronger Cybersecurity Standards in the Federal Government. The Executive Order helps move the Federal government to secure cloud services and a zero-trust architecture, and mandates deployment of multifactor authentication and encryption within a specific time period. Outdated security models and unencrypted data have led to compromises of systems in the public and private sectors. The Federal government must lead the way and increase its adoption of security best practices, including by employing a zero-trust security model, accelerating movement to secure cloud services, and consistently deploying foundational security tools such as multifactor authentication and encryption.

Encryption is not the only thing you need to do, but it is a critical part of a ransomware protection strategy. It is heartening to see this being recognized.

There is some good news: Encryption is fast, easy and affordable. If you are a small or midsize organization you will be glad to know that there is an affordable solution for your encryption strategy. Encryption and encryption key management are no longer the headaches they once were. You or your IT Support organization can address your encryption needs in a rapid manner. 

If you are an IT Support Provider or Managed Service Provider trying to help your customers with security, you are going to love our MSP Partner program. Affordable key management for VMware and the cloud, usage-based billing, and no upfront fees. You will be profitable from the first customer. More information here: 


Ransomware attacks can be devastating to an organization, but you have tools to protect yourself. Give us a call.





Encryption & Key Management for VMware Cloud Providers

Topics: Alliance Key Manager, Encryption, Encryption Key Management, VMware, Ransomware, MSP

Encryption and Key Management for VMware Hosting Providers and MSPs

Posted by Luke Probasco on Jun 12, 2020 9:40:30 AM

VMware has become the most trusted name in on-premise computing infrastructure. Because of its ease of use and administration, reliability and security, VMware is able to provide exceptional services to small and large organizations alike. As these organizations move to the cloud, VMware hosting partners and managed service providers (MSPs) are able to service this market by providing off-premise deployments of VMware and an extensive array of VMware management and administrative services. For more information on how VMware hosting providers can better secure customer data, check out our "Definitive Guide - Encryption Key Management for VMware Cloud Providers" page.

Delivering Secure VMware Hosting with Encryption & Key ManagementI recently sat down with Patrick Townsend, Founder and CEO of Townsend Security, to talk about how Townsend Security is helping VMware hosting providers meet the challenge of encryption and encryption key management, while supporting the usage-based business model core to many of these hosting providers.  Additionally, Patrick discussed VMware architecture, VMware security, delivering compelling hosting & services, and compliance, standards, and encryption.

Hi Patrick. In recent years VMware has embraced the movement to the cloud with key partnerships with leading cloud service providers. What is less well known is that VMware has spawned and supports a broad set of hosting providers that serve local and regional markets. These VMware hosting providers also provide the expertise and managed services that many large cloud providers do not.

There are a fair number of VMware hosting providers and MSPs now with their own hosted, or cloud, platforms who are running VMware full stack implementations for their customers. Customers now have many options for managing their VMware infrastructure on premise or at a VMware hosting provider data center.  Many of these customers maintain both on-premise and hosted environments to meet their customers’ business needs. The VMware ecosystem is growing and resilient, and an important part of the IT services landscape.

Security has got to be essential for these hosting providers and MSPs. What do you think they are doing well and where could they use a little help?

Well, security is a core focus of VMware applications, and the security features have had a lot of time to mature. For example, VMware now offers encryption in several of their products. However, the deployment of proper encryption relies on support from third party KMS vendors. Realizing the importance of key management, VMware adopted the Key Management Interoperability Protocol (KMIP) standard, which allows vendors like Townsend Security to provide key management solutions that allow businesses to store and manage their encryption keys through their entire lifecycle.

Townsend Security is proud to help VMware hosting providers and MSPs implement encryption and do it the right way that matches their business model.

So, let’s spend a minute and discuss delivering compelling hosting and services.

VMware hosting providers and MSPs are rapidly changing the way that VMware customers are managing their IT infrastructure. These VMware partners are filling a services and support gap left by typical, large cloud service providers. Hosted VMware infrastructure, Disaster Recovery as a Service (DRaaS), automated backup and recovery, and expertise on demand provide compelling value to VMware end customers. Amazingly, many of these VMware hosting partners are providing a far more affordable solution than large Cloud Service Providers. Townsend Security’s Alliance Key Manager is filling the KMS gap for VMware hosting providers and MSPs by providing an Enterprise KMS system that matches the way they do business. Gone are the complexities of sourcing, deploying, licensing and administering a KMS for the VMware environment. Townsend Security empowers the VMware hosting provider with on-premise and customer premise solutions for every VMware KMS need.

There are a few strategies that these hosting providers and MSPs can use to secure customer data in VMware environments.  For example, data can still reside on-premises or in the cloud and be encrypted in VMs or in vSAN, or even through Virtual Trusted Platform Module (vTPM).  First, let’s cover On-Prem and the Cloud. 

Sure. Many VMware hosting providers and MSPs often are the experts who manage a customer’s on-premise VMware infrastructure. If you don’t have in-house expertise these partners can step up to help you. This means that the same security tools that are used at the hosting site need to be available at the customer site. This is a core part of the value that a VMware hosting provider and MSP provides to their customers - run VMware on-premise, on their cloud, or combine the two. Some VMware MSPs provide expertise and services to help their customers move to one of the larger cloud platforms. 

