What is key management?

Encryption secures sensitive data by converting readable plaintext into unreadable ciphertext. Encryption keys are the cornerstone of data security within the encryption process. Anyone who possesses the keys can use them to convert encrypted data back into its original plaintext form.

If encryption keys are stolen or mishandled, unauthorized users can use the keys to access sensitive data. If keys are lost, even authorized users can permanently lose access to their data.

The result is that encryption is only as secure as its cryptographic keys.

Key management helps organizations keep encryption keys secure throughout their entire lifecycle, protecting data integrity and minimizing the risk of unauthorized access and data breaches. This encryption key lifecycle includes key generation, storage, distribution, usage, rotation and eventual destruction or revocation.

A key management system can help automate and enforce key policies, making the process even more efficient and reducing errors. It can help organizations strengthen data security, prevent unauthorized access and comply with regulatory standards.

Today, organizations increasingly prioritize encryption and key management to strengthen their cybersecurity. According to the Cost of a Data Breach report, organizations that use encryption can reduce the financial impact of a data breach by over USD 200,000.

Data is one of the most valuable assets for any organization. As the volume of sensitive data increases, so does the need to protect it against unauthorized access. According to the Cost of a Data Breach report, the global average data breach cost is USD 4.44 million.

For many organizations, encryption is one of the most effective measures to secure sensitive data. It applies the principles of cryptography to transform readable data into ciphertext by using cryptographic algorithms, making it inaccessible to unauthorized users.

The effectiveness of encryption relies not only on strong algorithms such as the Advanced Encryption Standard (AES) but also on the secure management of the encryption keys that lock and unlock the data.

This process isn’t always as easy as it might seem. Organizations must often manage thousands of encryption keys across different systems and environments, each at various stages of their lifecycle.

Encryption keys might need to be shared securely across departments or with external partners. This complexity can make it challenging to ensure that all keys are properly secured, tracked and maintained throughout their lifecycle.

Key management makes this process easier by centralizing key control, automating key lifecycle processes and providing robust monitoring and audit capabilities. It helps organizations ensure that encryption keys are consistently managed according to best practices and reduces the risk of key loss or misuse.

Without proper key management, organizations can risk effectively nullifying the benefits of encryption, potentially resulting in unauthorized access, data breaches and data loss.

For example, Microsoft recently disclosed that a China-backed hacking group had stolen a critical cryptographic signing key from its systems.¹ This key allowed threat actors to generate legitimate authentication tokens and access cloud-based Outlook email systems for 25 organizations, including multiple US government agencies.

Additionally, as new technologies emerge, the importance of robust key management continues to grow. For example, the advent of quantum computing poses a significant threat to current encryption algorithms, prompting organizations and experts to invest in quantum-resistant cryptographic techniques and key management systems.

Staying ahead of these developments and investing in advanced key management solutions and systems can help organizations ensure that their encryption practices remain future-proof and effective.

To understand the role of key management, consider the parallel of a safe and the code required to open it.

Just like a safe protects valuable items, encryption protects sensitive data. If the safe's code falls into the wrong hands, unauthorized people can open it and steal the contents. Similarly, if the code is lost or forgotten, the safe—and the valuable items inside—might be inaccessible forever.

In this analogy, the safe represents encrypted data, the code represents the encryption key and keeping the code secure represents key management.

In data encryption, there are different types of encryption keys, each associated with the two main encryption methods.

Symmetric encryption uses a single key to both encrypt and decrypt data. The security of this symmetric key is crucial because if it’s compromised, all encrypted data is at risk. Key management for symmetric encryption focuses on securely generating, storing and distributing the key, ensuring it’s accessible only to authorized users.

Asymmetric encryption uses a key pair: a public key for encryption and a private key for decryption. The public key can be shared openly, while the private key must remain confidential. This method enables some of the most secure cryptographic operations, including public key infrastructure (PKI), which supports functions such as authentication, digital signatures and secure key exchange.

In asymmetric encryption, key management involves securely generating keys, managing their storage, controlling access and regularly rotating keys to prevent breaches.

For both encryption methods, proper key management is essential for protecting data and maintaining the integrity of encryption systems.

Encryption key management consists of several stages, each critical to the security and effectiveness of encryption systems. These stages form the key management lifecycle, which covers the entire journey of a cryptographic key from its creation to its eventual destruction.

1. Key generation
2. Key distribution
3. Key storage
4. Key usage
5. Key rotation
6. Key revocation and destruction

Lifecycle management helps ensures that keys are securely handled at every stage, with specific controls in place to prevent unauthorized access and data breaches.

