Nevertheless, vendors are already anticipating a windfall. "We think this is a huge opportunity," says Scott Gordon, VP of marketing at NeoScale Systems. "Especially if other states start looking at this... We've already gotten sales-lead opportunities based on this."
But while storage security vendors may be happy with the new regulations, some observers say their enthusiasm is premature.
"School is still out on whether or not encryption is going to be more predominant in databases," says Doug Johnson, a senior analyst with the American Bankers Association, who adds that encryption can lead to a serious degradation of service. "I dont think encryption is going to be the initial inclination... Institutions are more likely to protect the entry to the data, rather than encrypt the data on the server."
If companies do decide that encrypting data is the best step to take to protect themselves from lawsuits, they will have a long line of products to choose from. Over the past month, several companies have launched new encryption products for storage networks:
So what encryption solution will companies choose? Observers note that the California law does not specify what level of encryption is required. And it's still too early to say which vendors are the most likely to benefit, according to Enterprise Storage Group Inc. senior analyst Nancy Marrone, who points out that the market is far from mature.
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