If you are a VMware hosting provider and you provide this type of service to help customers move to Microsoft Azure VMware Solution, Google VMware Cloud Engine, or IBM Cloud for VMware, or other full-stack VMware cloud service, we can help you with your KMS needs in the same way. 

Let’s circle back to how data is being encrypted in VMware

As a VMware hosting provider or MSP, you are able to quickly and easily deploy encryption of VMs for your customers with vSphere encryption. It is important to not forget about also deploying a KMS. The second most popular encryption option in a VMware environment is the encryption of vSAN virtual directories. The VMware architecture for key management for vSAN is the same vSphere KMS cluster configuration used for encrypting VMs. Encryption of vSAN storage is one of the great ways to protect databases in the VMware infrastructure. It can be expensive to upgrade Oracle, SQL Server or MongoDB to get encryption support, but you can easily provide encryption at rest by deploying these databases on encrypted vSAN storage at a fraction of the cost of an upgrade. And you can do encryption at rest for open source databases that do not directly implement encryption or proper key management. This includes MariaDB, PostgreSQL, SQLite and others.

Another option is to use OS encryption through the virtual trusted platform module (vTPM), right?

The Trusted Platform Module (TPM) chip is implemented on many Intel architecture servers and provides an additional level of encryption key protection in traditional server environments. Unfortunately, the TPM architecture works poorly in a VMware environment where workloads can move and migrate between servers. Thankfully, VMware came to the rescue with Virtual TPM (vTPM)!  By installing the appropriate vTPM drivers from VMware you can achieve TPM security that works natively with your VMware platform. vTPM also leverages the same vSphere KMS interface, so encryption and proper key management are easy to deploy.

How is Townsend Security helping VMware hosting providers and MSPs with encryption and key management? 

Townsend Security has been a VMware partner for many years.  Our KMS, Alliance Key Manager, is certified by VMware on all releases of vSphere and vSAN that support encryption. At Townsend Security we have worked hard to create a hosting provider/MSP program that takes the pain out of a KMS partnership. Most notably, if you provide VMware hosting services on a usage-based model, we will help you deliver a KMS for encrypted VMs and vSAN with the same model. For example, if you are charging your customers per virtual machine or per main memory, depending on how much you use, we will snap right in to your environment and help you deliver encryption of VMs and vSAN in the same way.We do this with no upfront fees, no annual license charges or separate maintenance fees, we just make it really simple to deploy and use for the VMware hosting provider.

Is there anything else that you would like to share about your partner program?

First, it is very easy and simple to get started with our partner program.  Just visit www.townsendsecurity.com/msp. If you are interested in more information, there is a short form to fill out. We make it extremely cost effective for hosting providers to deploy encryption and key management for their customers.  I’d also like to mention that our KMS is certified for every version of vSphere and vSAN that support encryption, is validated for PCI-DSS compliance, and has been through a FIPS 140-2 validation.

You can actually download Alliance Key Manager for VMware directly from our website and immediately load it into VMware.  We also have our support team ready to help you get deployed - without a charge. It just takes minutes. We are proud to have lowered the barrier to entry and administrative overhead typically associated with encryption key management - which makes it easier than ever for VMware hosting providers and MSPs to offer better security to their customers.

To hear this conversation in its entirety, download the podcast “Delivering Secure VMware Hosting with Encryption & Key Management” to hear Patrick Townsend, Founder and CEO, further discuss VMware architecture, VMware security, delivering compelling hosting & services, and compliance, standards, and encryption.

Delivering Secure VMware Hosting with Encryption & Key Management

Topics: Encryption Key Management, VMware, Hosting Providers

Encryption for VMware Hosting Providers and MSPs

Posted by Patrick Townsend on Jun 8, 2020 8:58:16 AM

This blog is an excerpt from the white paper Delivering Secure VMware Hosting with Encryption & Key Management.

Delivering Secure VMware Hosting with Encryption and Key ManagementVMware is the most trusted name in on-premise computing infrastructure. Its ease of use and administration, reliability and security provide exceptional services to small and large organizations alike. As organizations move to the cloud, there are now a large number of VMware hosting partners and managed service providers (MSPs) who provide off-premise deployments of VMware and an extensive array of VMware management and administrative services. This white paper discusses how Townsend Security is helping VMware hosting providers meet the challenge of encryption and encryption key management, while supporting the usage-based business model core to many of these hosting providers.

VMware Architecture and Benefits

The benefits of VMware in the data center are now well recognized. Reduction in hardware and utility costs, reduction in administrative costs, improvement in managing ever-changing workloads, resilience and business continuity, and exceptional security are just some of the primary benefits. This is why VMware is the leading infrastructure virtualization technology on a global basis.

In recent years VMware has embraced the movement to the cloud with key partnerships with leading cloud service providers. What is less well known is that VMware has spawned and supports a broad set of hosting providers that serve local and regional markets. These VMware hosting providers also provide the expertise and managed services that many large cloud providers do not. 

