A type of encryption that allows computation on encrypted data. For instance, additive homomorphic encryption enables numbers in encrypted form to be added.
Several business drivers are pushing the need for meaningful data processing that doesn't expose sensitive information, first and foremost:
The desire to outsource data processing to the cloud in a way that lets processors process the data without knowing what it is
The emergence of new business models built around different contributors' proprietary data, where all contributors want to know aggregate data about the group, but no one wants to reveal their own sensitive data.
Homomorphic encryption can contribute towards secure multi-party computation.