A host-based IDS is resident on a host and reviews the system and event logs in order to detect an attack on the host and to determine if the attack was successful. All critical serves should have a Host Based Intrusion Detection System (HIDS) installed. As you are well aware, network based IDS cannot make sense or detect pattern of attacks within encrypted traffic. A HIDS might be able to detect such attack after the traffic has been decrypted on the host. This is why critical servers should have both NIDS and HIDS.
FROM WIKIPEDIA:
A HIDS will monitor all or part of the dynamic behavior and of the state of a computer system. Much as a NIDS will dynamically inspect network packets, a HIDS might detect which program accesses what resources and assure that (say) a word-processor hasn\'t suddenly and inexplicably started modifying the system password-database. Similarly a HIDS might look at the state of a system, its stored information, whether in RAM, in the file-system, or elsewhere; and check that the contents of these appear as expected.
One can think of a HIDS as an agent that monitors whether anything/anyone - internal or external - has circumvented the security policy that the operating system tries to enforce.
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