Types of Encryption, Cont.
Why Drive-Based Encryption Is Safest and Best
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Hardware-based encryption, on the other hand, solves these two concerns. A hardware-based solution will employ a dedicated encrypt/decrypt ASIC that does nothing other than crunch AES operations, making it much faster even than AES-NI. For example, when deployed in a hard drive, such ASICs serve to encrypt all data as it is written into the drive and then decrypt it as the data is read from the drive. A few years ago, such drives suffered from a slight overhead impact caused by the encryption process—typically from 1% to 3%. However, with modern self-encrypting drives (SEDs), this overhead vanishes. The encryption ASICs on SEDs are now fast enough to compute effectively in real-time and show no performance lag when compared with their non-encrypting peers, even on ultra-fast solid state drives.
The inevitable question of whether software encryption is “fast enough” falls to individual managers to decide. But rest assured that heavy encryption still takes a toll on system resources, regardless of how it might be accelerated.
“The problem is all the layers in between you and the drive that you have to go through,” says Seagate’s Monty Forehand, director of development engineering. “There’s the decomposition and re-composition of data that has to happen in all those layers, whether it’s in the chipset or in the processor or wherever. I gave a presentation at the Flash Memory Summit recently, and I asked the audience if anybody had any data that could show software encrypting as fast as a self-encrypting drive with equivalent performance. Nobody did. Every time someone goes off and measures this, software encryption has less performance. You can debate about whether that should or shouldn’t be and the quality of the software implementation, but at the end of the day it’s slower than doing it in the drive.”

Source: http://www.trustedstrategies.com/papers/comparing_hardware_and_software_fde.pdf
Furthermore, in businesses where hours mean big money, there’s another concern to keep in mind with software-based encryption: conversion downtime.
“If I buy a system or a server,” adds Forehand, “I’ve got to install the OS, drivers, apps, and all other software, and then I’ve got to go re-encrypt everything that was already on that drive, including the software I just installed. With a self-encrypting drive, you plug it in, image the drive, and it’s all encrypted from the start. You don't have to stop and take a day or a half-day to wait for your machine to re-encrypt.”
Finally, and perhaps unintuitively, the efficiency disparity between software-and SED-based encryption magnifies when examining the difference between hard drives and solid state drives. Because SSD throughput is dramatically faster, all of the overhead generated by software encryption compounds with the increase in transaction rate. Some testers have even seen SSD performance encumbered by software encryption drop back down to hard disk levels. This has led to an unwritten rule in some storage circles: You can have SSD performance or you can have software encryption—but you can’t have both at the same time. However, you can have SSD performance and keep all of that performance with hardware-based encryption.