Enterprise use of encryption saw the largest increase over the past year in over a decade, according to a report released today by the Ponemon Institute.
But encryption technology spending as percent of total IT security budgets has gone down, said John Grimm, senior director of security strategy at Thales e-Security, which sponsored the report.
In 2005, the first year of the report, only 16 percent of enterprises were using encryption extensively. The percentage increased gradually to 34 percent last year, then jumped to 41 percent this year.
According to Grimm, encryption is now built into many tools, so enterprises don't have to buy it separately. In addition, competition and advances in technology has lowered prices for stand-alone products.
The financial sector was in the lead, with 56 percent of companies using encryption extensively, followed by the health care and pharmaceutical industry. Manufacturing lagged the furthest behind, at 25 percent.
When it came to specific applications, databases had the highest use of encryption technology, followed by Internet communications, laptop hard drives, and backups.
"This has to do with mature technology," Grimm said. "All the big databases have encryption built in, and on the Internet, SSL is ubiquitous."
And now that more people are using encryption in more places, performance is becoming more of an issue, he added.
It was the most-important feature when it comes to encryption technology, according to the survey, followed by support for both on-premises and cloud deployment.
"They don't want to have two sets of tools," he said. "They want it to be one and the same."
Email was just beyond the middle of the list, with public cloud services at the very end.
In fact, only 44 percent of organizations said that they protected data at rest in the cloud using encryption, 17 percent used tokenization or another method, and 39 percent stored the data in clear text.
Out of those companies that do protect data at rest in the cloud, 44 percent encrypt the data before it is sent to the cloud, 21 percent encrypt the data while it is in the cloud using tools under their control, and 35 percent allow the cloud provider to handle the encryption.
Enterprises are increasingly looking to cloud providers to protect their data, Grimm said.
"The major cloud providers have done a really good job at security and a lot of enterprises are looking at the cloud providers and seeing that the cloud providers have strong procedures, and are better set up from a skills perspective," he said. "And I think that's a trend that we'll continue to see."