A Tel Aviv start-up called Porticor that’s just hit the radar says it’s got a way to secure the cloud, any cloud. Fancy that, a trustworthy cloud.

And Porticor delivers its data encryption solution to IaaS and PaaS users through the cloud in minutes. Fancy that.

It’s supposed to solve the biggest challenge for data encryption in the cloud – storing keys.

It promises that a user’s data encryption key will never be exposed and that it can deliver data security across virtual disks, databases, distributed storage and file systems.

All this wonderfulness, called the Porticor Virtual Private Data (VPD) System, a combination of the start-up’s Virtual Appliance and Virtual Key Management Service, comes complements of its patent-pending homomorphic split-key encryption technology, which is supposed to increase security by an order of magnitude through hosted key management.

It’s supposed to be the industry’s first solution to combine data encryption with patented key management in defense of critical data in public, private and hybrid cloud environments.

Users can supposedly kiss good-bye traditional data security solutions that require costly software licenses and create operational overhead.

Porticor’s widgetry is a cost-effective virtual appliance that requires no encryption or key management experience to encrypt customers’ entire data layer with a proven AES 256-bit encryption algorithm.

The start-up expects the breakthrough to mitigate concerns about adopting the cloud.

VPD may best be compared to a Swiss bank. Entry to a Swiss lockbox needs two keys: one in possession of the bank, the other in possession of the owner.

That’s what Porticor does. It takes a patented split-key approach. Each data object, such as a disk or file, is encrypted with a unique key that’s split in two: a master key and a specific key. The master key is common to all data objects of one application and remains the possession of the application owner and is unknown to Porticor.

The second, “specific” key is different for each data object and is stored by the Porticor Virtual Key Management Service. As the application accesses the data store, Porticor uses both keys to dynamically encrypt and decrypt the data.

When the master key is in the cloud, it is said to be homomorphically encrypted – even when in use – and can never be seen in the cloud.

This mathematical technique lets Porticor do key-splitting and key-joining without knowing the key. It only knows the encrypted form of the keys.

By leaving one encryption with the customer Porticor differs from cloud encryption solutions that put customer encryption keys in the hands of a security vendor or cloud provider.

The widgetry complies with SOX, HIPAA, PCI DDS and GLBA, and reportedly solves the issues raised by the EU Data Protection and the US Patriot Act.

Porticor’s VPD system is available now. No download is required. It is deployed in the cloud and managed from Porticor’s customer portal. Pricing starts at $27.50 a month per Porticor Virtual Appliance for testing and very small production environments. The largest production environments run $411 a month. It comes with or without configuration for those who like to muck around but then setup takes longer.

It supports Amazon’s Virtual Private Cloud (VPC), where Porticor’s virtual appliance would logically go alongside the user’s application servers so the data never leaves the VPC unencrypted. Users can also snapshot their EBS disks, which are also encrypted.

Red Hat is reportedly offering the Porticor widgetry in its Cloud Foundation.

Porticor, which got started in 2010, is backed by $1 million A round from Glilot Capital. CEO Gilad Parann-Nissany said the company is working with Fortune 1000s.