In the ever-growing digital era, the security of company data is of paramount importance. Choosing the right password manager plays a crucial role.
Password managers are indispensable for companies as they effectively help to ensure the security of sensitive data. By centrally managing access data, they minimize the risk of security breaches, promote conscious password behavior among employees and thus make a significant contribution to defending against cyber threats. In this blog post, we take a closer look at the two main types: local and cloud-based password managers. Find out which approach offers the best security measures for your company and how the different systems affect the management and storage of passwords. An in-depth comparison in four key aspects will give you the insights you need to make the best decisions for the security of your company data.
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Local vs. Cloud-Based Password Managers – The Differences
Local password managers store and manage passwords exclusively on the user’s end device. An internet connection is required once to download the password manager software. Afterwards, no connection to the internet is required to use the password manager. In contrast, cloud-based password managers store the passwords in a database in the cloud. The downloaded software accesses the stored passwords in the cloud in order to retrieve or synchronize them. Some providers emphasize that their solution is “offline”. This means that the passwords are stored locally on the user’s device, but still have a connection to the internet for synchronization or updating purposes. It is important to understand this difference in order to know how password managers really work.
The following section highlights the differences between the two types of password managers in terms of attack vector, usability & synchronization, privacy & control as well as costs.
The attack vector of a local password manager is limited and restricted to the end device on which the passwords or database are stored. In this context, it is crucial that the user takes responsibility for the security of their end device. This includes using trustworthy software providers and regularly updating the software. The physical security of the device is equally important, as all passwords can be compromised in the event of theft.
In contrast, cloud-based password managers have an extended attack vector due to their server on the internet. The security of the passwords depends entirely on the security of the server on which the passwords are stored.
Usability & Synchronization
Cloud-based password managers enable simple, automatic synchronization with various end devices such as desktops, laptops, cell phones and more. All that is required to access all passwords is to download the corresponding app and log in. Some manufacturers also offer access to passwords without any software. This is done by logging in to the platform in the browser in order to access one’s passwords. In contrast, a local password manager requires manual steps and is often more time-consuming. The database must be manually transferred to each end device, with many users tending to make the database temporarily available via cloud platforms such as Google Drive or Dropbox. This approach clashes with the original concept of local password managers, which aim to manage the database offline.
Privacy & Control
In terms of privacy and data control, the local password manager comes out on top. Users have full control over the passwords they manage locally, but they are also responsible for backup and recovery. In contrast, users of a cloud-based password manager must trust the provider to protect their data appropriately.
There is a wide range of providers that offer paid versions to ensure improved security and a more user-friendly experience. However, there are also free versions of both types of password managers that can be considered.
The functions and features listed offer valuable insights that should make it easier to decide on the right password manager. However, it is ultimately up to each user to carefully consider which type of password manager best suits their individual requirements and preferences. This consideration should be made carefully, as the choice of the right password manager contributes significantly to security and user-friendliness when handling passwords. It is therefore advisable to consider all factors before deciding on a particular password manager.
For more tips on choosing the right password manager, you can also read our blog “Quick and Easy Guide to Finding the Right Password Manager“. To identify more complex vulnerabilities and attack vectors, we recommend a detailed penetration test by our experts. Cyber Security Awareness training for the secure handling of passwords is also important to raise employees’ awareness of cyber threats, strengthen the security culture and minimize potential risks of data leaks and unauthorized access.
We are happy to help with these and all other cybersecurity topics. We look forward to hearing from you: