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Encryption Challenges and Trends in the Digital Era

cloud based key management challenges and trends

Rapid digital transformation, interconnectivity of devices, and data proliferation have significantly broadened the cyber threat landscape. With advancements in AI technologies, threat actors are launching cyberattacks with increasing ease and sophistication.

Millions of cyberattacks are recorded yearly, affecting roughly 50% of organizations, with an estimated average data breach cost reported at over 4 million USD. Many cybersecurity thought leaders and industry analysts repeat the phrase, “It’s not a matter of if, but when,” you will be breached.

This requires fundamental thinking beyond conventional perimeter defense systems such as firewalls and antivirus software. Real protection comes from hardware-based cryptography, where keys are stored behind physically-protected boundaries, and cryptographic operations are run within secure environments. Hardware-based cryptography can be a complex subject, and it’s not uncommon for organizations to encounter stumbling blocks on their journey toward strong cryptographic infrastructure.

However, data encryption is easier said than done. Here are four key challenges that organizations face when implementing encryption solutions.

1. Deployment complexities

Encrypting data is only the first step towards data protection. Equally important is safeguarding and managing the encryption keys.

One of the most widely used approaches to protecting encryption keys is implementing hardware-based cryptographic solutions like hardware security modules (HSMs)

HSMs are tamper-resistant devices that handle key generation, encryption, and decryption – all within a secure, standalone environment.  The popularity of HSMs is reflected in a Statista report highlighting that over 47% of the surveyed organizations said they use HSMs to secure their apps.

However, one of the primary challenges is finding the right HSM solution that seamlessly integrates with an organization’s existing infrastructure. Since different IT environments require customized configurations, the HSM must be compatible with diverse software and network settings to function effectively.

2. Cost efficiency

The financial implications of deploying HSMs go beyond their initial purchase price. The total cost of ownership (TCO) includes the upfront cost of purchasing the hardware, the recurring maintenance costs, and compliance-related expenses, like audits and certification renewals.

These multifaceted expenses necessitate careful planning when choosing a viable, long-lasting cryptographic solution.

3. Scalability and flexibility

As organizations grow, so do their data protection requirements. The increasing volume and complexity of data necessitate a scalable solution.

The right encryption solution must handle this growth, seamlessly supporting additional capacity and with minimal productivity impact.

Furthermore, flexibility is crucial. The encryption solution should adapt to ever-changing security landscapes, accommodating new encryption standards, regulatory requirements, and technological advancements.

4. Regulatory compliance

Data protection compliance is a dynamic field that varies with geographical regions and industry-specific mandates.

Organizations must adhere to HIPAA, CCPA, and NIST in the US, GDPR and ETSI in the EU, and ISO/IEC 27107 standards globally for cloud services. The same applies to sector-specific compliances like SOX and PCI DSS that apply to the finance industry.

Navigating this ever-evolving regulatory landscape and choosing a fully compliant HSM is a perennial challenge for security professionals.

HSM Trends

Trend 1: Reduced Management Overhead with Cloud HSMs

Organizations moving their workloads to the cloud are eager to explore cloud-based encryption solutions to protect their sensitive data. For such organizations, cloud HSMs are an ideal fit.

Cloud HSMs are like Swiss Army knives. They encrypt data, create and distribute the keys, establish public key infrastructure (PKI) and certificate authority (CA) for digital signing, and more. All this is achieved while securely storing the keys in HSMs deployed in local data centers. Cloud HSMs offer the same security and functionality as on-premises HSMs. However, they are managed virtually through web interfaces instead of on-premises.

Trend 2: OPEX over CAPEX Offers Flexibility and Faster Deployment

Another reason behind the rising popularity of cloud HSMs is their fast deployment time and low operational costs. Unlike on-premises HSMs that need to be physically delivered and installed at an organization’s location, cloud HSMs can be deployed remotely within no time.

The same applies to HSM maintenance. While on-premises HSMs must be physically maintained, cloud HSMs can be easily maintained remotely.

Trend 3: Enhanced Cloud Key Management

Then comes cloud key management. With over 54% of the organizations surveyed by Statista revealing that they struggle to manage their cloud keys, cloud HSMs with integrated key lifecycle management functionalities offer an added advantage.

Every organization that deals with sensitive information needs encryption, especially organizations with multiple business applications. HSMs handle encryption and store encryption keys within physically secure hardware. Storing keys in tamper-resistant hardware protects the encrypted data those keys helped encrypt. After those keys are stored, they need to be managed so that they can be rotated, distributed, and retired at the appropriate time.

It’s like planting a garden: after planting the seeds, they have to be watered; as the plants grow, they need care. Cryptographic infrastructure is much the same: after deploying hardware-based encryption to protect keys, the keys must be managed effectively in order to remain secure.

Organizations without the expertise or personnel to perform key management on-premises are well served by cloud key management solutions, such as bring-your-own-key (BYOK), external key management, and client-side encryption.


Encryption mechanisms are getting increasingly complex in the face of evolving cyber threats. From key security and management to navigating complex regulatory landscapes, the road to comprehensive data protection is anything but straightforward.

Cloud key management solutions are gaining traction across diverse industries due to their versatile use cases. With business applications using an increasing volume of encryption keys, efficiently managing these keys becomes crucial. Cloud key management solutions help organizations streamline their key management process by managing key rotation policies, enforcing access controls, establishing PKI and CA, and performing other essential functions.

To learn how to manage your cryptographic workloads in the cloud better, download your copy of the Mastering Cloud-based Key Management eBook.


How do HSMs overcome integration challenges across varied software and network setups in diverse IT environments?

HSMs address integration challenges by being tamper-resistant devices that operate within secure, standalone environments. They handle key generation, encryption, and decryption. The compatibility with diverse software and network settings is achieved through customization, allowing HSMs to work effectively in various IT environments.

What factors beyond purchase price should organizations consider for the total cost of ownership (TCO) of hardware-based cryptographic solutions?

Organizations should consider recurring maintenance costs, compliance-related expenses (such as audits and certification renewals), and any additional costs associated with the hardware deployment. Careful planning is necessary to choose a cryptographic solution that is both financially viable and ensures long-term security, taking into account the full spectrum of expenses involved in the TCO.

How can organizations ensure effective cloud key management to address encryption key challenges, given that over 54% struggle with this aspect?

Cloud key management solutions, particularly cloud HSMs with integrated key lifecycle management functionalities, offer advantages in handling the challenges of managing encryption keys in the cloud. These solutions streamline key management processes, including rotation policies, access controls, and other essential functions. They provide a virtual interface for easy management and help address the common struggle organizations face in effectively managing encryption keys in a cloud environment.

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For over 40 years, Futurex has been a trusted provider of hardened, enterprise-class data security solutions. More than 15,000 organizations worldwide have used Futurex’s innovative hardware security modules, key management servers, and cloud HSM solutions to address mission-critical data encryption and key management needs.

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