Townsend Security Data Privacy Blog

With encryption and key management now being offered on a variety of hardware, virtualized, and cloud platforms, is it simply just a matter of preference or is one option better for you than another?  

Companies of all sizes now have options for securely protecting sensitive data using the appropriate security technology for their situation and industry regulations. Being responsible for the safekeeping of sensitive data like credit cards, social security numbers, or e-mail addresses, makes your encryption and key management strategy critically important. Once your sensitive data is encrypted, key managers are the specialized security devices that are designed to safeguard your encryption key (which is the secret that must be protected). Before deciding on how an enterprise should deploy an encryption key manager there are several questions to ask and factors to consider.

What different device options are available to organizations needing an encryption key manager?

Hardware Devices
Today we have many options for key management solutions, including the traditional key management hardware security module (HSM), which is now more cost effective and easy to deploy than it was even five years ago. HSMs are network attached in your data center and accessed when encryption keys are needed. If your company has a physical data center and the infrastructure to support it, an HSM can still be your most secure option.

Cloud-hosted HSM
The cloud-hosted key management HSM functions in much the same way as the traditional security device. However, you do not need to have the infrastructure of a physical data center in order deploy or maintain the cloud-based HSM since it is hosted by the cloud hosting provider.  Be aware of your cloud environment (is it shared or private?), and make sure to choose an option that provides real-time mirroring and redundant backups in geographically diverse locations.

Virtualization Options
Additionally it is now possible to deploy virtualized key management appliances. There is no hardware when you deploy a VMware or Hyper-v or Xen virtualized appliance inside your own virtualization infrastructure. A true cloud-based key management solution like VMware gives you a path to run key management solutions in vCloud either as standard cloud instance or virtual private clouds. Microsoft Azure and Amazon Web Service and other cloud platforms provide a mechanism for deploying virtualized key management appliances too.

What are some factors people need to consider when deciding which key management option is right for their organization?

Risk Tolerance
Risk tolerance is perhaps the main driving force for which of the key management options you might choose. If you're very risk-averse then probably you will want to deploy a hardware security module (HSM) in your own data center.  If you have a moderate level of risk tolerance  you might consider a cloud-based HSM hosted by a cloud vendor with appropriate security technology. A company dealing with small amounts of data might bear some additional risk and use a key management solution to help protect encryption keys in a virtual environment. Cloud or virtual solutions can be much more cost-effective and give enough protection for encryption keys to meet a lower risk tolerance level.

Compliance Regulations
Most compliance regulations give clear guidance on best practices about where encryption key management can and should run. Generally speaking, regulations are based on your industry and what type of sensitive data you store. 

PCI Security Standards Council has issued Cloud Computing Guidelines as well as guidance around virtualization of data protection solutions, so you can be PCI compliant with a cloud-based key management and encryption solution.

Cloud Security Alliance (CSA) has issued good guidance around key management and cloud environments - version 3.

Other regulations are not yet providing concrete guidance,and in some cases it is best to confirm with qualified auditors and assessors to really understand whether or not you can be in compliance and deploy true cloud-based virtualized key management solutions.

Infrastructure
Your key management options are also based on where your data is stored. If you don't have a traditional data center, for example if you are using a software as a service (SaaS) solution, you may not have your own IT infrastructure or personnel with which to deploy a traditional encryption key management HSM internally. So the physical and organizational structure will come to bear in terms of the choices that you have around deploying key management.

Cost
Budget is always an important factor. As you consider various options, ask about endpoint licensing fees and make sure you have predictable maintenance costs as more databases/applications request key access. Remember to consider the costs of not properly managing sensitive data when doing the security cost benefit analysis.

Whatever option you choose, it is always wise to use key management best practices:

• Always separate the encryption keys from the protected data
• Use dual control
• Practice separation of duties
• Manage key rotation
• Look for NIST validations like FIPS 140-2

Please download our most recent podcast on Encryption Key Management Options to hear more about how to meet the challenges of running cloud or virtual applications where implementations are inherently shared, multi-tenant environments!

Customers moving to a hosting provider or cloud provider are often confused about PCI DSS compliance regulations, and what their responsibilities are in that environment. Some companies feel that they can avoid compliance concerns by moving to a cloud service. Some feel that they are no longer under compliance regulations at all in that environment. I heard this comment just this week:

“I don’t need to worry about compliance because my hosting provider says they are PCI compliant.”

This is dangerously wrong.  Let’s sort this out.

First, hosting providers who say they are PCI compliant are usually talking about their own systems, not about yours. Their credit card payment application is PCI compliant, they run the required vulnerability assessments on their payment processing applications, they collect system logs, and so forth. All of these things are required by the hosting or cloud provider for their own systems to be PCI compliant. They aren’t talking about your applications and data.

This does not make you automatically PCI compliant when you use their platforms or applications. You still bear the responsibility for meeting PCI compliance in your applications. Regardless of the hosting or cloud implementation (Infrastructure-as-a-Service, Platform-as-a-Service, Software-as-a-Service, or a hybrid approach), you are always responsible for PCI compliance of your data.

What does the PCI Security Standards Council (PCI SSC) say about cloud environment?

The hosted entity (you) should be fully aware of any and all aspects of the cloud service, including specific system components and security controls, which are not covered by the provider and are therefore the entity’s responsibility to manage and assess.

And,

These challenges may make it impossible for some cloud-based services to operate in a PCI DSS compliant manner. Consequently, the burden for providing proof of PCI DSS compliance for a cloud-based service falls heavily on the cloud provider, and such proof should be accepted (by you) only based on rigorous evidence of adequate controls.

As with all hosted services in scope for PCI DSS, the hosted entity (you) should request sufficient assurance from their cloud provider that the scope of the provider’s PCI DSS review is sufficient, and that all controls relevant to the hosted entity’s environment have been assessed and determined to be PCI DSS compliant.

Simply put, you are responsible for understanding which parts of PCI compliance a cloud vendor can help you with, and which parts they can’t.

There is no cloud implementation that relieves you of the responsibility of protecting your data. See section 4.3 in this PCI guidance.

What does this mean from a practical point of view?

This means that you must meet all of the PCI DSS requirements for your cloud implementation. You may be able to take advantage of some PCI compliant services provided by the hosting or cloud vendor, but you must have the cloud vendor provide you with guidance, documentation, and certification.  You are not off the hook for responsibility in these areas.

Please note the chart on page 23 of the PCI cloud guidance. There is no hosting or cloud implementation that covers your data. You are always responsible for protecting your customer’s cardholder data. This means complying with PCI DSS Section 3 requirements to encrypt the data and protect the encryption keys.

There is no magic bullet. You have to do this work.

Living through a data breach is no fun, and I would not wish this experience on anyone. In hosted and cloud environments, ignorance is not bliss.

Stay safe.  For more information, download our whitepaper Meet the Challenges of PCI Compliance and learn more about protecting sensitive data to meet PCI compliance requirements.

Patrick