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Calculating the Cost of Full Disk Encryption

The price of FDE goes beyond hardware and software--but according to a recent study, the benefits far outweigh the costs.

Is full disk encryption (FDE) worth it? A recent study conducted by the Ponemon Institute shows that the expected benefits of FDE exceed cost by a factor ranging from four to 20, based on a reduction in the probability that data will be compromised as the result of the loss or theft of a digital device.

The report, "The TCO for Full Disk Encryption," was conducted independently by Ponemon and sponsored by WinMagic. The stated purpose of the study was to learn how organizations are deploying software and hardware FDE systems, as well as to determine the total cost of ownership of such deployments across different industries.

"Encryption is important to mitigating the damage caused by data breaches, complying with privacy and data protection regulations, and preserving brand and reputation," states the report. "In order to make rational decisions regarding the optimum use of encryption, it is important to comprehend the total cost of ownership (TCO). This particularly applies to solutions believed to be free but may have significantly higher TCO than commercial products."

Ponemon surveyed 1,335 people in IT and IT security in the U.S., the U.K., Germany and Japan. Respondents had an average of 10 years of relevant experience.

The study measured costs in 11 segments: licensing, maintenance, incremental costs, device pre-provisioning, device staging, tech time spent on password resets, end-user downtime spent during password resets, cost associated with re-imaging hard drives, end-user downtime associated with initial disk encryption, end-user time spent operating an FDE-enabled computer, and the value of tech time incurred for various administrative tasks related to encrypted drives. The TCO was the sum of each of these costs per computer for one full year.

While the study found that the benefits of full disk encryption generally exceed the cost in all four of the countries studied, TCO varied by organizational size and industry. In terms of company size, the TCO is highest for organizations with fewer than 50 employees ($403) and for companies with more than 25,000 employees ($315). Highly regulated industries such as finance and healthcare saw the highest TCO ($388 and $366, respectively), while less regulated industries saw lower TCO. For example, the TCO in entertainment and media was $201.

The study found that the most expensive element of FDE is not the hardware or software involved, but the value of user time it takes to start up, shut down and hibernate computing systems while using FDE. Also adding to the cost is the time it takes technicians to complete full disk encryption procedures. These costs must be taken into consideration, the report suggests, when considering the use of free FDE systems and those included with operating systems as opposed to commercial products.

To gauge the cost benefit of FDE, Ponemon looked at the average number of laptop or desktop computers stolen in the four countries studied, as well as the average number of records potentially at risk on lost or stolen devices.

After doing all of the math, Ponemon found that the cost of FDE on laptop and desktop computers in the U.S. per year was $235, while the cost savings from reduced data breach exposure was $4,650.

Next: The Why Behind Encryption

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