The global data governance market size was valued at USD 2.1 billion in 2021 and is estimated to reach an expected value of USD 11.68 billion by 2030, registering a CAGR of 21% during the forecast period (2022-2030).
Huge investments are being driven in digital transformation, with organizations adopting advanced technologies and connected devices, generating enormous data across multiple departments. This data needs to be organized and create value to drive business.
Poor data management would compromise data privacy, which may cause process inefficiencies and data duplications, and can incur penalties for non-adherence to data regulatory compliances. Here, the data governance solution is critical in streamlining the data collection method, de-silo, process, and managing internal and external data. Over the projected period, implementing IoT devices and applications across various end-user sectors is anticipated to push the global market's demand even more.
Regulatory and compliance mandates in various regions related to data are driving growth in the deployment of data governance solutions as more and more countries to emphasize the push toward managing data.
Over the last decade, governing data has undergone a massive transformation, and various methods are being established to standardize, integrate, and protect such information. The EU's General Data Protection Regulation (GDPR), implemented way back in 2018, came as a masterstroke to such data governance arrangements. The number of European legislation requiring data compliance is expected to increase 48% annually, accounting for 23% of the world's interconnection bandwidth.
Such regulations are likely to impact the banking and financial services industries and will emerge as a growing trend globally. Such factors are expected to drive the market. However, once established, this regulatory requirement will ultimately encompass all enterprises of any size in all sectors.
In addition to the rising regulatory and compliance mandates, the market is also driven due to data volume growth worldwide. Such growth explosion has enabled governments to support using data governance techniques in different industries for better control, security, and trustworthiness.
It is anticipated that the increase in data traffic will have a beneficial impact on the market expansion. Enterprises across the globe are moving their workloads onto the cloud, owing to the data feasibility and easy recovery benefits offered by the cloud. For instance, according to a LogicMonitor survey, 83% of enterprise workloads were anticipated to be run on the cloud by the end of 2020.
Within the telecom sector, players like Vodafone and Idea have reported data volume growth of `10.6% q-o-q and 40.4% y-o-y to post the highest growth during the initial months of the pandemic. The 5G deployments worldwide are expected to propel data growth further. Such developments mandate the need for a better data governance strategy.
While rising regulatory and compliance mandates and data volume growth are expected to drive the market growth, factors such as the varying structure of regulatory policies and data address validation could hamper the market growth during the forecast period. For example, the United States could move forward on federal privacy legislation proposed earlier. However, state officials expect resistance from states to such universally applied regulations. A federally mandated, all-encompassing law is not likely to happen anytime sooner. This allows for a fragmented approach that could lead to multiple versions of such data privacy regulations. The presence of 'n' such different versions could risk the work of data experts by 'n' times, thereby increasing costs for the organization and reducing productivity.
Further, according to the Personal Information Protection and Electronic Documents Act (PIPEDA), depending on the business location, one may need to store the data within Canadian borders. Many companies may have to follow the order. Factors such as these could have a negative impact on the overall market growth.
Organizations have initiated to look more closely at how to learn about continuously flowing data. Organizational responsiveness and effectiveness are enhanced when they can respond as soon as events are generated. Any business that takes money handles, stores customer and payment information, and collaborates with other businesses must adhere to specific regulations. These rules establish some requirements for the architecture and DevOps processes. DevOps is a set of procedures that speeds up and improves the dependability of the processes between IT and software development teams during software development, testing, and delivery. The adoption of DevOps and introduction of a data governance program are closely related.
The global data governance market is segmented by deployment, organization size, component, end-user industry, and region.
By deployment, the global data governance market is segmented into cloud and on-premise. The cloud segment accounted for the largest market share and is estimated to grow at a CAGR of 23.1% during the forecast period. One of the main advantages of cloud-based services is the ability to allocate assets precisely. It allows users to remotely audit and monitors the observance of existing rules, including IT guidelines that adhere to existing services contracts and inherent SLAs with Cloud Service Providers. Cloud management software provides cost, security, governance, and performance management functions over a multi-cloud environment consolidating information across multiple cloud deployments to enable proactive cloud management. All such factors drive segment growth.
By organization size, the global data governance market is segmented into large-scale and small- and medium-scale businesses. The large-scale business segment accounted for the largest market share and is estimated to grow at a CAGR of 19.6% during the projected period. Leading companies have enabled digital use cases worth billions of dollars while removing millions of dollars in costs from their data ecosystems. Data governance is one of the fundamental distinctions between businesses that realize this value and those that don't. Furthermore, businesses underinvested in governance exposed their enterprises to genuine regulatory risk, which may be expensive. This signifies the importance of data governance in large-scale enterprises.
