What is a Hardware Security Module (HSM) and its application

An HSM is a device that offers a robust operating system with an aim to perform cryptographic functions while protecting the cryptographic keys. While companies resort to automating their processes, these HSM devices make it possible for small and large organizations to store, protect and generate the digital keys for accessing sensitive data and information.

In this digital era, businesses are forever looking for easy means to automate their processes. Automating the business processes yields better productivity which eventually translates into more profits. But with automation comes the bigger risk of cyber threats and crimes. No wonder HSM has become highly useful for these enterprises while managing and safeguarding the cryptographic keys to deliver excellent lifecycle management.

What is an HSM?

Hardware Security Module or HSM is the dedicated cryptographic processor which can manage and protect your digital keys. These are tamper-resistant physical devices that can perform authentication, encryption, key exchange facilitation, decryption, and more. In layman's terms, these are the most trusted devices, free from any potential breach from viruses, unauthorized access, or malware.

Hardware Security Module offers you restricted network access and is often considered to be virtually impossible to compromise. Hence, these devices are often regarded as the Root of Trust in several companies.

The Root of Trust acts as the source within the cryptographic system, which is the most reliable platform at any time. HSM devices always generate random keys as they contain a specific piece of hardware that enables the computer to generate these random keys. As these HSM devices are kept off the company's network, the attacker needs physical access to these devices to access the protected data.

So, your encrypted data isn’t secure if they were exposed to cyber threats. But the availability of HSMs makes it easier for businesses to store and protect their cryptographic keys, as these are vintrusion and tamper-resistant hardware components.

A simplistic example can help understand the core concept of HSM devices. Let’s consider it to be the vending machine that maintains a secluded internal environment that all the users cannot access. But, of course, you can get your drinks and snacks from the machine, just like outputs from the HSM devices, but will not be granted any specific access to it.

Multiple vendors are offering these HSM devices in the market at attractive prices. A few names that deserve a special mention are Thales hardware security module, Entrust, Amazon AWS, Azure and more.

Benefits of HSM

Understanding the Working Principle of HSM

HSM refers to your "trusted" network as it is built on top of specialized hardware. It is already controlled by specific predefined internal rules which protect and actively hide the cryptographic material. But how does it function?

Let’s break down the entire working principle of HSM into the following steps:

  • Random Key Generation: For advanced security, HSM generates certified random numerical combinations. It is practically impossible to track this generation; hence, it seems to be an effective strategy to keep your cryptographic keys like session keys, public keys, etc., safe.
  • Store The Keys: HSM is responsible for storing the keys internally and using them to encrypt the messages accordingly. So, there is never any access given to the third party to keep the sensitive data and information secured.
  • Private Key Installation: A well-defined secure boundary of the device protects the key to ensure that both data encryption and decryption will require a similar cluster of devices
  • Data Encryption: The plaintext input remains encrypted using a symmetric key at both ends, while the recipient also uses the decryption similarly
  • Master Encryption Key Management: HSM is known for managing the Master encryption key for different IAM software systems, DB encryption, ADCs, firewalls, etc., to form the Root of Trust successfully.
Working principle of HSM

Understanding HSM Applications

HSMs are widely used across multiple sectors for providing data security. It is often considered the "foolproof" security plan for businesses to minimize their risks. A few reasons HSM gets such massive attention in the market are performance, simplicity, and enhanced security.

However, it isn’t only responsible for protecting your cryptographic keys and making them seamlessly accessible from the application with high performance and easy availability. So, by using the best hardware security module, the company gets to relieve the burden from the servers and applications while tightening the overall security of the systems.

So, what are the applications of HSM? Some of the industries that actively employ such devices are:

1. Industry

Here, the HSMs are chiefly used to protect the public key infrastructures (PKIs), cloud architectures, and virtual environments. The focus here is to secure the network encryption of critical IT infrastructures which are available within the connected production facilities. So, it involves a wide range of authentication mechanisms that can manage the data transmitted between various machines, data centers, distributed control centers, etc.

2. Healthcare

The Healthcare industry is one such area that actively employs HSM devices for multiple reasons. Dealing with a lot of sensitive patient data and information is challenging; hence, HSM devices are significant here for managing the telematics infrastructure.

From medical practices to research work and pharmacy details, HSM is responsible for managing a secure network to eliminate the slight possibilities of any cyber threats. No wonder such huge demands for these devices have increased the hardware security module prices in the market. Find best deals on HSM deals on DC Gears.

3. Smart Metering

Intelligent meters are widely used for water, electricity, district heating, and more. However, these sectors require the massive transmission of client data and information, which requires an advanced line of security. HSM devices are ideal as they protect the entire infrastructure while providing encryption mechanisms for secured data transmission.

4. M2M & IoT

HSMs secure the internet-based data flow between the smart devices used by clients and enterprises while protecting mutual identification and user authentication information. In addition, it finds utility in the M2M/IoT field for verifying the access privileges of clients and companies to maintain secure and seamless communication between both parties.

5. Automotive

HSM devices are also widely used in managing smart cars and vehicles. It is an ever-growing industry that needs appropriate security systems to manage software applications and the comprehensive exchange of electronic data. Depending on the operating conditions, HSMs secure the communication between different control devices. Unauthorized access, manipulation, or deactivation of any system is strictly controlled by these devices while offering high-end security to the driver-generated information.


"Bring your own key" refers to the encryption key management system, which enables companies to encrypt their data while retaining the control and management of the encryption keys. In this regard, HSM is highly preferred for the reliable implementation of access controls and security guidelines.

Using such applications, the enterprise can ensure that the users can access a specific cloud-based application using a security token or smartcard. Along with this, the HSM devices can also be deployed to secure the information processing and storage within the cloud without giving any encryption to the cloud provider.

HSM Applications

Did You Employ the Best HSM Device?

If your company is dealing with data transmission and storage, you already have a clue about the potential cyber threats. However, if you are keen on minimizing these risks for your business, it is time to employ the best HSM devices in your company.

Why waste time and company resources finding the best hardware security module vendors in the market when DC Gears is right here to help you? At DC Gears, we have an array of the top global brands offering excellent cybersecurity services at incredible rates. Browse, compare, and shortlist the best brand that can fulfill your business requirements at once. In case you need further assistance or on-site services, DC Gears is available 24*7. Got queries? Give us a call today!

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