The growth of the VMware hosting provider eco-system provides important support for VMware customers. Customers now have many options for managing their VMware infrastructure on premise or at a VMware hosting provider data center. Many customers maintain both on-premise and hosted environments to meet their business needs. The VMware eco-system is growing and resilient, and an important part of the IT services landscape.

VMware and Security

While VMware has always been a leader in IT security, the company recognized the importance of encryption and proper encryption key management to meet security best practices and evolving compliance regulations. In 2016 VMware released version 6.5 of vSphere which enabled built-in support for encryption of virtual machines (VMs) and virtual storage (vSAN). In any encryption strategy, it is important to protect the encryption keys using a purpose-built key management security system that secures the keys away from the protected information. The VMware security architecture integrates with a key management server (KMS) to protect the encryption keys that are used by ESXi and vSAN. The interface between vSphere and the key management server is based on the Key Management Interoperability Protocol (KMIP), an open standard for KMS systems. 

In vSphere the administrator defines a primary key manager and one or more failover key managers using the KMS Cluster module. vSphere manages the failover to a backup key server in the event the primary key server is not available. This also enables failover to a disaster recovery VMware node in an automatic fashion. The result is a robust implementation of encryption with key management based on the open OASIS KMIP standard and deployed in a highly resilient fashion.

VMware Hosting and MSP Partners

VMware hosting partners and MSPs are called on to deploy proper security in the VMware infrastructure. Security is largely provided by native VMware applications such as NSX and others. However, the deployment of a key management system depends on support from third party KMS vendors. Townsend Security is one of those vendors with its Alliance Key Manager solution.

Unfortunately, most enterprise KMS systems are expensive, difficult to deploy, lack needed failover reliability, and have complex licensing and management requirements. Many VMware hosting providers provide their infrastructure and services on a usage-based model. Enterprise KMS systems generally do not fit this delivery, reporting and billing model.

Townsend Security is solving this problem by providing its Alliance Key Manager solution on a usage basis. VMware hosting providers will benefit from the Townsend model as it matches their business delivery model and makes KMS affordable to their end customers. When your encryption key management strategy lines up with your business model you are able to manage your growth in a predictable way.

Delivering Compelling Hosting and Services

VMware hosting providers and MSPs are rapidly changing the way that VMware customers are managing their IT infrastructure. These VMware partners are filling a services and support gap left by typical, large cloud service providers. Hosted VMware infrastructure, Disaster Recovery as a Service (DRaaS), automated backup and recovery, and expertise on demand provide compelling value to VMware end customers. 

Townsend Security’s Alliance Key Manager is filling the KMS gap for VMware hosting providers and MSPs by providing an Enterprise KMS system that matches the way they do business. Gone are the complexities of sourcing, deploying, licensing and administering a KMS for the VMware environment. Townsend Security empowers the VMware hosting provider with on-premise and customer premise solutions for every VMware KMS need.

Delivering Secure VMware Hosting with Encryption and Key Management

Topics: Hosting, Encryption Key Management, VMware

State of Encryption Key Management

Posted by Luke Probasco on Apr 20, 2020 8:05:12 AM

Data security compliance requirements and corporate security initiatives continue to drive the adoption of encryption and key management to protect private information - ranging from customer information to electronic protected health information (ePHI) to a company’s intellectual property (IP). Deploying encryption naturally means properly protecting encryption keys, which historically has been the biggest challenge that organizations face with their encryption strategy. As such, it is far too common to see businesses not properly storing their encryption keys - for example, keeping them in a database in the clear or even burned into their application’s code.

State of Encryption Key ManagementFortunately, encryption key management solutions are more affordable and easier than ever, however, not all solutions are created equal. Standards such as FIPS 140-2 remain, but what does that mean in a virtual environment? Additionally, we are seeing all the major cloud service providers (CSPs) offer encryption key management as a service, but there are several fundamental reasons enterprises are hesitant to adopt them.

I recently sat down with Patrick Townsend, Founder and CEO, to discuss the current state of encryption key management, databases/applications that natively provide encryption and key manager integrations, and questions to ask your key management vendor. 

Hi Patrick. Let’s just take a minute and acknowledge how far encryption key management has come.

It is incredible how far encryption key management has come over the last 15 years. As I think back to when we started this journey, it was a very different environment. One of the motivating factors for us to get in the key management game was that key management systems used to be terribly expensive and complex - and usually involved a team of expensive consultants to deploy. Early on, I even had a key management system (KMS) vendor tell me that they didn’t want to do a deal under $10 million - and that just isn’t going to work for smaller companies. This just really influenced how we got started. Companies of all sizes deserve to have good encryption and key management as part of their defense in depth security strategy. I am very proud of our team for creating a key management solution that has been FIPS 140-2 validated and affordable to the small and medium sized enterprises who need to protect their employees and customers without having to pay for every database, connection, or encryption key. We have now passed the 10 year mark with Alliance Key Manager. While it was first introduced as a physical hardware security module (HSM), we have added VMware and cloud platforms (AWS and Microsoft Azure) - and starting at $4,800 is affordable to every customer. I am proud that we have played a part in making encryption key management affordable to businesses of all sizes.