Key generation involves using a secure algorithm to create a cryptographic key, which is essentially a string of random or pseudorandom bits or numbers. Ensuring that keys are random and unpredictable helps mitigate weaknesses that can compromise the entire encryption process.

Hardware security modules (HSMs) and key management systems (KMS) can help generate keys in a secure environment. (For more information, see "Common key management solutions and technologies.")

After encryption keys are generated, they are distributed to the necessary entities. For example, a symmetric key might be created using a secure random number generator and then distributed securely through a key exchange protocol or a pre-shared channel.

Key distribution is particularly challenging for symmetric keys because they must always remain secret.

On the other hand, asymmetric key systems can mitigate security challenges by openly distributing public keys while keeping private keys secure. Secure distribution methods can also help ensure the safe transmission of keys, including using the Transport Security Layer (TLS) protocol.

Once users have encryption keys, secure key storage is essential for protecting them from unauthorized access. HSMs are a common choice for key storage because they provide a tamper-resistant environment and often meet strict security standards, such as FIPS 140-2 (Federal Information Processing Standard), which specifies the security requirements for cryptographic modules.

Storing keys in software might be more convenient, but it can also carry a higher security risk than hardware-based storage solutions like HSMs.

Keys can perform various cryptographic operations, such as encrypting data, signing documents or authenticating users. Using them strictly for their designated purpose helps mitigate security risks. Access controls such as role-based access control (RBAC) and multi-factor authentication (MFA) can help ensure only authorized individuals or systems have access to these keys, further securing their usage.

Key rotation involves periodically replacing old keys with new ones. Regular key rotation helps to reduce the risk of key compromise and limit potential damage if a key is exposed. Key management systems frequently feature automated key rotation for consistency and security.

When encryption keys are no longer needed or suspected of being compromised, revoking them prevents further use. Securely destroying them also helps eliminate any possibility of unauthorized users recovering and misusing them.

As encryption becomes indispensable to cybersecurity, key management grows increasingly important across industries.

Some of the most common use cases for key management include:

• Cloud key management
• Data protection in DevOps
• IoT security
• Compliance with regulatory standards

Several solutions and technologies are integral to implementing effective key management. These include:

• Hardware security modules (HSMs)
• Key management services (KMS)
• Open-source key management
• Key Management Interoperability Protocol (KMIP)

Some solutions, such as a key management service (KMS) and open-source key management tools, offer flexible and customizable options. Others are specialized technologies, such as hardware security modules (HSMs), or protocols, such as the Key Management Interoperability Protocol (KMIP).

While their capabilities vary, encryption key management solutions often include features such as:

• A centralized management console for encryption and encryption key policies and configurations.

• Encryption at the file, database and application levels for on-premises and cloud data.

• Role- and group-based access controls and audit logging to help address compliance.

• Automated key lifecycle processes.

• Integration with the latest technologies, such as artificial intelligence (AI), to improve key management by using analytics and automation.

HSMs are specialized devices that provide secure key management and cryptographic operations. These devices generate, store and manage cryptographic keys in a tamper-resistant environment, making them ideal for high-security applications, such as financial transactions, digital signatures and public key infrastructure (PKI) management.

CloudHSM services can extend these capabilities to the cloud, offering the same level of security for cloud-based environments. Organizations that need to meet strict compliance requirements, such as PCI DSS or GDPR, might choose HSM, knowing that keys never leave the secure environment.

Key management services are cloud-based solutions offered by third-party providers. These services manage the lifecycle of cryptographic keys, including generation, storage, rotation and destruction. Features like BYOK allow organizations to retain control over their encryption keys even when using third-party cloud services.

Key management services are often ideal for businesses that want to dynamically scale their key management needs without investing heavily in on-premises infrastructure. They can offer ease of use, scalability and integration with various cloud services.

Open-source key management solutions can provide flexible and transparent key management options. These solutions allow organizations to customize their key management practices and integrate them with their existing infrastructure, whether on-premises or in the cloud.

Open-source tools can benefit organizations that require high flexibility, want to avoid vendor lock-in or must ensure transparent security practices.

KMIP isn't a key management solution but a standardized protocol designed to facilitate the interoperability of key management systems across different platforms and providers.

Essentially, KMIP provides a common language for various key management systems to communicate and seamlessly operate together.

Adopting KMIP helps organizations ensure that their key management practices are consistent and secure, even in multicloud or hybrid cloud environments.

This standardization simplifies key management and supports a consistent security posture. It is crucial for organizations that use multiple key management solutions, work with data in disparate systems or need to switch providers.