Email Encryption Market

Market Overview

The global email encryption market size was valued at USD 5.38 billion in 2022. It is estimated to reach USD 27.86 billion by 2031, growing at a CAGR of 20.05% during the forecast period (2023–2031).

There has been a surge in email data breaches in recent years, increasing the demand for email encryption to enhance the security of emails sent and received. Moreover, the stringent regulatory policies framed by several cybersecurity organizations also include email encryption rules, followed by several end-user industries, thereby fostering market expansion.

Email encryption is a security solution that entails encrypting the content of an email communication to safeguard it against unauthorized access. Email encryption is the procedure of converting unencrypted plain-text emails into cipher text, which can only be deciphered by individuals who have been granted authorization. Email encryption is the main objective of safeguarding the secrecy and privacy of delicate information exchanged over email.

Email messages without encryption are typically sent in plain text, leaving the content open to reading and interception by hackers or other malevolent entities with access to the communication channels. Various techniques can be employed to accomplish email encryption, including symmetric, asymmetric, identity-based, and hybrid encryption. Email encryption systems commonly incorporate functionalities such as encryption key administration, digital signatures, certificate administration, policy enforcement, and audit trails.

Market Dynamics

Global Email Encryption Market Drivers

Increasing Number of Email Data Breaches 

An important factor fueling the growth of the email encryption market is the rising frequency of email data breaches, which provide a significant risk to the confidentiality and security of personal and business information. Statista reports that the worldwide email subscriber count reached 4.26 billion in 2022 and is projected to increase to 4.73 billion by 2026. Approximately 306 billion emails were exchanged daily across the globe in 2020.

Due to its extensive usage, email continues to pose a significant cybersecurity risk, with around 94% of malware being sent through email in 2021, according to the Egress. Similarly, as stated in Hornetsecurity's Cyber Security Report 2024, phishing remains the predominant method of email attacks, representing 39.6% of all email threats. Email encryption mitigates these losses by safeguarding the email content and attachments against unwanted access or manipulation.

Stringent Regulatory Compliances

The increasing need for regulatory compliance, particularly in sectors such as banking, financial services, insurance, healthcare, government, and defense, where there is regular transmission of sensitive data over email, is a significant factor driving the email encryption market. Regulations and standards like the General Data Protection Regulation (GDPR), the Payment Card Industry Data Security Standard (PCI DSS), the Health Insurance Portability and Accountability Act (HIPAA), and the Federal Information Security Management Act (FISMA) require organizations to put in place adequate safeguards to protect the privacy and security of personal and financial data, including email encryption. If these rules are broken, there could be severe financial penalties, legal action, reputational damage, and diminished customer confidence.

Global Email Encryption Market Restraint

Lack of Awareness 

A significant obstacle encountered by the email encryption market is a need for more understanding and acceptance among users, particularly in small and medium organizations (SMEs), where the prevailing opinion is that email encryption is intricate, expensive, and time-consuming. Many users need more awareness regarding the advantages and significance of email encryption and the existence of user-friendly and cost-effective solutions in the market.

Additionally, certain users may need more support towards embracing email encryption due to concerns around the potential loss of access to their encrypted emails in the event of key loss or corruption or the inconvenience associated with keeping numerous encryption keys and certificates. Hence, it is imperative to implement more educational and awareness initiatives and more user-friendly and efficient measures to enhance the uptake of email encryption among consumers.

Global Email Encryption Market Opportunities

Integration of AI and ML Technologies

Integrating artificial intelligence (AI) and machine learning (ML) technology can improve email encryption solutions' performance, efficiency, and usability. AI and ML can be utilized to automate and enhance different facets of email encryption, including the development, administration, and distribution of encryption keys, enforcement of policies, detection of anomalies, prevention of threats, and authentication of users. AI and ML can also enhance user experience and happiness by offering customized and adaptable encryption solutions that align with the user's preferences, behavior, and context. Consequently, market participants are integrating AI and ML technology to improve email security.

For instance, in February 2023, SlashNext, a prominent SaaS-based Integrated Cloud Messaging Security provider for email, web, and mobile platforms, introduced Generative HumanAI™. This groundbreaking artificial intelligence solution utilizes generative AI to protect against sophisticated threats such as advanced business email compromise (BEC), supply chain attacks, executive impersonation, and financial fraud. SlashNext now offers the most extensive cloud email protection, which includes defense against link-based, attachment-based, and natural language-based BEC attacks. As a result, these factors give rise to opportunities to expand the market.

Regional Analysis

Based on region, the global email encryption market is bifurcated into North America, Europe, Asia-Pacific, Latin America, and the Middle East and Africa.

North America Dominates the Global Market

North America is the most significant global email encryption market shareholder and is expected to expand substantially during the forecast period. The global email encryption market is projected to be dominated by North America due to the abundance of email encryption solution providers and the widespread acceptance of email encryption across various industries, particularly in the United States and Canada. The growing prevalence of remote work and the extensive use of mobile devices have led to an increased need for email communication solutions that are both safe and adaptable. According to Upwork, around 32.6 million Americans are projected to work remotely by 2025, accounting for approximately 22% of the total employment.

