Software-Defined Security Market Size, Share & Trends Analysis Report By Component (Solution, Services), By Enforcement Point (Application and Mobile Device Security, Virtual Machines (VMs)/Server/Storage Security, Network Security Gateways, Others), By Deployment Mode (Cloud, On-premise), By End-User (Telecom Service Providers, Cloud Service Providers, Enterprises) and By Region(North America, Europe, APAC, Middle East and Africa, LATAM) Forecasts, 2023-2031

Market Overview

The global software-defined security market size was valued at USD 7.09 billion in 2022. It is estimated to reach USD 65.62 billion by 2031, growing at a CAGR of 28.05% during the forecast period (2023–2031). In recent years, a significant increase in cyber threats has increased the demand for robust security systems, thereby driving the global software-defined security market. Due to this rise in the cases of cyberattacks, there has also been a surge in the formulation of stringent laws and regulations for cybersecurity set by the government and regulatory bodies, thereby fostering global market expansion.

Software-defined security (SDSec) is a cybersecurity solution that separates the security functions from the hardware and converts them into software modules. SDSec facilitates the centralized administration, automation, and coordination of security regulations across diverse environments, including cloud, on-premise, and hybrid setups. This notion is a component of the broader movement known as Software-Defined Networking (SDN) and is categorized under Software-Defined Everything (SDx).

Organizations can enhance their flexibility, efficiency, and responsiveness in dealing with constantly changing cybersecurity concerns by implementing a software-defined security approach. This method is especially applicable in cloud computing, where conventional security models based on perimeters may be less efficient because of the dynamic and distributed nature of contemporary IT infrastructures.

Market Dynamics

Global software-defined security market drivers

Increasing cyber threats

The widespread presence of connected devices, vast amounts of data, and numerous apps significantly raise the probability of cyberattacks and data breaches. Due to the rising frequency and complexity of cyber attacks, it has become necessary to implement more advanced and adaptable security measures. SDSec enables immediate adjustment to emerging threats, rendering it an essential solution in the presence of evolving cyber hazards. IBM Security X-Force 2023 reported a significant rise in global cybersecurity vulnerabilities. The total number of tracked vulnerabilities in 2022 increased to 23,964, up from 21,518 in 2021.

According to a survey issued by Cybersecurity Ventures, the estimated global cost of cybercrime is predicted to rise to USD 10.5 trillion annually by 2025, a substantial increase from USD 3 trillion in 2015. Consequently, according to a recent Gartner survey, 80% of firms expressed their intention to augment their expenditure on information security in 2024. Therefore, these factors are expected to propel the growth of the worldwide software-defined security market.

Stringent cybersecurity rules

Globally, governments and regulatory agencies have enforced stringent cybersecurity laws and guidelines, such as the Payment Card Industry Data Security Standard (PCI DSS), the Health Insurance Portability and Accountability Act (HIPAA), and the General Data Protection Regulation (GDPR). These measures are in place to safeguard the security and privacy of personal and sensitive data.

Cybersecurity threats and regulations drive the SDSec market. SDSec offers a comprehensive and holistic security solution that effectively tackles the complex and ever-changing security requirements and problems of the modern cyber landscape. SDSec can assist companies and service providers adhere to cybersecurity requirements and laws by offering audit trails, reports, and logs of security operations and occurrences.

Global software-defined security market restraint

Lack of awareness and expertise

The concept of defined security is a recent and developing notion in cybersecurity, and numerous businesses and service providers need more awareness of its advantages and potential. Moreover, the implementation and management of SDSec necessitates a significant level of technical proficiency and aptitude due to its utilization of intricate and advanced software modules and algorithms. Hence, the limited knowledge and proficiency among potential customers and end users significantly impede the adoption and expansion of the SDSec industry.

Global software-defined security market opportunities

Strategic initiatives by key players

The major market participants engage in diverse strategic initiatives, such as product launches, collaborations, expansions, acquisitions, etc., to augment their market dominance. For instance, in February 2019, Symantec acquired the company Luminate Security, expanding its cloud-native offering with software-defined perimeter technologies. Symantec asserts that this technology will expand its Integrated Cyber Defense Platform to users, enabling them to access workloads and apps without limitations on deployment location or infrastructure.

Moreover, in September 2019, LookingGlass Cyber Solutions, a prominent company specializing in intelligence-driven risk management, officially released the LookingGlass Aeonik Security Fabric. This advanced security architecture is designed to address the challenges of modern network environments, which are becoming more interconnected and flexible. Aeonik is an innovative cybersecurity solution with an advanced intrusion detection and prevention system (IDPS). It effectively detects, investigates, disrupts, and responds to malicious actions in the network, promptly identifying and countering attacks as they occur. Therefore, these measures are expected to generate opportunities for market expansion.

