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preventing data access on a stolen system.

Not sure if this is the proper zone, if not please advise.
Question is, I have a client that uses a Windows 2003 server, and it contains privaliged information that we would not want any one else to have access to.
Our concern is not access while in use at the facilty, but if the unit is stolen, as it has been before.

Seems as though if we use some type of encryption software, tha back up does not get it.

so how can we continue to back up the system, as well as make sure that if the unit is stolen the perps will not be able to access the data?
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An Attacker with Physical Access to Your Computer May Be Able to Access Your Files and Other Data

How To Encrypt a Folder in Windows XP (same for W2K3)
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Thank you, being a bit of a newb to the server game and data storage I appreciate it.

give me a machine with a hardware or software problem and I'll fix it.

Mike R
no worries about my problematic HW/SW, i can fix them myself. :-))

thanks for your grade and point. :-)