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Enabling File Encryption

With the introduction of Windows 2000, Microsoft added the ability to encrypt individual files or entire subdirectories stored on an NTFS volume in a totally transparent way. To their creator, encrypted files look exactly like regular files—no changes to applications are required to use them. However, to anyone except the creator/encryptor, the files are unavailable. Even if someone did manage to gain access to them, they would be gibberish because they're stored in encrypted form.

Encryption is simply an advanced attribute of the file, like compression. However, a file cannot be both compressed and encrypted at the same time—the attributes are mutually exclusive. Encrypted files are available only to the encryptor, but they can be recovered by the domain or machine recovery agent if necessary. You can back up encrypted files by normal backup procedures if the backup program is Windows Server 2008–aware. Files remain encrypted when backed up, and restored files retain their encryption.

Under normal circumstances, no user except the actual creator of an encrypted file has access to the file. Even a change of ownership does not remove the encryption. This prevents sensitive data—such as payroll information, annual reviews, and so on—from being accessed by the wrong users, even ones with administrative rights.

Note Encryption is available only on NTFS. If you copy the file to a floppy disk or to any other file system, the file is no longer encrypted. This means that if you have a USB key drive, for example, that is formatted with FAT, or if you use NFS file systems, copying the file there will remove the encryption.



When you encrypt a folder, all new files created in that folder are encrypted from that point forward. You can also elect to encrypt the current contents when you perform the encryption. However, be warned that if you choose to encrypt the contents of a folder when it already contains files or subfolders, those files and subfolders are encrypted for the user performing the encryption only. This means that even files owned by another user are encrypted and available for your use only—the owner of the files will no longer be able to access them.

When new files are created in an encrypted folder, the files are encrypted for use by the creator of the file, not the user who first enabled encryption on the folder. Unencrypted files in an encrypted folder can be used by all users who have security rights to use files in that folder, and the encryption status of the file does not change unless the filename itself is changed. Users can read, modify, and save the file without converting it to an encrypted file, but any change in the name of the file triggers an encryption, and the encryption makes the file available only to the person who triggers the encryption.

Important If you use EFS, it is essential that you back up EFS certificates and designate a Recovery Agent to protect against irreversible data loss. EFS certificates and recovery agents are covered in Chapter 23, "Implementing Security."



To encrypt a file or folder, follow these steps:

  1. In Windows Explorer, right-click the folder or files you want to encrypt, and choose Properties from the shortcut menu.
  2. Click Advanced on the General tab to open the Advanced Attributes dialog box shown in Figure 19-30.

    Dd163562.figure_C19625051_30(en-us,TechNet.10).png

    Figure 19-30 The Advanced Attributes dialog box

  3. Select the Encrypt Contents To Secure Data check box and click OK to return to the main Properties window for the folder or file. Click OK or Apply to enable the encryption. If any files or subfolders are already in the folder, you're presented with the dialog box shown in Figure 19-31.

    Dd163562.figure_C19625051_31(en-us,TechNet.10).png

    Figure 19-31 Choosing whether to encrypt the files already in a folder or just new files

  4. If you choose Apply Changes To This Folder Only, all the current files and subfolders in the folder remain unencrypted, but any new files and folders are encrypted by the creator as they are created. If you choose Apply Changes To This Folder, Subfolders, And Files, all the files and folders below this folder are encrypted so that only you can use them, regardless of the original creator or owner of the file.
  5. Click OK and the encryption occurs.

Real World: The Limitations of EFS

The EFS capabilities of Windows Server 2008 provide a useful way to encrypt folders and files to prevent unauthorized access. However, EFS has limitations, and you need to manage it carefully to not create issues.

Once an EFS folder is created, any files created in the folder will always be encrypted by the creator of the file. This is not always what you intend. If you have a publicly available folder that has encryption on it, you need to carefully manage who has access to that folder using NTFS file permissions, share permissions, or other methods of preventing unauthorized access.

Another problem is that anyone who has access to your system drive can break EFS encryption. This shouldn't be a big problem on a well-secured server, but it's still a concern. The solution is to enable BitLocker on your server. BitLocker was introduced with Windows Vista as a solution for the mobile laptop, but it has very real possibilities for the enterprise trying to fully secure its environment. For more on BitLocker, see Chapter 23.



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