Ponemon Institute Unveils Second Annual Study on Enterprise Encryption Trends in United Kingdom

60 percent of U.K. organizations experience a data breach, 49 percent of organizations expect to deploy a single enterprise-wide key management solution in 2008

London / 22 April, 2008 – PGP Corporation, a global leader in enterprise data protection, today announced the results from a second annual study by The Ponemon Institute© identifying key areas of focus in enterprise encryption usage, planning strategies, budgeting and spending, deployment methodologies, and impact on data breach incidents. With the impact of widely publicised data breaches in the UK over the past year, UK enterprises are turning to encryption solutions to address compliance and brand protection. The key findings of the 2008 Annual Study: U.S. Enterprise Encryption Trends demonstrate organisations continue to move towards a more strategic approach to encryption including a larger focus on key management, especially those companiess identified as having the most effective IT organisations.

The study also shows that 60 percent of organisations surveyed suffered at least one data breach over the last 12 months with 28 percent of organisations suffering two to five breaches during the same time period. However, an emerging trend appears to show that organisations with an enterprise encryption strategy lowering the rate of data breaches. This demonstrates that an encryption strategy, especially one implemented across the enterprise, can reduce the costs and brand damage associated with data breaches and likely leads to a more profitable business.

The study of nearly 650 U.K.-based IT and business managers, analysts and executives (51 percent at the director or VP level), identifies a new trend that shows organisations with a more strategic, enterprise-wide approach to encryption have experienced fewer data breaches. In response to increasing demands for data security, 15 percent of organisations surveyed now have an encryption strategy applied consistently across the organisation, up from 9 percent in 2007.

"This study continues to break new ground in identifying enterprise IT security trends," said Dr. Larry Ponemon, chairman and founder of The Ponemon Institute. "Businesses in the U.K. have grappled with the new realities of data breaches over the past 12 months. In response, organisations are spending significant portions of their encryption budgets on key management and are looking for more complete solutions from a single vendor instead of point products. With more organisations experiencing data breaches, those who deploy a strategic encryption solution, like the PGP® Encryption Platform, reduce their risk."

Other key findings in this year’s research include:

• Encryption use across multiple applications grows. Respondents reported the consistent encryption of laptops, emails, file servers, and backup tapes increased. In the wake of publicised data breaches, tape backup encryption is the most common, with 13 percent reporting use most of the time. Laptop encryption used most of the time in organisations grew to 12%, up from 10% in 2007.
  • During the last 12 months, organisations shifted their reasons for using encryption dramatically: the use of encryption to comply with privacy and data security regulations increased from just 17% of those surveyed in 2007 to 58% in 2008.
• Key management is more frequently budgeted for in 2008 as organizations seeking to reduce operational costs prefer to choose just one enterprise vendor. Organisations surveyed on average plan to spend 33 percent of their total encryption budget on key management solutions:
  • 51 percent of organisations expect their key management investments to reduce the overall operational costs of enterprise data protection.
  • 49 percent of organisations expect to deploy a single enterprise-wide key management solution or deploy a single vendor’s key management solution for different purposes in 2008.
  • Only 24 percent of organisations are seeking a tactical key management solution for just one encryption application.
• Organisations more interested in a platform approach. With a need to enforce policy and increase automation for key management, respondents were overwhelmingly interested in a platform approach; at least 52 percent rating five fundamental characteristics of the PGP® Encryption Platform approach as important or very important. Respondents believe a platform approach enables their business to reduce expenses and improve productivity and identified these top three benefits of this approach:
  • Supports development of a strategic encryption strategy (59 percent of respondents)
  • Reduces operational costs (56 percent)
  • Eliminates redundant administrative tasks (52 percent)

Finding that organisations with enterprise-wide encryption strategies are reducing the risk of data breaches and organisations overwhelming prefer a platform approach to encryption is significant in the evolution of data security. The increased interest in automated policy enforcement, single administration interface, and comprehensive key management continue to favour adoption of an encryption platform solution. The preference for adopting this approach to managing multiple encryption applications from a single console continues to mirror the progression seen with other important enterprise applications such as ERP and CRM.

Recent research conducted by the Ponemon Institute found the cost of a data breach in the U.K. to average £47 per record compromised or an average total of £1.4 million per breach.

"This study reaffirms what we’ve been telling our customer for a long time - a strategic encryption strategy defends an organisation’s data more effectively than assembling point encryption products," said Phillip Dunkelberger, President and CEO of PGP Corporation. "The results continue to show that the most effective enterprises are seeking a platform approach to encryption."

In March, The Ponemon Institute published the second annual report covering Encryption Trends in the United States. The Ponemon Institute is also conducting a second annual report for Germany and will conduct first time research in Australia. These reports will be available later this year.

For more information or to receive a copy of this study, visit: http://www.pgp.com/downloads/research_reports/index.html

About The Ponemon Institute
The Ponemon Institute© is dedicated to advancing responsible information and privacy management practices in business and government. To achieve this objective, the Institute conducts independent research, educates leaders from the private and public sectors and verifies the privacy and data protection practices of organizations in a variety of industries.

About PGP Corporation
PGP Corporation is a global leader in email and data encryption software for enterprise data protection. Based on a unified key management and policy infrastructure, the PGP® Encryption Platform offers the broadest set of integrated applications for enterprise data security. PGP® platform-enabled applications allow organizations to meet current needs and expand as security requirements evolve for email, laptops, desktops, instant messaging, smartphones, network storage, file transfers, automated processes, and backups.

PGP® solutions are used by more than 80,000 enterprises, businesses, and governments worldwide, including 95 percent of the Fortune® 100, 75 percent of the Fortune® Global 100, 87 percent of the German DAX Index, and 51 percent of the U.K. FTSE 100 Index. As a result, PGP Corporation has earned a global reputation for innovative, standards-based, and trusted solutions. PGP solutions help protect confidential information, secure customer data, achieve regulatory and audit compliance, and safeguard companies’ brands and reputations. Contact PGP Corporation at www.pgp.com.

Media & analyst contact for PGP Corporation:
U.K.:
Jacqui Depares / Richard Scarlett
Johnson King
+44 (0) 20 7401 7968
pgpteam@johnsonking.co.uk

Germany:
Ingrid Daschner
Johnson King
+49 (0) 89 8940 8511
ingridd@johnsonking.de

North America:
Tom Rice
Merritt Group
+1 703 856 2218
rice@merrittgrp.com

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