Homomorphic encryption is a type of encryption that allows computations to be performed on encrypted data without needing to decrypt it first. This means that sensitive information can remain secure while still being processed, enabling privacy-preserving data analysis and operations. One of the key benefits of homomorphic encryption is that it allows organizations to utilize cloud computing services without exposing their confidential data. By using this technology, businesses can perform calculations on their encrypted data, ensuring that their information stays protected even when handled by third-party services.