Matthew Dorn

IBM today is saying one of its researchers has made it possible for computer systems to perform calculations on encrypted data without decrypting it. While that sounds somewhat counterintuitive and complicated, IBM says the breakthrough would let computer services, such as Google or others storing the confidential, electronic data of others will be able to fully analyze data on their clients' behalf without expensive interaction with the client and without actually seeing any of the private data.

The idea is a user could search for information using encrypted search words, and get encrypted results they could then decrypt on their own. Other potential applications include enabling filters to identify spam, even in encrypted email, or protecting information contained in electronic medical records. The breakthrough might also one day enable computer users to retrieve information from a search engine with more confidentiality, IBM said

IBM Researcher Craig Gentry came up with he calls "fully homomorphic encryption," which uses a mathematical system known as an "ideal lattice," that lets people to fully interact with encrypted data in ways previously thought impossible.

Using the technology could also bolster the cloud computing model where a service provider hosts the confidential data of others. It might better enable a service to perform computations on clients' data at their request, such as analyzing sales patterns, without exposing the original data.

"Fully homomorphic encryption is a bit like enabling a layperson to perform flawless neurosurgery while blindfolded, and without later remembering the episode. We believe this breakthrough will enable businesses to make more informed decisions, based on more studied analysis, without compromising privacy. We also think that the lattice approach holds potential for helping to solve additional cryptography challenges in the future, " said Charles Lickel, vice president of Software Research at IBM in a release.

According to an article on Forbes.com, Gentry's solution has a catch: It requires immense computational effort. In the case of a Google search, for instance, performing the process with encrypted keywords would multiply the necessary computing time by around 1 trillion, Gentry estimates.

IBM said two fathers of modern encryption - Ron Rivest and Leonard Adleman - together with Michael Dertouzos, introduced and struggled with the notion of fully homomorphic encryption approximately 30 years ago. Although advances through the years offered partial solutions to this problem, a full solution that achieves all the desired properties of homomorphic encryption did not exist until now.

Forty-two percent of CIOs suffered budget decreases in the first quarter of 2009, and IT shops on average slashed budgets by 4.7%, according to new research published by Gartner.

CIOs were expecting an average first quarter budget increase of 0.16% late last year, but were forced to cut costs as the economy worsened. Fifty-four percent of CIOs reported no change in their IT budget, while a scant 4% enjoyed an increase. Average declines of 7.2% were seen by those companies that reduced IT spending. Counting all companies, including those with flat budgets and increases, the average decline was 4.7%.

"CIOs reported that renegotiating vendor contracts and head count reductions were the primary focus areas for accommodating budget reductions," Gartner analyst Mark McDonald says in a press release. "CIOs report shifting more work to in-house resources and delaying capital expenditures more than reducing IT project investments."

The findings are based on a survey of 900 CIOs from across the globe, encompassing $77 billion in IT spending. The survey, conducted in March and April, was compared to results from a similar survey of 1,500 CIOs conducted from September to December.

Budget cuts spanned all types of enterprises both in terms of size, geography and industry. Healthcare organizations reported an average budget increase of 2.2%, but CIOs in every other major industry reported a decline in the first quarter, Gartner said. Ten percent budget cuts were seen in the professional services, telecommunications and high-tech sectors. An 8% budget cut was reported in manufacturing, and 4% cuts were reported at utilities and financial services organizations.

Many CIOs say further cuts in 2009 are unlikely, and that they expect the economy to recover between the first and third quarters of 2010. But they are bracing for the possibility of further budget reductions.

"The percentage of CIOs with a contingency plan for the remainder of 2009 has more than doubled compared with 2008," Gartner reports. "CIOs with additional contingency plans for 2009 are planning for the potential of renewed IT spending, as well as additional reductions. While 44% of CIOs do not believe they will need to tap into their contingency plans, those that do believe they will [expect to] do so during the next six months."

CIOs are already planning for ramping up IT spending, once the economy recovers. Increases in "IT investment projects and workforce levels" will be the top priorities for CIOs during the expected turnaround, according to the survey. "Software, hardware and infrastructure investments are also high on the CIO's agenda on the path to economic recovery," Gartner says.