Speaking of cost, could you imagine if deployments were still $10 million?

It really is incredible. If that were still the cost, small and medium sized businesses would be priced out of the market - and their data a lot more vulnerable. With that said, it still amazes me how much KMS vendors are still charging for some of their solutions. Recently we had a prospective customer forward us a quote from another KMS vendor and it was astonishing. The customer was trying to protect 12 Microsoft SQL Server databases and the quote was for $194,000! And that was just the start. As the customer adds additional databases in their environment, there is going to be more and more cost as they go forward. For the same hardware-based HSM solution, we would charge $36,000 for two HSMs and save the customer $158,000! Alternatively, we even could offer VMware or cloud instances that would have been even less expensive.

As a company, we are passionate about keeping a low and predictable total cost of ownership (TCO). You shouldn’t have to go back to your key management vendor every time you want to add a database or encrypt something in a new environment. This model of pricing can add up very quickly. We offer a simple pricing structure - license the KMS, pay annual maintenance, and use the key manager to protect as much data as you’d like. From my point of view, there is no justification for a pricing strategy that penalizes businesses for doing more security.

Aside from cost and ease of deployment, there really has been a growing awareness on the importance of key management. 10 years ago when you first started, small and medium sized businesses didn’t even know what key management was.

Certainly. Key management is the cornerstone of an encryption strategy. If you are doing encryption, you must protect encryption keys. In fact, key management is starting to show up in regulatory compliance requirements. For example, if you look at the California Consumer Privacy Act (CCPA), you will find proper key management called out as being core to protecting data. If you are not using key management, you are NOT adequately protecting your encryption keys and you lose some of the protections under the CCPA.

As businesses deploy modern key management solutions, they need to make sure the key manager has been FIPS 140-2 validated and is key management interoperability protocol (KMIP) compliant. The industry as a whole is still catching up to these standards. For example, with AWS KMS or Azure Key Vault, businesses do not have industry standards based interfaces for key management. Rather than using the KMIP standard, they are requiring customers to use their proprietary interface. Standards, like KMIP, are incredibly important when it comes to reducing your cost of encryption in the long run. Fortunately, we are seeing most major database and application vendors adopting the KMIP standard and natively supporting encryption, leaving the key management to the user.

Also, it is still the wild west out there in regards to some KMS vendors. I think people should avoid solutions that require external, third party hardware modules to back up the key manager. That is completely unnecessary. There are open source solutions that provide vaults that are not FIPS 140-2 compliant unless they are backed up by an HSM.

Again, key management is core to a security strategy and really has come a long way since the early days. It now takes a few minutes to get a KMS up and running, you don’t need outside consultants or someone to come on site, and most of the time doesn’t take any paid services!

You mentioned KMIP. It has been great to see more databases and applications adopt the standard.

That’s right. Encryption usually doesn’t require application changes anymore - it has become a non-technical exercise. KMIP has fundamentally changed the way businesses deploy encryption and key management. For example, we have seen databases like MongoDB and MySQL and VMware’s vSphere and vSAN support KMIP. Let’s take a look at MongoDB. MongoDB Enterprise includes 256-bit AES encryption built into the database. Knowing the importance of key management, they built in support for KMS vendors with the KMIP standard. Now their users can seamlessly encrypt data and easily manage the encryption keys separate from the data that they protect.

KMIP really has been a game changer for the key management industry and really underscores the importance of basing solutions on industry standards. Unfortunately, it isn’t everywhere - yet. Typically, KMIP is reserved for Enterprise versions of databases. With that said, there are still options for shops running “Standard” or “Community” versions.

There are. Chances are that these shops are running a version of VMware that supports vSphere and vSAN encryption. By deploying “Standard” versions of databases directly in vSAN, they can utilize the encryption and key management options already included in their VMware products. Furthermore, VMware has developed excellent guidance that is available on their website on how to install databases into an encrypted vSAN. If you are an Oracle customer, for example, and feel like you can’t afford the expense of upgrading to Oracle Enterprise with Advanced Security in order to get encryption, VMware has your back. By doing this, businesses can affordably meet regulatory compliance and protect their sensitive data. Same is true for other databases.

Let’s keep talking about compliance. Compliance has been a major driving force for organizations adopting encryption key management.

Yes. Businesses of all sizes and industries fall under a variety of compliance regulations. If you take credit cards, you fall under PCI DSS. If you are a covered entity in the medical segment you fall under HIPAA. California recently passed the California Consumer Privacy Act (CCPA) which has reach far beyond the borders of California. It is important to note that CCPA also requires proper key management. Storing encryption keys next to the secured data provides you no protection from data breach notification and class action lawsuits. You have to get key management right. 

Regulations certainly are one major factor driving the uptake in encryption. Over time, we have seen regulations evolve and encryption keeps getting more embedded in these regulations and is recognized as a core part of a defense in depth strategy. With that said, compliance isn’t the only reason a company deploys encryption and key management. We regularly talk with customers concerned with reputation, protection of intellectual property (IP), or a host of other reasons.

