Storage-side vs Guest-side Encryption for VMs — Which to Choose?

Iris Li

Storage-side encryption is operationally simple and protects against lost/stolen media; guest-side encryption gives tenants true data privacy and key control. Use both for defense-in-depth when you can.

Storage-side (host/storage) encryption encrypts VM disks at rest and is transparent to guests — easy to manage centrally and great for protecting backups or stolen drives, but the host/operator can access plaintext if they control keys. Guest-side (in-VM) encryption — e.g., BitLocker or LUKS — keeps data confidential from the host when keys are kept out of operator reach, which is ideal for multi-tenant or highly regulated workloads, but it complicates key provisioning and recovery.

When to choose which:

Use storage-side if you need simple, operator-managed protection against media loss and want centralized key lifecycle.
Use guest-side if tenants must control keys or you require cryptographic separation from the hypervisor/operator.
Combine both for the best balance: storage-side for operational safety and guest-side for tenant privacy.

Miles

This is a fantastic and clear breakdown, thank you! The distinction between protecting against "lost media" and ensuring "tenant privacy" from the operator is something I hadn't fully grasped before.

So if I'm understanding correctly:

Storage-side encryption is like the storage provider putting a lock on the whole warehouse (easy for them to manage, protects against someone stealing the entire building).

Guest-side encryption is like the tenant putting their own lock on a specific storage locker inside that warehouse (even the warehouse owner can't see inside).

The "defense-in-depth" idea of using both makes perfect sense. For someone just starting to implement this, are there any specific tools or cloud services you've seen that make combining these two layers (especially managing the guest-side keys securely) more straightforward?

Also, in practice, is the performance impact of running something like BitLocker or LUKS inside the VM usually a significant concern?

Thanks for sharing this knowledge! It really helps to think about security in these layered terms.

Hugo

Wow, that's eye-opening! I had no idea encryption had so many layers! I only knew about mindlessly encrypting everything before—looks like I need to rethink my approach.

Julian Moreland

Spot-on summary! This really captures the classic trade-off between security and operational ease. Storage-side encryption is straightforward and great against lost/stolen media, while guest-side encryption is the true game-changer for tenant privacy, providing cryptographic isolation. Ideally, you'd use both for defense-in-depth. In practice, many teams start with one due to complexity. Starting with storage-side encryption and then layering in guest-side for critical workloads seems like a very practical adoption path.