2014: The year of encryption

"The solution to government surveillance is to encrypt everything."

So said Eric Schmidt, Google's chairman, in response to revelations about the activities of the US National Security Agency (NSA) made by whistle-blower Edward Snowden.

Schmidt's advice appears to have been heeded by companies that provide internet-based services.

Microsoft, for instance, says it will have "best-in-class industry cryptography" in place for services including Outlook.com, Office 365 and SkyDrive by the end of the year, while Yahoo has announced plans to encrypt all of its customers' data, including emails, by the end of the first quarter of 2014.

For many smaller businesses too, 2014 is likely to be the year of encryption. That's certainly the view of Dave Frymier, chief information security officer at Unisys, a Pennsylvania-based IT company.

But he believes the driving force for this will be different: not government surveillance programmes, but the threat of attacks from hackers.

Diamonds and paperclips

Rather than encrypting everything, Mr Frymier advocates that companies identify what he believes is the 5%-15% of their data that is really confidential, and use encryption to protect just that.

He says employees should then be barred from accessing this data using standard desktop and laptop machines or their own smartphones or tablets, which can easily be infected with malware. Access would be restricted to employees using secure "hardened" computers.

"When you look at the increasing sophistication of malware, it becomes apparent that you need to establish highly protected enclaves of data. The only way to achieve that is through modern encryption, properly implemented," says Mr Frymier.

"You can split your data into diamonds and paperclips, and the important thing is to encrypt the diamonds, and not to sweat the paperclips."

Dave Frymier from Unisys says the threat posed by hackers will drive firms to invest in encryption

Prakash Panjwani, a general manager at Maryland-based data protection company Safenet, also believes that the large number of high-profile data breaches in 2013 - including hacker attacks on US retailer Target,software maker Adobe, and photo messaging service Snapchat - means that 2014 will inevitably be a bumper one for encryption vendors.

"Snowden has focused attention on surveillance issues, but the real threat is organised crime and the number of data breaches that are occurring," he says.

"Companies are going to come under extreme pressure from boards, customers and regulators in 2014 to take action so that if there is a data breach they can say, 'We didn't lose any data because it was encrypted.'"

Keeping the regulator happy

A large number of companies already use encryption to protect the data they store on their own systems "at rest", as well as data "in flight" as it is sent over networks to customers, other data centres, or for processing or storage in the cloud.