For businesses who haven’t deployed encryption key management yet, what are some questions that they should ask vendors?

There are definitely some baseline qualifiers here. Look for a FIPS 140-2 validation. Has the solution ever been validated by the National Institute of Standard and Technology (NIST)? Some key management vendors out there will say they are compliant and unable to prove it because they have never received a formal validation. It is important to ask for their certificate number. Don’t accept a third-party letter saying that the solution is compliant. There is no substitute for a NIST validation. They aren’t cheap or easy, which is a major differentiator between the good and not-so-good key management vendors.

As discussed earlier, good key management systems will adopt the KMIP interface. You should easily be able to use your key management solution seamlessly with the growing number of databases and applications that support KMIP.

Who has administrative access to the keys? Do you have exclusive control or is access shared with a cloud service provider (CSP) or key management vendor? Most of the CSP key management offerings are in shared environments - both you and your CSP have access to your keys. Also a consideration, are you OK with CSP lock-in? Most businesses today are trying to achieve a cloud-neutral implementation and you don’t want your key management solution to defeat that effort.

I think that these are the topics that should be top of mind for businesses as they move through their cloud encryption strategy and think about key management.

Is there anything that you would like to share about Townsend Security’s Alliance Key Manager that you haven’t mentioned yet?

Alliance Key Manager comes along with a wide variety of client applications and SDKs - at no charge - to help you secure databases and applications like VMware, Microsoft SQL Server, MongoDB, MySQL and others. As I mentioned earlier, it is cost effective and affordable to organizations of all sizes. I think that our key manager is the most cost-effective, standards-based solution in the market. By offering the key manager on multiple platforms, which are all cross-compatible, businesses have a variety of options for their encryption strategy that are easy to deploy.

The last thing that I would like to point out is that our solution is very partner friendly. Alliance Key Manager is embedded in many ISV environments and products. We have flexible programs that allow our partners to get encryption right by embedding key management into their solution.

To hear this conversation in its entirety, download the podcast “State of Encryption Key Management - 2020” to hear Patrick Townsend, Founder and CEO, further discuss the latest trends and perspectives around encryption key management and how to better protect your data.

Podcast: State of Encryption Key Management

Topics: Encryption Key Management

Enterprise Key Management System (KMS) vs Cloud Key Service (KMS, Key Vault)

Posted by Patrick Townsend on Mar 16, 2020 3:38:00 PM

I am often asked about public cloud provider encryption key services like AWS KMS and Azure Key Vault. There are substantial differences between an Enterprise Key Management System (we have one) and the key services provided by Amazon and Microsoft (and Google has one, too). Enterprise Key Management Systems provide dedicated, full lifecycle key management under your exclusive control. Cloud key services provide a small subset of encryption key management support, in a non-dedicated, multi-tenant, shared environment. 

Perhaps the best way to show the differences is in a side-by-side table comparing our Alliance Key Manager for AWS and Azure, and Cloud Service Provider (CSP) key services:


Alliance Key Manager

Cloud Key Service




FIPS 140-2 Compliant


Back end only

OASIS KMIP compliant






Dedicated control


No, Shared Custody

Cross cloud



Mirror keys to on-premise



On-premise to cloud seamless migration



Backup off cloud



Key mirroring across regions/zones



Migrate to HSM



Automatic failover across regions/zones




VMware and Kubernetes


VMware encrypted VM support

Yes, certified


VMware encrypted vSAN support

Yes, certified


VMware vTPM support




Database & Application


SQL Server TDE support



MongoDB Enterprise Advanced support



MySQL Enterprise support



IBM DB2 support












.NET (C#)






















Download Alliance Key Manager

Topics: Encryption Key Management

Do You Have Encryption Key Management Server (KMS) Sticker Shock?

Posted by Patrick Townsend on Mar 10, 2020 9:11:45 AM

In any industry you will probably find a number of really responsible vendors, and of course, you will find the outliers and the outlaws. It is true in the security vendor community, too. There are a core group of responsible vendors, there are those that exaggerate the capabilities of their products, and there are those who just charge as much as they can get away with. I guess that is just human nature.

Download Alliance Key ManagerWhen I set out 15 years ago to bring encryption and key management solutions to market, I knew that the existing Key Management Server (KMS) products were highly priced and out of reach for most companies and organizations. A KMS vendor once told me that they did not want to work with any customer who did not want to spend at least $10 Million or more on their solution! I wanted to create a KMS solution that would be in reach for the average business, non-profit, and local government agency. Everyone deserves to deploy a really good security solution to protect their employees and their customers. We’ve now passed the 10-year anniversary of the first release of our Alliance Key Manager solution, and I am proud of the price disruption we created in every part of the KMS market – on-premise HSMs, VMware software appliances, and in the cloud (AWS, Azure).

I had a real shock this last week. Maybe things have not changed as much as I thought.

