Hardware Security Modules (HSMs) have not substantially evolved in the last two decades. The advent of enclave technology, such as Intel SGX, TDX and AMD SEV, despite their weaknesses [1,2,3,4,5,6,7,8,9], has enabled some to build mildly re-envisioned versions of these devices . However, the solutions currently available on the market today are far from meeting the needs of the market. In this paper, we will explore what some of the shortcomings of these devices look like and discuss how the market for them has evolved.
A Brief History of HSMs
The first Hardware Security Module was introduced in the late 1970s by IBM. It was designed to be attached to a specific host with the goal of never exposing the PINs to the host. By the early 90s, there were a handful of more capable solutions in this market, they were primarily sold to governments, often for military use cases where the cost of key compromise warranted the increased operational burden and associated costs of this particular approach.
In the late 90s, we started to see practical innovation in this space. For example, the existing HSMs moved into hosts that enabled them to be accessed over the network. We also began to recognize the need to use code containing business logic that gated the use of specific keys. nCipher was one of the first to market with a generic offering in this space which was ahead of its time.
During this time period, the US government had established itself in the area of security and cryptographic standards. It was in this decade that we saw the concept of “Military Grade” security being extensively used in marketing. At this time, the idea of a commercial security industry was in its nascent stage, and the traction that was achieved was usually with government agencies and those who provided services to governments.
As these companies expanded their sales to the rest of corporate America, they mostly pushed for adopting the same patterns that had been found to be successful in the government. In the context of key management, these physical HSMs were considered the gold standard. As cryptography was seldom used in commercial software in any extensive way, the adoption of these devices was usually limited to very high-security systems that were often largely offline and had low-volume usage, at least by today’s standards.
During the 2000s, enterprise software began to move to third-party data centers and later to the cloud. This trend continued into the 2010s and gave us SEV/SXG-based appliances offering HSM-like capabilities, as well as the first HSMs designed for some level of multi-tenancy. However, from a product standpoint, these devices were designed much like their predecessors, so they inherited many of their shortcomings while also introducing their own issues along the way.
Evolution of Development in the Era of HSMs
In the 1970s, security was not really considered a profession but rather an academic exercise at best. In the following decades, software and hardware were shipped with huge leaps of assumption, such as assuming that anything on the network that can talk to me is trusted because we share the physical network. Networks were largely closed and not interconnected at the time. It was not until the 1980s that TCP/IP was standardized, and the interconnected ecosystem of networks and devices we all know today became a reality.
During the period of technological evolution, software was often written in Assembler and C. In the late 1990s and 2000s, the concept of memory-safe languages became increasingly important. Originally, these languages required large tradeoffs in performance, but as they evolved and Moore’s Law caught up, those tradeoffs became inconsequential for most applications.
It was during this same period that security, as a whole, was evolving into both a profession and an academic specialty. One of the largest milestones in this transition was the Microsoft Trustworthy Security Memo , which stressed that security had to become core to the way Microsoft built software. It took the next two decades, but the industry evolved quickly at this point, and the approaches to produce secure-by-default software, as well as the technology that made it easier to create secure-by-default software, became more common.
During this time the US Government stopped being seen as a leader in security, and its role in developing cryptographic standards began to wain due to several suspected examples of the government pushing insecurities and viabilities into both standards and commercial systems.
As a result, we saw a Cambrian explosion of new cryptographic approaches and algorithms coming out of academia. The government’s role in standardizing cryptography was still strong, and the commercial and regulatory power of the government meant that products using cryptography were effectively limited to using only the algorithms approved by the government.
Around the same time, Bitcoin, cryptocurrencies, and blockchain gained momentum. As they had no interest in governments, this created a once-in-a-lifetime opportunity for the world to explore new design patterns and approaches to solving problems related to cryptography and lit a fire under researchers to further long-standing ideas like Homomorphic Encryption (HE), Multi-Party Computation (MPC), Threshold Signatures, new ECC algorithms and more.
