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  • ALIF Consulting

Data encryption models

Updated: Nov 21

About Alif : Alif empowers Microsoft MSP-CSP partners to provide exceptional IT services to their clients to ensure that the partners reduce their costs and focus on their business. We provide white-labelled managed services for technologies like Microsoft Azure, Microsoft 365, Microsoft Dynamics 365, Microsoft Security, SharePoint, Power Platform, SQL, Azure DevOps and a lot more. Our headquarter is in Pune, India whereas we work with over 50 partners across the globe that trust us with their client delivery.


An understanding of the various encryption models and their pros and cons is essential for understanding how the various resource providers in Azure implement encryption at Rest. These definitions are shared across all resource providers in Azure to ensure common language and taxonomy.

There are three scenarios for server-side encryption:

  • Server-side encryption using Service-Managed keys

o Azure Resource Providers perform the encryption and decryption operations

o Microsoft manages the keys

o Full cloud functionality

  • Server-side encryption using customer-managed keys in Azure Key Vault

o Azure Resource Providers perform the encryption and decryption operations

o Customer controls keys via Azure Key Vault

o Full cloud functionality

  • Server-side encryption using customer-managed keys on customer-controlled hardware

o Azure Resource Providers perform the encryption and decryption operations

o Customer controls keys on customer-controlled hardware

o Full cloud functionality

Server-side Encryption models refer to encryption that is performed by the Azure service. In that model, the Resource Provider performs the encrypt and decrypt operations. For example, Azure Storage may receive data in plain text operations and will perform the encryption and decryption internally. The Resource Provider might use encryption keys that are managed by Microsoft or by the customer depending on the provided configuration.


Each of the server-side encryption at rest models implies distinctive characteristics of key management. This includes where and how encryption keys are created, and stored as well as the access models and the key rotation procedures.

For client-side encryption, consider the following:

  • Azure services cannot see decrypted data

  • Customers manage and store keys on-premises (or in other secure stores). Keys are not available to Azure services

  • Reduced cloud functionality

The supported encryption models in Azure split into two main groups: "Client Encryption" and "Server-side Encryption" as mentioned previously. Independent of the encryption at rest model used, Azure services always recommend the use of a secure transport such as TLS or HTTPS. Therefore, encryption in transport should be addressed by the transport protocol and should not be a major factor in determining which encryption at rest model to use.


Client encryption model

Client Encryption model refers to encryption that is performed outside of the Resource Provider or Azure by the service or calling application. The encryption can be performed by the service application in Azure, or by an application running in the customer data center. In either case, when leveraging this encryption model, the Azure Resource Provider receives an encrypted blob of data without the ability to decrypt the data in any way or have access to the encryption keys. In this model, the key management is done by the calling service/application and is opaque to the Azure service.


Server-side encryption using service-managed keys

For many customers, the essential requirement is to ensure that the data is encrypted whenever it is at rest. Server-side encryption using service-managed Keys enables this model by allowing customers to mark the specific resource (Storage Account, SQL DB, etc.) for encryption and leaving all key management aspects such as key issuance, rotation, and backup to Microsoft. Most Azure services that support encryption at rest typically support this model of offloading the management of the encryption keys to Azure. The Azure resource provider creates the keys, places them in secure storage, and retrieves them when needed. This means that the service has full access to the keys and the service has full control over the credential lifecycle management.




Server-side encryption using service-managed keys therefore quickly addresses the need to have encryption at rest with low overhead to the customer. When available a customer typically opens the Azure portal for the target subscription and resource provider and checks a box indicating, they would like the data to be encrypted. In some Resource Managers server-side encryption with service-managed keys is on by default.

Server-side encryption with Microsoft-managed keys does imply the service has full access to store and manage the keys. While some customers may want to manage the keys because they feel they gain greater security, the cost and risk associated with a custom key storage solution should be considered when evaluating this model

Key access

When Server-side encryption with service-managed keys is used, the key creation, storage, and service access are all managed by the service. Typically, the foundational Azure resource providers will store the Data Encryption Keys in a store that is close to the data and quickly available and accessible while the Key Encryption Keys are stored in a secure internal store.

Advantages

  • Simple setup

  • Microsoft manages key rotation, backup, and redundancy

  • Customer does not have the cost associated with implementation or the risk of a custom key management scheme.

Disadvantages

  • No customer control over the encryption keys (key specification, lifecycle, revocation, etc.)

  • No ability to segregate key management from overall management model for the service


Server-side encryption using customer-managed keys in Azure Key Vault


For scenarios where the requirement is to encrypt the data at rest and control the encryption keys customers can use server-side encryption using customer-managed Keys in Key Vault


Loss of key encryption keys means loss of data. For this reason, keys should not be deleted. Keys should be backed up whenever created or rotated. Soft-Delete and purge protection must be enabled on any vault storing key encryption keys to protect against accidental or malicious cryptographic erasure. Instead of deleting a key, it is recommended to set enabled to false on the key encryption key. Use access controls to revoke access to individual users or services in Azure Key Vault or Managed HSM.


Key Access

The server-side encryption model with customer-managed keys in Azure Key Vault involves the service accessing the keys to encrypt and decrypt as needed. Encryption at rest keys are made accessible to a service through an access control policy. This policy grants the service identity access to receive the key

For operations using encryption keys, a service identity can be granted access to any of the following operations: decrypt, encrypt, unwrapKey, wrapKey, verify, sign, get, list, update, create, import, delete, backup, and restore.

To obtain a key for use in encrypting or decrypting data at rest the service identity that the Resource Manager service instance will run as must have UnwrapKey (to get the key for decryption) and WrapKey (to insert a key into key vault when creating a new key).

Advantages

  • Full control over the keys used – encryption keys are managed in the customer's Key Vault under the customer's control.

  • Ability to encrypt multiple services to one master

  • Can segregate key management from overall management model for the service

  • Can define service and key location across regions

Disadvantages

  • Customer has full responsibility for key access management

  • Customer has full responsibility for key lifecycle management

  • Additional Setup & configuration overhead


Server-side encryption using customer-managed keys in Customer-controlled hardware


Some Azure services enable the Host Your Own Key (HYOK) key management model. This management mode is useful in scenarios where there is a need to encrypt the data at rest and manage the keys in a proprietary repository outside of Microsoft's control. In this model, the service must retrieve the key from an external site. Performance and availability guarantees are impacted, and configuration is more complex


Key Access

When server-side encryption using service-managed keys in customer-controlled hardware is used, the keys are maintained on a system configured by the customer. Azure services that support this model provide a means of establishing a secure connection to a customer supplied key store.

Advantages

  • Full control over the root key used – encryption keys are managed by a customer provided store

  • Ability to encrypt multiple services to one master

  • Can segregate key management from overall management model for the service

  • Can define service and key location across regions

Disadvantages

  • Full responsibility for key storage, security, performance, and availability

  • Full responsibility for key access management

  • Full responsibility for key lifecycle management

  • Significant setup, configuration, and ongoing maintenance costs

  • Increased dependency on network availability between the customer datacenter and Azure datacenters.



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