A prospective customer sent me a price quote from one of the mainstream KMS vendors. Their company wanted to purchase two key manager HSMs to protect 12 SQL Server databases. Look at how this was priced (numbers rounded):

Two key management HSMs:                                 $ 90,000

Annual software support for the HSMs:                  $ 16,000


12 Endpoint licenses for SQL Server                       $ 73,000

Annual software support for the endpoints:           $ 15,000


Total:                                                                       $ 194,000

Unbelievable !!!

This company was going to pay $106,000 for two key managers, and THEN pay for each database that had to be encrypted. There is no reason on Planet Earth why this customer should have to pay so much to protect a small number of databases. I feel sorry for them if they have other databases they need to protect as they will have to pay for each of those, too. It is not hard to see how this cost would rapidly escalate as the company worked to protect more data - and it is clear that the average small business or organization could never afford this solution.

Let me show you how we would price our solution for the same requirement:

Two key management HSMs:                                 $ 30,000

Annual software support and maintenance:         $ 6,000


12 Endpoint licenses for SQL Server                     $ 0

Annual software support and maintenance:         $ 0


Total:                                                                        $ 36,000

That’s right. For the same solution we would save this customer $158,000 out of the starting gate. Further, we would save them even more as they deployed encryption over additional databases - and the software maintenance costs would escalate, too.  How can we save you this much? Easy, we ask a fair price for our key management solution, and we don’t charge you at all for each database or application. If you purchase a key manager, we want you to use it for every security project you have. You don’t need to keep dredging up money each time you want to use the key management solution. With our pricing policy, it would be easy to envision saving this customer several MILLION dollars in KMS costs over a period of a few years!!!

Can you think of something you could spend that money on? Raises, new hires, new technology, business investment, and so much more. I am sure you can think of something useful to do with those funds. This kind of cost can drag a company down and reduce its competitiveness. This is outrageous.

You are not trapped and you have choices. Just talk to us.

In addition to being affordable, we make it easy to evaluate our Alliance Key Manager solution. You can now download it from our website, get access to documentation and quick start guides, and get access to full technical support.

You have options, just talk to us.


Download Alliance Key Manager

Topics: Alliance Key Manager, Encryption Key Management

California Consumer Privacy Act (CCPA) and Encryption Key Management

Posted by Patrick Townsend on Jan 31, 2020 9:46:06 AM

In October of 2019 I blogged about the California Consumer Privacy Act (CCPA) and its impacts on businesses. I knew that a lot of businesses were aware of the CCPA coming into effect on January 1, 2020, but I thought that there was a lot of misinformation and confusion about the CCPA. In that blog I laid out a number of facts about CCPA and some suggestions on actions you can take. I also noted that the law was very likely to get an update by the end of the year. You can find that original blog here:

California Consumer Privacy Act (CCPA) - Things You Need To Know

Podcast: CCPA - What You Need to KnowWell, that update to CCPA and related notification laws has happened. Several new laws were enacted in December 2019 that clarify and modify the CCPA. While the broad requirements of CCPA remain intact, there were some changes that bear noting.

One important change relates to encryption key management and breach notification. Let’s do a deeper dive.

First, it is important to note the role that encryption of sensitive information plays in CCPA. Among other things, the CCPA dramatically empowers consumers to recover damages after a data breach of unencrypted data, and limits the ability of businesses to inhibit that recovery. Here are a few aspects of CCPA law:

  • Businesses are not allowed to limit the ability of consumers to seek recovery. The widely used practice of liability limitation, arbitration clauses, and so forth are prohibited.
  • The California Department of Justice can levy steep fines on businesses that suffer a data breach and who have not adequately protected sensitive data.
  • Consumers are empowered to bring class action lawsuits around a data breach to recover damages. This kind of litigation is specifically enabled by the CCPA and should scare covered businesses.
  • However, class action lawsuits are only allowed with the loss of unencrypted sensitive data. Encryption is your friend!

So, what is different with the new laws?

AB1130 is one of those recent bills that modifies the CCPA notification requirements. It retains the litigation protections provided by encryption, but further clarifies that encryption keys must be properly protected. Here is what AB1130 says about breach notification (extracted and highlight added):

SECTION 1. Section 1798.29 of the Civil Code is amended to read:

1798.29. (a) Any agency that owns or licenses computerized data that includes personal information shall disclose any breach of the security of the system following discovery or notification of the breach in the security of the data to any resident of California (1) whose unencrypted personal information was, or is reasonably believed to have been, acquired by an unauthorized person, or, (2) whose encrypted personal information was, or is reasonably believed to have been, acquired by an unauthorized person and the encryption key or security credential was, or is reasonably believed to have been, acquired by an unauthorized person and the agency that owns or licenses the encrypted information has a reasonable belief that the encryption key or security credential could render that personal information readable or usable. The disclosure shall be made in the most expedient time possible and without unreasonable delay, consistent with the legitimate needs of law enforcement, as provided in subdivision (c), or any measures necessary to determine the scope of the breach and restore the reasonable integrity of the data system.

The full text of AB1130 is here:


Security professionals know that encryption is only as good as the protection you provide to the encryption key. The CCPA notification rules now embed that understanding right in the law. And you must understand what this means in terms of your litigation protections.

