Application Security Market

Market Overview

The global application security market size was worth USD 7.5 billion in 2021 and is estimated to reach an expected value of USD 30 billion by 2030, registering a CAGR of 16.6% during the forecast period (2022-2030). 

The security systems reduce the security risks associated with the various operations of numerous applications, including web and mobile applications. Web applications were expected to continue being the primary source of verified breaches. The risk of a breach has steadily risen as firms connect to more and more mission-critical apps online. Hence, with the increase in vulnerabilities, the market for application security has been witnessing an increased demand for web applications.

Market Dynamics

Market Drivers

Favorable Government Regulations 

With the raised risks associated with data breaches, governments across various countries have deployed regulations. Every country, region, and enterprise operating across the world has its structure, set of regulations, and guidelines, to create an environment that provides enough opportunities to maintain secure cyberspace.

According to Search Compliance, several researchers suggest that 90% of software in use has security vulnerabilities in the application layer. Due to this, cybercriminals are wising up and using apps to compromise corporate infrastructure, install malware and exfiltrate data, and app security regulations are emerging to combat this new threat.  The evolution of cybersecurity from a reactive measure to compensate for the predictive and prescriptive impact is evident with the governments formulating stringent policies to safeguard data theft in many countries worldwide. With such mandates coming, the adoption of market-studied solutions worldwide has been witnessing growth.

Increased Number of Sophisticated Attacks 

With the growing digitalization, cybersecurity threats are also on the rise. Also, the vulnerabilities in the web and mobile applications resulted in the data breach growth.

Security Boulevard'sBoulevard's statistics show that 60% of breaches contained flaws for which a patch was already available but was not used. Appthority claims that non-malware dangerous app behavior, such as invasive data collection and sharing, is one of the primary sources of danger. This has been driving the demand for application security. 

Furthermore, with the growing number of threats, costs associated with data breaches are also increasing. With the regulations, such as GDPR, coming into effect, the concept of many fines for data breach instances had come into action across various countries. The total number of fines that have been published under the GDPR in 2019, with only one penalty reported in the UK, while the Spanish DPA has ordered 112 fines, ten by the Italian DPA, nine by the Belgian DPA, six by the CNIL in France, thirteen in Germany and five in Poland. However, the UK ICO has EUR 314,000,000 worth of proposed fines in its pipeline. Such high penalties would affect the company's operations in the coming years. This had been driving the adoption of the market studied.

Market Restraint

Budget Constraints and Unused Applications Restrict Companies from Adoption 

Several studies show that information security, notably cybersecurity, is still not given enough money or attention in the workplace despite the rising frequency of data breaches and criminality. Enterprises leave thousands of applications underutilized when they are not used for purposes other than business-critical, like ordering products and services or engaging in payment-related activities. The Unused business-critical applications are harmful as they are not updated continuously. Several SMEs consider that spending money on such applications would cost the company. 

According to Shred-it, a survey observed that 62% of CIOs and other cybersecurity professionals' budget constraints had been the most significant challenge for adopting application security. Hence, budget constraints and ROI for SMEs are significant restraints for the application security market.

Market Opportunities

Increased Number of Third-party Applications 

The primary reason for the growth and user installation, followed by app permissions for third-party apps, is their ability to attract users with innovations. Third-party SaaS apps can significantly extend the functionality and capabilities of an organization's public cloud environment, but they can also introduce security concerns. Most apps can read, write, and erase sensitive data, which significantly influences the risk to the business, compliance, and security.

The increasing number of apps and increasing cost for their availability over the certified app stores followed by the regulations had enabled growth in third-party app stores. Several third-party apps are highly vulnerable to attacks and data breaches. The largest of these is Aptoide, which claims to have 150 million users worldwide and a million apps. The third-party app store breach resulted from a hacker claiming to have stolen 39 million customer records and disclosed information on 20 million, comprising login emails and hashed passwords, on a popular hacking forum. With such instances increasing, the demand for application security has been gaining significant adoption.

Regional Analysis

By region, the global application security market is segmented into North America, Europe, Asia-Pacific, Latin America, Middle East & Africa 

North America accounted for the largest market share and is estimated to grow at a CAGR of 16.3% during the forecast period. Many businesses in the North American region use a wide range of applications for work, education, entertainment, retail, and other uses. North American organizations suffer greatly from financially motivated attacks against their web application infrastructure. In the company's dataset for 2020, North America accounted for 69% of all occurrences and 55% of breaches, according to Verizon'sVerizon's report on 2020 data breach investigations. Additionally, 20% of attacks targeted the infrastructure of web applications. Additionally, it was frequently observed that hackers were accessing the enterprise's web-based email and other web applications using credentials that had been stolen. The use of stolen credentials has grown proportionally to the growing trend of enterprises utilizing cloud-based solutions. Application security services and software are so required.

Europe is the second largest region. It is estimated to reach an expected value of USD 9 billion by 2030, registering a CAGR of 16.6%. Data breaches have been significantly high in the Europe region as well. According to Data Breach 2020 report by the European Union Agency for Cybersecurity (ENISA), Cloud/ Web applications are being used as a vector for attempts by malicious actors to breach data or critical operations. Stealing credentials to access web-based email portals is a prime example. Exploiting weaknesses in the application servers to inject/deliver information-stealing malware or other attacks are other examples of this vector. In May 2020, information about more than a thousand staff and members of the European Parliament was exposed in a significant data breach. The data included 1,200 elected officials and staff accounts, along with another 15,000 other accounts of EU affairs professionals. The unprotected data includes information of thousands of people, including some of the commission. Such breaches in the region have prompted a need for application security solutions.

