VMware vSphere virtual machine encryption is the only component listed that satisfies all the customer's requirements. Introduced in vSphere 6.5, this feature provides granular, policy-based encryption for individual virtual machines. It encrypts the VM's files (such as VMDKs) on the datastore, fulfilling the data-at-rest encryption requirement. It also automatically enables encrypted vMotion, securing data as it moves between hosts, which satisfies the encryption-in-transit requirement. Because encryption is applied per-VM and managed through a Key Management Server (KMS), it provides strong cryptographic isolation, ensuring VMs are restricted to their specified tenant.

A. Cisco TrustSec: This is a network security solution for segmentation and access control using tags. It does not provide encryption for data at rest on the storage array.

B. NetApp Storage Encryption (NSE): This technology uses self-encrypting drives (SEDs) to encrypt all data on a physical disk. It lacks the granularity for per-tenant policies and does not encrypt data in transit (e.g., vMotion).

C. NetApp Volume Encryption (NVE): This is a software-based solution that encrypts entire NetApp volumes. While it provides data-at-rest encryption, it does not address the requirement to encrypt data in transit during vMotion.

1. VMware vSphere 6.7 Documentation, "vSphere Security" PDF, Chapter 8: vSphere Virtual Machine Encryption, Page 121: "vSphere Virtual Machine Encryption provides security to virtual machine disks and other virtual machine files... When you enable encryption for a virtual machine, vSphere encrypts the virtual machine files... Encrypted vMotion provides security for data in transit." This confirms that vSphere VM encryption handles both at-rest and in-transit (vMotion) encryption.

2. NetApp Technical Report TR-4569, "NetApp ONTAP and VMware vSphere Storage Best Practices," Section 6.2.3: VMware vSphere Virtual Machine Encryption, Page 45: "VM encryption is a feature introduced in vSphere 6.5 that provides virtual machine-level encryption... VM encryption also encrypts all associated files, such as the VMX file, and it encrypts vMotion traffic by default." This source explicitly states that vSphere VM encryption covers both VM files (at rest) and vMotion traffic (in transit).

3. Cisco Validated Design (CVD), "FlexPod Datacenter with VMware vSphere 7.0, Cisco UCS M6, and NetApp ONTAP 9.8 Design Guide," Section: Security, Subsection: Data-at-Rest Encryption, Page 31: This design guide differentiates the roles of various encryption technologies. It describes NetApp NVE and NSE for storage-level encryption and VMware vSphere Virtual Machine Encryption for VM-level protection, highlighting the latter's ability to provide granular security suitable for multitenant environments.