At the same time, we saw quantum computers become far more real, which introduced the question of how the cryptography we rely on will need to change to survive this impending change. Despite the reputational damage experienced by the US government due to its shepherding of cryptographic standards in preceding years, it still had a role to play in establishing what cryptographic algorithms it will rely upon in this post-quantum world. In 2016, the government started a standardization process for the selection of post-quantum cryptographic algorithms. In 2022, they announced the first four approved PQ algorithms based on that process .
During this same time, we have seen a substantial increase in security in the applications and operating systems we use, as a result of improvements in the processes and techniques used to build software. Despite this, there is still a long way to go. In particular, although this is changing, a lot of development happens in non-memory safe languages, and legacy applications still see broad deployment, which makes broad assumptions on the software and operating system dependencies they rely on.
Cloud adoption has played a significant role in driving this change, with as much as half of all enterprise computing now happening on cloud service providers. With the move to cloud, the physical computing environment is no longer the primary risk when it comes to protecting keys. The focus has shifted to online access, and as recent cryptocurrency compromises have shown, it is key management, not physical key protection, that is the weak link in modern cryptographic systems.
One notable exception here is Signal. It has been designed to minimize assumptions on underlying dependencies and is seen as the most secure option for messaging. So much so that most large technology companies have adopted their design, and the IETF has standardized its own derivatives of their protocols. This, combined with the earlier trend, signals how we are not only changing the processes, languages, and tooling we use to build everyday software but also the actual designs in order to mitigate the most common vulnerabilities.
This journey is not done, the Whitehouse has recently signaled [13,14,15] it will be using its regulatory power to accelerate the move to more secure services and will be looking to “rebalance the responsibility to defend cyberspace” by shifting liability for incidents to vendors who fail to meet basic security best practices.
What does this mean for HSMs?
The evolving landscape of cybersecurity and key management has significant implications for Hardware Security Modules (HSMs). With businesses moving their computing to cloud service providers, protecting keys has shifted from a physical computing environment to online access, making key management the weak link in modern cryptographic systems.
To stay relevant and effective, HSMs need to adapt and innovate. They will become computing platforms for smart contract-like controls that gate access to keys rather than cryptographic implementations that protect from physical key isolation.
This means that the developer experience for these devices must evolve to match customers’ needs for development, deployment, and operations, including languages, toolchains, management tools, and consideration of the entire lifecycle of services that manage sensitive key material.
Additionally, the HSM industry must address the issue of true multi-tenancy, securing keys for multiple users while maintaining strong isolation and protection against potential breaches.
Moreover, the HSM industry must address the growing demand for quantum-safe cryptography as current cryptographic algorithms may become obsolete with the development of quantum computers. HSMs must support new algorithms and provide a smooth transition to the post-quantum world.
In conclusion, the HSM industry needs to continue evolving to meet the changing needs of the cybersecurity landscape. Failure to do so may lead to new entrants into the market that can better provide solutions that meet the needs of today’s complex computing environments.
What are the opportunities for HSMs?
The changing landscape of cybersecurity and key management presents both challenges and opportunities for Hardware Security Modules (HSMs). One opportunity is the increasing need for secure key management as more and more businesses move their computing to cloud service providers. This presents an opportunity for HSMs to provide secure, cloud-based key management solutions that are adaptable to the evolving needs of modern cryptography.
Furthermore, the shift towards smart contract-like controls gating access to keys presents an opportunity for HSMs to become computing platforms that can be customized to meet specific business needs. This could lead to the development of new HSM-based services and applications that can provide added value to customers.
Another opportunity for HSMs is the growing demand for quantum-safe cryptography. With the development of quantum computers, the cryptographic algorithms used today may become obsolete, requiring the adoption of new quantum-safe cryptographic algorithms. HSMs can play a critical role in providing the necessary support for these new algorithms and ensuring a smooth transition to the post-quantum world.
In addition, the increasing adoption of blockchain and cryptocurrencies presents a significant opportunity for HSMs. These technologies rely heavily on cryptographic keys for security, and HSMs can provide a secure and scalable key management solution for these applications.
Overall, the changing landscape of cybersecurity and key management presents several great opportunities for HSMs to provide innovative solutions that can meet the evolving needs of businesses and the broader cryptographic community.