Global Encryption Software Market to Grow at a CAGR of 16.5% by 2030

Introduction

Encryption software is an application platform that facilitates the encryption and decryption of data streams in transit or at rest. It provides security against unauthorized users and aids in the protection of files, network packets, and application content. Many firms are implementing encryption software to safeguard the privacy of digital data stored on their systems and transported over various networks. In addition, encryption software offers several benefits, including an increase in the data's integrity and security when an employee is working remotely. Furthermore, the market analysis also exhibit that the adoption of encryption software by SMBs enhances the firm's data security that drives market expansion.

Market Dynamics

Rise in Complexity & Volume of Data Breaches and Brute Force Attacks to Drive the Global Encryption Software Market

The development in digitalization has led to an increase in the frequency of data breaches and brute force assaults, which is one of the driving forces behind hardware encryption. Attacks based on the brute force are expanding at a rapid rate, necessitating the use of encrypted devices. Most companies have begun manufacturing encrypted keys/chips with 128-bit symmetric and 256-bit keys that provide more security. In sectors such as healthcare, BFSI, military & aerospace, and a few others, it is anticipated that manufacturers would produce encryption algorithm bit keys with a higher bit count, resulting in greater demand. Hardware-encrypted devices protect against various security threats and offer an effective method for protecting the privacy of sensitive personal and corporate data, which fuels the market's growth.

Widespread Adoption of Internet of Things (IoT) Technology and Cloud Services to Provide Opportunities for the Global Encryption Software Market

Internet of Things (IoT) devices collects and exchange data with dedicated control units or cloud services over the Internet. Devices with inadequate encryption or software-based IoT security are susceptible to cyberattacks, putting the privacy of individuals and organizations at risk. The maximum level of IoT device security is achieved through hardware encryption technologies. IoT devices secured using hardware-based encryption are impervious to all attacks, resulting in high IoT device security. The use of hardware-based encrypted devices has led to a rise in IoT device penetration, which is advantageous for the market. The United States, for instance, is a global leader in IoT expenditures and is estimated to spend almost $194 billion in 2019. In addition, cloud computing has led to increased data breaches, prompting many businesses to implement encryption software in cloud computing to protect their data. In addition, if the hardware components of the encryption contain critical corporate or customer information, a stolen or lost disc might result in a data breach and a violation of privacy. Consequently, there is an increase in the need for customers to use encrypted gadgets.

Regional Insights

Region-wise, the global encryption software market is analyzed across North America, Europe, Asia-Pacific, and LAMEA. North America accounted for the largest market share and is estimated to grow at a CAGR of 15.3%. The expansion of IT security investment in North America has been facilitated by deploying several government initiatives. In addition, the region is home to numerous well-established encryption software manufacturers, such as IBM Corporation and Kingston Technology Corporation Inc., which contributes to the market's expansion. To expand in the market, these competitors are employing a variety of growth methods, including the introduction of new Kingston Digital, Inc. products, the formation of alliances, and the signing of agreements. In addition, the increase in demand for consumer electronics such as laptops, PCs, and smartphones has assisted market participants in sustaining their businesses. The introduction of cloud services and the rise of IoT technologies have helped the expansion of the industry. In addition, factors such as the increasing requirement to conform to strict regulatory compliances, the expansion in the number of encryption software manufacturers, and the increase in government backing are significant market growth factors.

Europe is the second largest region. It is anticipated to reach an expected value of USD 36625 million by 2030, registering a CAGR of 16.2%. Encryption ensures the privacy of sensitive data and facilitates digital transformation through new regulations such as the General Data Protection Regulation (GDPR), Payment Card Industry Data Security Standard (PCI DSS), Health Insurance Portability and Accountability Act (HIPAA), and eIDAS, which fuel the market's expansion. A significant trend toward digital transformation in various European nations contributes to the expansion of the market. In addition, a rise in the understanding of data security benefits is anticipated to spur the implementation of encryption software in various government projects in nations with reviving economies. Moreover, the increase in adoption of encrypted devices in the healthcare sector, as a result of the implementation of various government regulations regarding digital patient records and the emergence of the bring-your-own-devices (BYOD) trend, is anticipated to create lucrative opportunities for market growth in the region