By component, the global data governance market is segmented into software and service. The software segment accounted for the largest market share and is estimated to grow at a CAGR of 20.4% during the forecast period. Data governance software helps organizations manage internal and external data to improve its quality, compliance, usage, and storage. Data governance software products also monitor security and metadata repositories. When implemented appropriately and effectively, introducing a software package with tools to support the data governance process will make the process much more acceptable and enjoyable for the key stakeholders involved. Both data quality and master data management (MDM) are data governance strategies or supporting activities. All such factors drive segment growth.
By business function, the global data governance market is segmented into operation and IT, legal, finance, and other business functions. The finance segment accounted for the largest market share and is estimated to grow at a CAGR of 23.4% during the forecast period. A company's finance data strategy defines how an organization aims to leverage its data to achieve economic transformation while accommodating the business environment's constraints. A data governance strategy's practical implication is that the officers responsible for managing data and information utilize a set of definitions to govern data or information better, enforced by improved management capabilities. This assists data and information governance officers in creating order with the increasing amounts of data and information. All such factors drive segment growth.
By end-user industry, the global data governance market is segmented into IT and telecom, healthcare, retail, defense, BFSI, and other end-user industries. The BFSI segment dominated the global data governance market and is estimated to grow at a CAGR of 21.5% during the forecast period. Various BFSI companies have been sued for governance issues that have created an urgency for data governance solution adoption. For instance, in October 2020, banking regulators hammered Citigroup with a USD 400 million punishment, a restriction on new acquisitions without regulatory permission, and a long list of changes to the bank's risk management. The OCC penalized Citi for "the bank's dangerous or unsound banking operations for its ongoing inability to create efficient risk management and data governance processes and internal controls." The Citi Group will have to develop data governance plans and approve them by OCC. Such strict regulations are because the BFSI industry has a large amount of confidential data, including the personal identifiers of customers. Moreover, BFSI companies are shifting to data governance for better data privacy and management practices.
By region, the global data governance market is segmented into North America, Europe, Asia-Pacific, Latin America, and Middle East & Africa.
North America accounted for the largest market share and is estimated to grow at a CAGR of 20.4% during the forecast period. The market for data governance in North America is driven by strict regulations regarding data privacy and management. For instance, the California Consumer Privacy Act is a piece of consumer privacy legislation passed in California on June 28th, 2018. The CCPA affects businesses that engage with California residents as well as those that are based there. It affects businesses both inside and outside of the United States. This regulation was driven by the incident of Facebook's data misuse.
Further, the region saw an increasingly high focus among organizations to cut budgets due to efficient data management. Further, the market had witnessed an urgent need for data governance with the pandemic's outbreak. Several organizations focus on restructuring their policies the focus on remote working. All such factors drive market growth.
Europe is the second largest region. It is anticipated to reach an expected value of USD 3 billion by 2030, registering a CAGR of 21.5% during the forecast period. The region is in high focus on developing as a data-driven region. In this focus, the European Union, on November 25th, 2020, published a Proposal for a Regulation on European data governance(the"Data Governance Act"), one of several actions taken in support of the EU's data policy, intends to establish the EU as a pioneer in the data-driven society. The regulation does not intend to create new obligations on companies processing personal data, the processing of which remains subject to the GDPR. With the increasing adoption of the BYOD strategies, companies in the region focus on adopting solutions compatible with employees' devices such as smartphones and tablet laptops. In this focus, companies are launching data governance apps. For instance, in February 2021, dramds.com ltd., a British technology company, announced the release of the world's most comprehensive enterprise mobile application and solution for Data Governance compliance utilizing mobile phones and tablets.
Asia-Pacific is the third largest region. The region of Asia-Pacific is about to take the lead globally in terms of digital innovation. Asia-Pacific is projected to hold a sizeable portion of the data governance market due to the region's growing digital advancements, including cloud computing, the Internet of Things (IoT), and big data analytics. Rising regulatory requirements would also aid the expansion of the data governance industry in the Asia-Pacific region. For example, the China Banking and Insurance Regulatory Commission (CBIRC) released the data governance guideline for banking financial institutions to enhance the authenticity, accuracy, timeliness, and integrity of data and safeguard customers' privacy through improved data security measures. People have previously been protected from data processing for commercial interests in China. The government, though, wasn't previously constrained by the laws. Due to the evolving conditions, it seeks to exert total control over residents' life. It uses cutting-edge artificial intelligence (AI) technologies to observe, follow, and evaluate their conduct. In addition, in a meeting with Japan's Prime Minister in June 2019, the Singapore government indicated that they would work together to set up data governance rules for a digital economy regarding privacy and data security. In cementing such initiatives in the region, the data governance solutions demand is expected to rise.
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