It's 10 p.m. Do You Know Where Your Laptop Is?

And things are expected to heat up even more for full-disk encryption in the near future. "Most of the current market is still at the high end, but things will get a lot hotter among smaller clients in the coming months," says Andy Solterbeck, vice president and general manager of SafeNet's Commercial Enterprise business unit.

A Perfect Storm
Several different factors appear to be driving the market for full-disk encryption, the most important of which has been a rash of high-profile laptop thefts. In May 2005, a theft at University of California Berkeley exposed 98,000 student and alumni records. A March 2006 theft at Fidelity Investments exposed 196,000 retirement plan records, and a May 2006 Ernst & Young theft exposed 243,000 customer audit records.

Those incidents make for very dramatic media coverage; they also sensitize corporate decision-makers to potential risk, clearly illustrating the threat in concrete, specific terms.

"The lost VA records triggered a big epiphany in the enterprise space," Hoban says. "Suddenly everyone was asking, 'What if this happened to me?'"

New legal reporting requirements are another factor. As of January 1, 34 states had statutes requiring public disclosure of a security breach that exposes customers' personal information. Viewed in light of press coverage about the wave of laptop thefts, these laws effectively guarantee major PR costs for any such incident, but most have "safe harbor" provisions that allow companies to withhold disclosure if the data in question is encrypted.

"Negative PR and regulatory requirements are always the biggest motivator," says Bob Egner, vice president of product management and global marketing at Pointsec.

Eggebrecht notes that "[encryption] technology has matured a lot over the past 12 to 24 months. A lot of the technical hurdles have been cleared, so the vendors are now focusing on deployment, management and user experience as differentiators."

Historically, full-disk encryption has been hamstrung by significant performance lags resulting from the processing overhead necessary to run constant encryption and decryption operations. Streamlined software implementation and faster hardware have made impressive inroads on this front, such that vendors today regularly report performance degradation of less than 3 percent, at least on their own benchmark tests.

Similarly, vendors have mitigated problems with data corruption by implementing "interruptible encryption" processes that allow the full-disk encryption system to resume after a system crash or hardware failure.

The Microsoft FactorMicrosoft recently moved into the space by integrating its Trusted Platform Module-based BitLocker disk-encryption product into the Enterprise and Ultimate Windows Vista editions. Though not a full-disk encryption package, strictly speaking, BitLocker does employ a preboot environment to enable encryption of the drive partition that contains the OS; on a multipartition drive, other partitions would remain unencrypted.

While Microsoft is certainly in a position to alter the full-disk encryption market dramatically, it's unclear whether the software vendor is positioning BitLocker to compete head-to-head with current standalone products.

BitLocker may represent an experimental 1.0 product, but Microsoft may also be interested in providing tools for other full-disk encryption developers to work with.

"We encourage third parties to build solutions on BitLocker," a Microsoft spokesperson says. "We exposed the BitLocker functionality through the Windows Management Instrumentation interface, and several partners are integrating BitLocker support into their own solutions."

NEXT: Four things to know about encryption. before you deploy