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2014: The year of encryption

By Paul Rubens Technology reporter

"The solution to government surveillance is to encrypt everything."

So said Eric Schmidt, Google's chairman, in response to revelations about the

activities of the US National Security Agency (NSA) made by whistle-blower

Edward Snowden.

Schmidt's advice appears to have been heeded by companies that provide

internet-based services.

Microsoft, for instance, says it will have "best-in-class industry

cryptography" in place for services including Outlook.com, Office 365 and

SkyDrive by the end of the year, while Yahoo has announced plans to encrypt all

of its customers' data, including emails, by the end of the first quarter of

2014.

For many smaller businesses too, 2014 is likely to be the year of encryption.

That's certainly the view of Dave Frymier, chief information security officer

at Unisys, a Pennsylvania-based IT company.

But he believes the driving force for this will be different: not government

surveillance programmes, but the threat of attacks from hackers.

Diamonds and paperclips

Rather than encrypting everything, Mr Frymier advocates that companies identify

what he believes is the 5%-15% of their data that is really confidential, and

use encryption to protect just that.

He says employees should then be barred from accessing this data using standard

desktop and laptop machines or their own smartphones or tablets, which can

easily be infected with malware. Access would be restricted to employees using

secure "hardened" computers.

Dave Frymier Dave Frymier from Unisys says the threat posed by hackers will

drive firms to invest in encryption

"When you look at the increasing sophistication of malware, it becomes apparent

that you need to establish highly protected enclaves of data. The only way to

achieve that is through modern encryption, properly implemented," says Mr

Frymier.

"You can split your data into diamonds and paperclips, and the important thing

is to encrypt the diamonds, and not to sweat the paperclips."

Prakash Panjwani, a general manager at Maryland-based data protection company

Safenet, also believes that the large number of high-profile data breaches in

2013 - including hacker attacks on US retailer Target, software maker Adobe,

and photo messaging service Snapchat - means that 2014 will inevitably be a

bumper one for encryption vendors.

"Snowden has focused attention on surveillance issues, but the real threat is

organised crime and the number of data breaches that are occurring," he says.

"Companies are going to come under extreme pressure from boards, customers and

regulators in 2014 to take action so that if there is a data breach they can

say, 'We didn't lose any data because it was encrypted.'"

Keeping the regulator happy

A large number of companies already use encryption to protect the data they

store on their own systems "at rest", as well as data "in flight" as it is sent

over networks to customers, other data centres, or for processing or storage in

the cloud.

Hacking for password Using a longer encryption key will make it harder for

hackers to access your data

But Ramon Krikken, an analyst at Gartner, believes that the way encryption is

used by many of these companies is likely to change in 2014.

"Companies are certainly going to have to take encryption more seriously thanks

to the Snowden revelations," he says.

"At the moment many companies are using encryption for compliance reasons, not

for security. They are not using it to protect their data, but because it is

the easiest way to comply with regulations: encryption is the auditor's and the

regulator's favourite check box item."

'Back doors'

Start Quote

You have to decide who you trust, and find out where the vendor gets all the

parts of its product from

Ramon Krikken Gartner analyst

One question that companies will need to consider is which encryption algorithm

or cipher to use to best encrypt their data. It's an important question as some

older ciphers can now be "cracked" relatively quickly using the computing power

in a standard desktop PC.

And there is a question mark over whether the NSA may have deliberately used

its influence to weaken some encryption systems - or even to introduce "back

doors" that provide easy access to encrypted data to anyone who knows of their

existence.

"The problem is that even if you can inspect the source code, it is certainly

not a given that you would be able to spot a back door," Mr Krikken says.

Edward Snowden US whistle-blower Edward Snowden's revelations have made

companies take encryption more seriously

He believes it is more important to establish where all the parts of an

encryption solution come from.

Start Quote

No-one ever got fired for having encryption that was too strong

Robert Former Neohapsis

"If you procure software or hardware from overseas, from a country with a

government which does not have your best interests at heart, you need to

remember that it may not be as secure as you think," Mr Krikken says.

"So you have to decide who you trust, and find out where the vendor gets all

the parts of its product from."

Don't be cheap

Another thing companies need to consider when they implement encryption is how

strong the encryption should be. Using a longer encryption key makes it harder

for hackers or governments to crack the encryption, but it also requires more

computing power.

But Robert Former, senior security consultant for Neohapsis, an Illinois-based

security services company, says many companies are overestimating the

computational complexity of encryption.

"If you have an Apple Mac, your processor spends far more time making OS X

looks pretty than it does doing crypto work."

He therefore recommends using encryption keys that are two or even four times

longer than the ones many companies are currently using.

"I say use the strongest cryptography that your hardware and software can

support. I guarantee you that the cost of using your available processing power

is less than the cost of losing your data because you were too cheap to make

the crypto strong enough," he says.

"No-one ever got fired for having encryption that was too strong."