Because the encryption capability is built into the drive itself, backup servers and networks won't take a performance hit.

IBM, which telegraphed its plans on its Web site last week , formally announced yesterday that its TS1120 tape drive will include native encryption capabilities from then on thanks to a custom chip. Existing users of the tape drives can upgrade, the company said. However, to provide this functionality, IBM will raise prices of the tape drives by about 10 percent. The functionality is available immediately.

"We've encouraged people to use encryption, which some of them haven't been able to do," said Kevin Rhoden, CIO at Iron Mountain Inc., which had been criticized last year for losing tapes belonging to Time-Warner Inc.

Sun Microsystems Inc., which is announcing encryption for its T10000 tape drive Wednesday, is making the functionality available as an option for an unspecified "small premium," said Nigel Dessau, Sun's vice president of storage marketing. The company will start shipping a Fibre Channel version this month and a mainframe (Ficon) version by the end of the year, he said.

Sun is also announcing enhancements to its virtual tape library product, VTL Plus, with performance improvements of up to 30 percent and a higher capacity thanks to its use of the Sun 6000 disk subsystem, said Bill Watts, product manager for VTL. It will be available in two to three months, he said.