Furthermore, the region exhibits a robust legislative framework and a heightened consciousness regarding data security and privacy concerns, fueling the need for email encryption solutions. President Biden issued Executive Order 14028, "Improving the Nation's Cybersecurity." The Executive Order (EO) requested fresh suggestions on enhancing the security of software supply chains and other crucial cybersecurity operations, which have subsequently been released. The executive order required federal government institutions to adopt a stronger, more secure IT infrastructure that follows the zero-trust concept. These government initiatives are anticipated to generate opportunities for market expansion.

The European region is expected to grow substantially due to its widespread adoption of email encryption solutions across numerous industries, particularly in the United Kingdom, Germany, and France. Furthermore, the implementation of data protection and privacy requirements by regulatory agencies in this area stimulates the growth of the email encryption business. An example is the European Union's implementation of the General Data Protection Regulations (GDPR), which established clear norms and duties for institutions that engage in business with European residents to ensure consumer data security.

Furthermore, the General Data Protection Regulation (GDPR) is a compliance framework established by the European Union renowned for its stringent information management measures. In accordance with the GDPR, organizations are required to safeguard consumer data during its transfer and processing, which also encompasses communications. Therefore, it is imperative to encrypt emails and obscure any sensitive and confidential data both on the server and during transmission. All of these factors collectively lead to the expansion of the regional market.

The Asia-Pacific region is expected to experience the highest growth rate in the global email encryption market. This is primarily attributed to the rapid expansion of the IT, telecommunications, BFSI, healthcare, retail, and e-commerce sectors. These businesses generate a substantial volume of email data that requires safeguarding against cyber threats. The region has a substantial and expanding population of email users, particularly in China, India, and Japan, generating a vast potential market for email encryption solutions. For example, the number of email subscribers in India increased from 34.9 million in 2011 to 200 million in 2018, representing a growth of almost 400%. This development has been brought about by the increasing prevalence of the Internet and the widespread adoption of smartphones in India. Moreover, the Asia-Pacific region is experiencing a growing acceptance of cloud-based and mobile-based email encryption solutions, providing consumers with enhanced ease and accessibility.

Segmental Analysis

The global email encryption market is bifurcated into component, deployment, enterprise size, and end-user.

Based on components, the global market is bifurcated into solutions and services. 

Email encryption services are specifically developed products or services that enhance the security of email messages by employing encryption techniques. This process makes it challenging for unauthorized individuals to access and comprehend the email information. The services market is projected to experience a higher CAGR due to increased demand for support and help in implementing, maintaining, and updating email encryption solutions.

Based on deployment, the global market is segmented into on-premise and cloud. 

The cloud segment owns the highest email encryption market share. Cloud-based email encryption involves the use of encryption methods to protect email conversations. These encryption mechanisms are deployed and controlled within a cloud environment. The cloud sector is projected to experience rapid growth due to the advantages of cloud-based email encryption solutions, such as increased scalability, flexibility, cost-effectiveness, and seamless interaction with other cloud-based apps and services. Moreover, as to Cisco Systems, cloud email services will be adopted by 70% of both public and private enterprises by 2021. The fact that organizations can access their email from any location and on any device indicates that protection against increasingly prevalent threats is critical.

Based on enterprise size, the global market is bifurcated into large enterprises and small and medium enterprises (SMEs). 

Large enterprises are classified as organizations with notable attributes such as substantial revenue, assets, personnel, extensive scale, and global reach. A large enterprise is defined as one that satisfies at least one of two criteria, i.e., it must have a minimum of 5,000 employees, generate an annual revenue exceeding 1.5 billion euros, and have a balance sheet totaling more than 2 billion euros. These corporations generally maintain a significant foothold in the market and conduct business at the domestic or global level. There are numerous sectors in which large organizations can be located, such as finance, manufacturing, healthcare, and technology.

Moreover, major corporations, such as Apple, Microsoft, ExxonMobil, Toyota, and various others, constitute examples of large enterprises. The growth rate of the large organizations segment is significant due to their abundant resources and capacity to spend on email encryption solutions. Large enterprises have a greater need and demand for data security and compliance.

Based on end-users, the global email encryption market is divided into BFSI, IT and telecommunication, healthcare and pharmaceutical, government and defense, energy, and others. 

The BFSI segment dominates the global market. The segment is expected to dominate the market because it handles substantial volumes of sensitive and confidential data, including customer information, financial transactions, and credit card details. These operations necessitate stringent security measures and privacy protection. Cyberattacks frequently target email, and the BFSI industry is a primary focus for hackers aiming to obtain vital financial data. Unauthorized persons cannot comprehend email encryption safeguards against data breaches by guaranteeing that intercepted emails without access to the encryption keys.

Multiple rules and compliance standards, including GDPR, HIPAA, and PCI DSS, also bind the BFSI sector. These requirements enforce the safeguarding of client data and necessitate the utilization of encryption to protect sensitive information while it is being transmitted. By implementing email encryption, BFSI firms can ensure compliance with legal and regulatory standards.

Recent Developments

• November 2023- Mozilla Ventures announced a financial investment in Sendmarc, a prominent company specializing in email and domain cybersecurity. Sendmarc focuses on mitigating email impersonation, specifically phishing and spoofing, responsible for over 90% of crimes.
• March 2023- Google made client-side encryption (CSE) available for Gmail and Calendar following a period of testing that took place in late 2022.