The Asia Pacific is the third largest region. Heavy investments done by private and public sectors for securing sensitive data are driving the expansion of the Asia-Pacific encryption software market, leading to rising demand for encryption software used to secure and ensure data privacy. The market for encrypted storage devices is anticipated to grow at a significant rate due to an increase in cases of data breaches and an increase in the demand for data security. As corporate data breaches rise, business-critical applications are exposed to malicious threats. Due to the availability of raw materials and low labor costs, the Asia-Pacific market is occupied by many international and domestic companies. Greater emphasis on rising economies drives investments in the Asia-Pacific area. All the above market trends propelled the market growth in the region.

Key Highlights

• The global encryption software market size was USD 9265 million in 2021 and is estimated to reach an expected value of USD 36625 million by 2030, registering a CAGR of 16.5% during the forecast period (2022 – 2030).
• In terms of components, the global encryption software market is bifurcated into software and service. The software segment dominated the global encryption software market and is estimated to grow at a CAGR of 15.9% during the forecast period. 
• Based on the deployment model, the global encryption software market is segmented into on-premise and cloud. The on-premise segment dominated the global encryption software market and is estimated to grow at a CAGR of 14.9% during the forecast period. 
• By organization size, the global encryption software market is bifurcated into large enterprises and small and medium-sized enterprises (SMEs). The large enterprise segment was the highest contributor to the market and is estimated to grow at a CAGR of 15.8% during the forecast period. 
• In terms of function, the global encryption software market is divided into disk encryption, communication encryption, file/folder encryption, and cloud encryption. The disk encryption segment was the highest contributor to the market and is estimated to grow at a CAGR of 14.8% during the forecast period. 
• As per industry vertical, the global encryption software market is classified into BFSI, IT/telecom, government & public, retail, healthcare, aerospace & defense, media &entertainment, and others. The BFSI segment dominated the global encryption software market and is estimated to grow at a CAGR of 13.6% during the forecast period. 

Competitive Players

Competitive Landscape

The major companies in the global encryption software market analysis are Check Point Software Technologies, Cisco System, Inc., F-Secure, Fortinet, Inc., IBM Corporation, Amazon Web Services, Inc. (AWS), Microsoft Corporation, Oracle Corporation, Palo Alto Networks, Inc. and Trend Micro Incorporated BFSI.

Recent Developments

Market News

• October 2022 - Cisco published its 2022 Consumer Privacy Survey, an annual global review of consumers' perceptions and behaviors on data privacy. This year's survey highlights the critical need for further transparency as consumers say their top priority is for organizations to be more transparent on how they use their data. The survey also showed that while, in theory, consumers are supportive of AI (with 54 percent willing to share their anonymized data to improve AI products), many (65 percent) have lost trust in organizations due to their use of AI.

• October 2022 -U.S. President Joseph R. Biden, Jr. and IBM (NYSE: IBM) Chairman and CEO Arvind Krishna will tour IBM's Poughkeepsie, New York facility in October 2022 to witness where the future of computing is being created, developed, and innovated. During the visit, IBM will announce a proposal to invest $20 billion over the next decade in the Hudson Valley region. The purpose of the investments, which will be bolstered by close collaboration with New York State, is to extend New York's thriving technology ecosystem in order to unlock new discoveries and opportunities in semiconductors, computers, hybrid cloud, artificial intelligence, and quantum computers.

Segmentation

Global Encryption Software Market: Segmentation

By Component

• Software
• Service

By Deployment Mode

• On-Premise
• Cloud

By Organization Size

• Large Enterprises
• Small & Medium Enterprises

By Function

• Disk Encryption
• File/Folder Encryption
• Communication Encryption
• Cloud Encryption

By Industry Vertical

• BFSI
• IT/Telecom
• Government & Public
• Retail
• Healthcare
• Aerospace & Defense
• Media & Entertainment
• Others

By Region

• North America
• Europe
• Asia Pacific
• LAMEA