Let’s take one example:

Microsoft SQL Server is a widely used database for business information. SQL Server implements Transparent Data Encryption (TDE) to protect all data in the database. And it gives you two options for storing encryption keys:

  • Local storage of the key on the same server as the database.
  • Remote storage of the key by integrating with a professional key management system.

A lot of Microsoft SQL Server customers store the key locally on the same server as the database. Why? Well, it is easy and free. 

Here is the problem:

It is trivially easy for a cybercriminal to recover a locally stored encryption key if they have access to the server or a backup of the server. In fact, there are ready made programs that will just recover the key for the hacker and unlock the encrypted data, in just a few seconds. This is a prime example of where poor encryption key management will damage your ability to limit notification and liability under CCPA. Don’t expect to argue that the key was properly protected. Every security professional knows how poorly protected a locally stored key is.

Is there a way to mitigate this poor encryption key strategy?


Microsoft SQL server also supports remote encryption key management systems through a special interface known as Extensible Key Management, or EKM. You don’t have to store the key locally - you can easily plug in a key management system and protect the encryption key properly as the CCPA recommends. Problem solved, from a CCPA perspective. Our own Alliance Key Manager supports remote key management through the EKM interface.

Here are a few takeaways:

  • Under the CCPA, encryption is a critical part of your compliance strategy, and your strategy to limit liability after a data breach. It is hard to overstate the importance of encryption.
  • When you do encryption, you have to manage the keys properly. Use a professional key management system like our affordable Alliance Key Manager to accomplish this. Alliance Key Manager is NIST FIPS 140-2 compliant which is the gold standard for key management certification.
  • If you are currently storing the key locally, it is easy to move to a proper key management system. It usually just takes a few minutes.
  • There is no such thing as a good, secure method to store keys locally with your data. Just don’t do it.
  • Key management systems are now affordable and easy to deploy. We can prove it!

The California Consumer Privacy Act and subsequent laws change everything in terms of how we process and protect sensitive data. Encrypting that sensitive data, and protecting the encryption key, is not hard and is within reach of every business. 

Talk to us. We’ll show you how fast and easy it is to meet this part of the new CCPA and notification regulations.


P.S. I don’t mean to pick on Microsoft SQL Server here. The same issue applies to almost every commercial and open source relational and NoSQL database! 

Podcast: CCPA - What You Need to Know

Topics: Encryption Key Management, CCPA

2019 SQL Server Encryption Survey

Posted by Ken Mafli on Jan 15, 2020 6:00:00 AM

This last November (Nov. 6-8, 2019) we had a chance to participate in the 21st annual PASS Summit in Seattle as an exhibitor. It was a great time as SQL Server professionals from around the world attended. We had an opportunity to ask them about their company's encryption and key management practices. Below are the results as well as some expert weigh-in on the findings. Enjoy!

The SQL Server Encryption Survey—2019




A special thanks to our contributors for their expertise and guidance. You all are clear-minded professionals that have a lot to offer those looking to better secure their data:

-Ed Leighton-Dick, Kingfisher Technologies
-Tim Roncevich, CyberGuard Compliance
-Justin Garren, LyntonWeb
-Sharon Kleinerman, Townsend Security
-Patrick Townsend, Townsend Security

If you are looking to protect your encryption keys for your sensitive data in SQL Server, you need a FIPS 140-2 compliant centralized key manager that:

  • Never charges you additional fees for connecting a new end-point.
  • Never limits the number of end-points based on the model of the KMS.
  • Never limits the number of encryption keys generated or stored.
  • Never forces you to pay extra fees for software patches.
  • Never forces you to pay extra fees for routine software upgrades.
  • Always gives you unmatched customer service.
  • Always protects your keys, 24/7.

You need Alliance Key Manager for SQL Server.




Topics: Key Management, Extensible Key Management (EKM), SQL Server 2008, Microsoft, Info-graphic, SQL, Encryption Key Management, SQL Server, Transparent Data Encryption (TDE), SQL Server encryption

Living on the Edge

Posted by Luke Probasco on Dec 9, 2019 8:02:59 AM

As the world of edge computing becomes more distributed, billions of connected devices live on the edge, which need to be secured, managed and automated. For many businesses, this means deploying a VMware and cloud infrastructure and using VMware vSphere, for example, to encrypt private information.  While it is easy enough to encrypt data on the edge, key management has proven to be a challenge.

Podcast: Living on the EdgeI recently sat down with Patrick Townsend, Founder and CEO of Townsend Security to talk about deployments on the edge, achieving a strong security posture with key management, and other ways that businesses can better secure their private data. 

Patrick, Townsend Security has had key management solutions for VMware for a number of years. What is special about Edge computing?

Well, Edge computing is fascinating.  It isn’t really that different from how we currently think about computing and data security in the cloud or on-premise. By moving applications closer to the end user, Edge computing brings a better, faster user experience to the end user.  So, if you are running an application in the cloud, perhaps in a retail or healthcare environment, the delay over the network can degrade the experience or inhibit the ability to collect a lot of data, for example, from IoT devices. Edge computing is a natural evolution of making things more efficient with a better user experience.  However, Edge computing also brings new security challenges too. If we are collecting data that is sensitive in nature, it is just as sensitive out on the Edge as it is in our data center.

