There are only two types of companies, it is commonly said: those that have been hacked, and those that just don’t know it yet.
IBM, the computing giant, wants to get rid of both. The company said Monday that it has achieved a breakthrough in security technology that will allow every business, from banks to retailers to travel-booking companies, to encrypt their customer data on a massive scale — turning most, if not all, of their digital information into gibberish that is illegible to thieves with its new mainframe.
“The last generation of mainframes did encryption very well and very fast, but not in bulk,” Ross Mauri, general manager of IBM’s mainframe business, said in an interview. Mauri estimates that only 4 percent of data stolen since 2013 was ever encrypted.
As the number of data breaches affecting U.S. entities steadily grows — resulting in the leakage every year of millions of people’s personal information — IBM argues that universal encryption could be the answer to what has become an epidemic of hacking.
The key, according to IBM officials, is an update to the computer chips driving the powerful mainframe servers that house corporate or institutional information and process millions of transactions a day worldwide, from ATM withdrawals to credit card payments to flight reservations.
Cryptography, the science of turning legible information into coded gobbledygook, is already commonly used among certain email providers and storage services. But because of the enormous computational power needed to quickly encrypt and decrypt information as it passes from one entity to another, many businesses use encryption only selectively, if at all. A December report by the security firm Sophos found that while 3 out of 4 organizations routinely encrypt customer data or billing information, far more do not encrypt their intellectual property or HR records. Sixty percent of organizations also leave work files…