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Can anyone please tell me which option is better, I mean whether I should encrypt my data at virtual machine level or guest level in cloud? I tried to investigate it but did not find best solution so i thought to start discussion here. Actually I was to protect my guest data but I am not sure what are the possible pros and cons if I apply encryption at one these two options. It might have nothing to do with practical implementation but it will give us idea about problems that can happen. So to summarize the discussion:

What are the possible pros and cons while implementing encryption at virtual machine or host level?

Any help in this regard will highly be appreciated.

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You should do it on a guest level. The main reason for this is that your storage will often not be on the host but on an external storage appliance. Also the flexibility of virualization is is that you can migrate your guests between hosts quite easily, this would be lost if you perform encryption at host level.

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Thanks Lucas for such a helpful and quick reply. I was checking one host level encryption solution. In that keymanager was attached with host(as it should be obvious). I was wondering if I will take encryption from host to guest then do I need to move keymanager too? And what are the possible performance issues? I mean at which level performance is better. – Tauqeer Ahmad Jun 23 '13 at 22:12
@TauqeerAhmad - please ask another question. – Deer Hunter Jun 24 '13 at 7:32

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