So what is special or different about Edge computing from a security point of view?

There are a number of challenges.  How do we deploy applications in a secure way?  How do we do application patching? One of the most important security efforts that we make is to keep everything patched and up to date.  When you have Edge computing, there are a lot more environments in distant locations. The security process really becomes more complex when we move to Edge computing.  Those challenges can be solved, but they represent things that we really need to pay attention to.

At the same time, as we are pushing applications out to the Edge, compliance regulations are getting more stringent.  Just look at the California Consumer Privacy Act (CCPA) and GDPR before it. Both of those are making the protection of sensitive data much more important.  The risks of data loss to an organization are escalating, and at the same time, we are pushing data to more and more places - so we have a big security challenge that we need to step up to.

Protecting data data in a centralized IT data center is a challenge, but one that we are used to.  Edge computing brings unique problems with it. For example, let’s say you pushed some data out to a dozen Edge computing environments.  You’ll need to encrypt that data to meet compliance, but where is the key manager? Is it back at your central on-site data center? If so, you may have just lost the advantage of pushing everything to the Edge.  Encryption and key management also need to be pushed out to the Edge in order to meet security best practices, just as you would in on-premise environments.

In terms of the cloud, can you give some examples of Edge environments?

Sure.  In the Cloud, we try to deploy applications close to the end-customer which gives us better response times and a better customer experience.  So, in AWS or Azure, we can move applications closer to where the end-customer lives. CSPs are making this easier by automating some of the deployment tasks.  By pushing applications to the Edge, you get really close to the physical location of the customer. For example, if you live in Sweden, you don’t need to connect to a key manager that is sitting back in Silicon Valley.  You should connect to a key manager that is near you. When moving to the Edge, encryption and key management need to move with you.  

By the way, you may have noticed that VMware has been working much more closely with Cloud Service Providers to provide true VMware infrastructure on cloud platforms.  For example, on Azure, you can deploy a full bare metal stack - VMware in the cloud and managed the way you want. But again, when you push those VMware environments to the Edge, what about the encryption key management?  The good news is, that with our new Alliance Key Manager for Edge Computing, we can make that easy and affordable to accomplish.

How about some examples of non-Cloud Edge environments?

Almost all of us use VMware on premise, and it isn’t really all that different to what we are currently doing.  Think of a medium or large retail organization with hundreds or thousands of storefronts. When you walk into the store, there is a very good chance that there is a local VMware node out there that is running many applications.  Think about a large box store with retail, pharmacy, and automobile services. The VMware environment in a single store might support dozens or hundreds of specialized applications. How do you protect data in that environment? Sometimes when we think of Edge computing we think of “just” the cloud, but this isn’t the case.  Again, just like with the Cloud, it doesn’t need to be difficult to push encryption and key management to the Edge, it just needs to get done.

How do compliance requirements impact Edge computing?

Well, compliance requirements, which are getting stronger as we speak, make the challenge of Edge computing even more important to address.  If you think about it, when we have centralized IT processing, we have one environment to protect. It may be a very data rich environment with sensitive data that cybercriminals may want to steal - but it something that isn’t that difficult to protect.  What if we have 500 of those environments out there across on-prem and cloud locations? The attack surface has been dramatically increased. The data is still important and still a target, but now we have a lot more to deal with. I think people are waking up to the security challenge and need to focus just as much effort on securing data at the Edge as we do at the centralized, on-premise data center.  We have to deploy all of our security defenses at the Edge in the same way that we do with core IT systems. The data is the same.

How is Townsend Security trying to help resolve this challenge.

The barriers to getting Edge data protection right are only party technical.  Key management vendors have not adapted to the new reality of the Edge. The huge expense of traditional KMS solutions is the primary barrier to protecting data at the Edge.  For small businesses, they can even be completely priced out of the market around doing encryption and key management right. Large organizations have been priced out as well.  When there are hundreds or thousands of endpoints that need protected, vendors need to step up to help these businesses secure their data.  

At Townsend Security, we have two distinct advantages.  First, our Alliance Key Manager for Edge Computing solution is virtualized, automated, and VMware Ready.  For example, our key management solution has been certified by VMware for vSphere key management - to protect VMs and vSAN storage.  We are seeing many organizations deploy VMware at the Edge. Second, we have the ability to flexibly license and price our solutions for the Edge.  Enterprises can now deploy full VMware VM encryption and key management at Edge with an affordable solution.

To hear this conversation in its entirety, download our podcast Living on the Edge and hear Patrick Townsend further discuss deployments on the edge, achieving a strong security posture with key management, and other ways that businesses can secure their private data.

Podcast: Living on the Edge

Topics: Encryption Key Management, Alliance Key Manager for Edge Computing

The Definitive Guide to AWS Encryption Key Management
Definitive Guide to VMware Encryption & Key Management


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