Asia-Pacific is the third largest region. Asia-pacific is one of the major regions in terms of the level of internet penetration across the world. The major trends for the market in the APAC region include increased security breaches targeting businesses, the number of SMEs, the low budget for cybersecurity, more usage of open-source applications for security testing, and others. Asia accounts for nearly half of all internet users worldwide. More people are turning to the internet as the Covid-19 coronavirus continues to force many countries, such as India, into lockdown. According to new data from LearnBonds, Asia has 2.3 billion internet users, which equates to 50.3% of the world's internet user population. China and India have high populations now accessing the internet mainly through mobile phones. Such intense internet penetration raises the chances of data breaches and creates an imperative need for application security solutions.

Segmental Analysis

The global application security market is segmented by application, component, deployment, organization size, types of security testing, end-user industry, and region.  

By Application Analysis

By application, the global market is segmented into web application security and mobile application security. The web application security segment accounted for the largest market share and is estimated to grow at a CAGR of 12.6% during the projected period. The paradigm shift observed in the threat behavior is anticipated to foster the web application security solutions market during the forecast period. A survey conducted on about 600 IT leaders at small and medium-sized businesses by Ponemon Institute and reported in the ''State of Cybersecurity in Small & Medium-Sized Businesses 'Businesses' report indicated that about 49% of businesses have witnessed ''Web-based (web application) Attacks''. The report also indicated that these attacks are businesses' most common threats today.

By Service Analysis

By service, the global market is segmented into managed and professional. The managed segment accounted for the largest market share and is estimated to grow at a CAGR of 17.3% during the forecast period. Managed services provide organizations with the most significant advantages, such as additional bandwidth (which enables them to perform more testing) and more breadth and depth in the testing services and skills, resulting in increased portfolio coverage and practical budget usage. Expanded application security testing allows the in-house team in the organization to deal with vulnerability management by monitoring results continuously. Such benefits highlight the growing importance of managed services from an organization's perspective.

By Deployment Analysis

By deployment, the global market is segmented into cloud and on-premise. The on-premise segment accounted for the highest market share and is estimated to grow at a CAGR of 14.3% during the forecast period. On-premise deployment is a preferred choice, especially among small organizations. The on-premise systems are loaded with features and offer more flexibility and configurability than a cloud-based system. But the user experience and user interface can be outdated. There are lower recorded instances of breaches for on-premise systems as compared to cloud-based.

By Organization Size Analysis

Based on organization size, the global market is segmented into small and medium enterprises and large enterprises. The large enterprise segment dominated the market and is estimated to grow at a CAGR of 16.4% during the forecast period. Large organizations worldwide are at the forefront of adopting digital transformation across their business processes. Digital transformation enables large organizations to grow and maintain scalability while generating massive data. Approximately 43% of breaches, or more than double the results from the previous year, could be linked to assaults on web apps, according to Verizon'sVerizon's 2020 Data Breach Investigation Report. The personal information of 147 million people was revealed due to a web application data breach in Equifax, which cost the firm USD 1.38 billion in settlements and security upgrades. Hence, such trends drive the need for advanced application security tools over the forecast period.

By Types of Security Testing Analysis

By types of security testing, the global market is segmented into Dynamic Application Security Testing (DAST), Static Application Security Testing (SAST), Interactive Application Security Testing (IAST), and Run-Time Application Self Protection (RASP). The static Application Security Testing segment accounted for the largest market share and is estimated to grow at a CAGR of 15.5% during the projected period. Organizations are giving more attention to application security due to the increasing breaches. Organizations want to identify vulnerabilities in their applications and mitigate risks early. As organizations move to a DevOps environment, application security must be built seamlessly into their processes. Static Application Security Testing Tools (white box testing) is designed to analyze source code or compiled code versions to help find security flaws. Organizations with continuous delivery practices frequently use SAST tools to identify defects before deployment. SAST tools offer vulnerability information and remediation suggestions for development teams to resolve. Moreover, SAST is designed to be an automated application security testing and provides results consistently. It can help all major organizations curb security concerns from numerous hazards seen in desktop apps and mobile applications. Such benefits drive segment growth. 

By End-User Industry Analysis

By end-user industry, the global market is segmented into healthcare, BFSI, education, retail, government, and other end-user verticals. The BFSI segment dominated the market share and is estimated to grow at a CAGR of 17.3% during the forecast period. Because of the size of its client base and the sensitive financial information involved, the BFSI sector is one of the critical infrastructure areas that experience frequent data breaches and cyber-attacks. Additionally, financial institutions are four times more vulnerable to cyberattacks than other sectors, which is anticipated to fuel the market for application security.

Recent Developments

• September 2022 - According to a report from Oracle, SUBARU Corporation has switched its simulation and 3D visualization workloads, which are crucial for enhancing driving and collision safety performance, to Oracle Cloud Infrastructure (OCI). By adopting High-Performance Computing (HPC) on OCI, Subaru was able to shorten computation times by about 20%, increase considerable efficiency, and save operational expenses.
• September 2022 - The availability of MySQL HeatWave on Amazon Web Services was announced by Oracle (AWS). The only service that integrates OLTP, machine learning, analytics, and automation powered by machine learning within a single MySQL database is MySQL HeatWave.