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Comment on Amazon Starts Email Service for Companies

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I'm curious about two things:

1) Where does this use Key Management Service to encrypt? At the SMTPD? With keys unique to each end user? S/MIME? What?

2) What's the real security model of KMS? Is it using HSMs for keys, or just shipping keys to systems? Does it use any other hardware/platform security features to protect keys, or just basically a "soft HSM" running in Dom0 on each machine? Or something purely network based, and also done in software only?

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