Lockheed Martin [LMT] and IronKey have partnered to develop a secure USB drive with military-grade encryption that is being dubbed a “PC on a stick.”

“We took advantage of this platform and its security offerings from a hardware perspective and we put literally the desktop image of a company’s desktop on this USB drive,” Anna Christensen, business development principal at Lockheed Martin, told sister publication Defense Daily recently.

“IronClad is an enterprise designed and built solution so it is built for an enterprise, not for consumers,” she added.

IronClad is for companies with employees who travel and must carry proprietary or sensitive data. Whereas up until now those employees took a company laptop on the road with them, now all they would need is the small USB drive, Christensen said.

Once the drive is connected to a computer, and that can be any computer at home, work or on the road, IronClad completely bypasses the host computer’s hard drive. “It doesn’t recognize the hard drive at all,” Christensen added.

IronClad bypasses the hard drive completely so everything runs off that USB drive, and the enterprise side keeps watch on all the drives, knows what’s on there and actually won’t allow anything that hasn’t been “whitelisted” get on the drive, she said.

“We whitelist it, that’s the opposite of “blacklist.” It says these are the things allowed to run. What we do is we go down to the half signature of every application on your desktop and put it on a list,” Christensen said. “If you are not on this list down to the signature level, it can’t run on the drive.”

Companies can now send their employees home and have them dial in with a lot more confidence that they are not exposing a risk to the network, she added.

Sometimes the hardest concept for people, Christensen noted, “is that the tiny drive is your desktop.”

IronClad is an encrypted hard drive. When the device is manufactured, Los Altos, Calif.- based IronKey does not put the encryption keys on the drive. “The encryption keys don’t come on until you–the user–initialize it,” Christensen said.

Lockheed Martin has a major pilot going on to evaluate IronClad as the company’s telecommuting solution, she added. “Because, at the moment, a lot of our telecommuters have VPN on their home computer and that is a vulnerability.

“So the options are to give everyone a laptop or give everyone an IronClad,” Christensen said.

Lockheed Martin has been allowing its customers to evaluate IronClad, which has been on the market since September, she said.

“We have a market technique where we hand out an evaluation key and there are a number of customers evaluating it. After the evaluation, if there is interest, they will go into a pilot phase and we have a number of those that are starting up as well,” Christensen said.

The focus for Lockheed Martin has been the federal customer, such as the Departments of Homeland Security and State, she noted.

“Anywhere where the workforce is mobile, dealing with sensitive information and there is an enterprise centrally managing desktops,” Christensen said.

The General Services Administration (GSA) price on the 8 GB drive is $350 and $450 for the 16GB drive. There is also a $199 annual service fee that supports all the policies a user is able to manage from a server, she added.

“It’s all policy driven. For example, you can set the types of passwords required and if you enter an incorrect password several times then it can turn into a brick…go inactive,” Christensen said. “You can manage it as a group all the way down to the single drive.”

Another thing Lockheed Martin does for security is take the three most vulnerable applications on a desktop and wrap them in their own virtual environment, Christensen said.

That security measure limits the damage a virus or malware can inflict, she added.

“It only infects what is in the virtual environment. It doesn’t infect the rest of the drive. The rest of your drive is protected,” Christensen said. “You only need to push a new wrapped version of the software that was in the virtual environment. You’ve contained what does get through.”

If a company wants to put a whole hard drive on a flash drive, they have to have security, it has to go hand in hand, Christensen said.

“The mobility is the key thing. The challenge has been how do you balance that with security, and we think we have a pretty interesting solution,” she added.