Data breaches spark hard-drive shredding boom

This is a great time to be in the hard-drive shredding business, as companies scramble to destroy data before the bad guys have a chance to steal it. A look inside the belly of the beast

"In a case like that you don't want to buy the equipment, you want to come to our plant instead," Dempsey says. And so a section of the SEM warehouse was refitted to meet the need. Three years ago, SEM was making US$13,000 a year just on the destruction of hard drives, DAT tapes and other magnetic media. This year the revenue projection is US$750,000.

"As breaches have occurred and the private sector has become more security aware, our growth has been tied to people finding us and seeing that we comply with federal standards," he says.

Indeed, all of SEM's technology has the US National Security Agency seal of approval and the company is fully insured. The destruction process is carefully monitored around the clock with an array of video cameras. Customers are allowed to stay and witness the destruction if they wish, or they can watch remotely from the Web.

Pros and cons

Most of the security experts contacted for this story described themselves as pro-shredding, including Doc Farmer, senior security specialist at InfoSec. Others are skittish about entrusting the process to outsiders.

"I'm definitely in the pro-shredding camp, and have set up policies, standards and procedures for same in past jobs," Farmer says. "Generally, I've not known a company to do this as a business. It's always been handled internally from my experience. But considering how many data breaches have occurred recently," it's probably something worth investing in, he says.

Typically, Farmer only shreds disks that were going out the door anyway, such as when old PCs were being scrapped or donated. "I'd set up simple batch files on a bootable diskette with a copy of BCWipe.exe on it, reboot the PC and nuke the hard drive at DoD levels, which was and remains sufficient for 99.9 percent of all situations," he says.

Benoit H. Dicaire, an information security strategist for consultancy INFRAX, is more skeptical.

"You need evidence of the destruction," he says. "It's easier to do it in-house. Just the thought of transporting the gears from the corporate site to the destruction site makes me shiver."

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