Regional Analysis

Based on region, the global software-defined security 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 software-defined security market shareholder and is expected to expand substantially during the forecast period. The global SDSec market is projected to dominate North America due to numerous leading and innovative SDSec providers, including Cisco Systems, Intel Corporation, VMware, Symantec Corporation, and Palo Alto Networks. The region's substantial vulnerability to heightened cyber threats and attacks propelled the North American software-defined security market. As per the data from the Identity Theft Resource Center (ITRC), there has been a gradual increase in the average number of breaches in the United States in recent years. The United States experienced a surge in data breaches, escalating from 1,506 breaches in 2017 to 1,826 breaches in 2021. Moreover, as per the data presented in IBM's 2022 Cost of Data Breach Report, Canada ranked third in the highest average overall cost incurred due to data breaches. In 2021, the country's average cost of data breaches was USD 5.40 million, which is an increase from USD 4.50 million in 2020.

Furthermore, the region exhibits robust and all-encompassing legislation and regulations, as well as an increased consciousness about data security and privacy concerns. This has led to a higher demand for efficient security devices. Moreover, the National Security Agency (NSA) published the Cybersecurity Information Sheet (CSI) titled "Managing Risk from Software Defined Networking Controllers" in 2023. The research offers suggestions to assist network administrators of National Security Systems (NSS), Department of Defense (DoD), and Defense Industrial Base (DIB) in reducing the potential dangers linked to software-based network management solutions, such as Software Defined Networking Controllers (SDNC). It is anticipated that these government measures will generate opportunities for market expansion.

The Asia-Pacific region has experienced a rapid and significant digital revolution, particularly in the period encompassing and following the pandemic. Numerous businesses have quickly embraced novel technologies and digital platforms, frequently neglecting to safeguard them, thereby creating vulnerabilities susceptible to exploitation sufficiently. The proliferation of digitization has broadened the potential targets for cybercriminals. Check Point Research's analysis reveals that the Asia-Pacific region experienced the most significant rise in weekly cyberattacks compared to the previous year, with an average of 1,835 attacks per organization during the first quarter of 2023. On the contrary, the worldwide average was 1,248 attacks per week. This pattern raises concerns over the factors behind this change and the necessary actions to tackle the increasing cyber risks in the area.

Furthermore, there has been a significant increase in the usage of cloud-based solutions in the region due to their various benefits in streamlining operations for end-user sectors. As per the August 2023 findings by EY-FICCI, 49% of enterprises in India are adopting cloud technology to update their data infrastructures. Larger organizations lead the way with a 55% adoption rate. Moreover, 78% of firms are adopting cloud methods to modernize their applications, while 40% of organizations are leveraging the cloud to enhance workforce efficiency and facilitate collaboration. Consequently, the growing adoption of cloud deployment is anticipated to strengthen the software-defined security market in this region.

Segmental Analysis

The global software-defined security market is bifurcated into components, enforcement points, deployment modes, and end-users. 

Based on components, the global software-defined security market is bifurcated into solutions and services. 

The solution segment dominates the global market. The solution segment can be categorized into security software, control automation and orchestration solutions, security compliance and policy management, performance management and reporting, and others. The segment is expected to dominate the market as many companies and service providers implement SDSec solutions to bolster their security posture and capabilities.

Based on enforcement points, the global software-defined security market is bifurcated into application and mobile device security, virtual machines (VMS)/server/storage security, network security gateways, and others. 

Network security gateways are essential components, either in the form of devices or software solutions, that safeguard computer networks from a wide range of potential risks and dangers. They serve as a protective barrier between internal network resources and external entities, such as the Internet. Their purpose is to monitor and regulate the flow of network traffic entering and leaving the network.

Network security gateways aim to safeguard the network and its users against unauthorized access, harmful actions, and various security hazards. The network security gateway market is projected to experience the greatest CAGR due to increased adoption by companies and service providers. These gateways protect network traffic and data between virtual and physical network domains.

Based on deployment mode, the global software-defined security market is segmented into on-premise and cloud. 

The cloud segment owns the highest market share. Cloud deployment entails hosting and executing applications, services, or resources on cloud infrastructure rather than local servers or personal PCs. Traditionally, enterprises were required to allocate resources and manage their physical servers and networking equipment to operate their applications. Third-party cloud service providers offer these resources through cloud deployment.

The growing dominance in the global market is due to the increasing number of organizations and service providers transferring their workloads and applications to the cloud environment. Moreover, the cloud segment is projected to experience the largest compound annual growth rate (CAGR) due to the increasing preference of organizations and service providers for cloud deployment. This preference is driven by the several advantages of the cloud, including scalability, agility, efficiency, and cost reduction.

Based on end-users, the global software-defined security market is divided into enterprises, telecom service providers, and cloud services.

Cloud service providers (CSPs) are progressively implementing Software-Defined Security (SDSec) to tackle the evolving threats and fulfill the ever-changing requirements of cloud settings. Cloud environments frequently encounter varying demands. SDSec enables Cloud Service Providers (CSPs) to adjust security measures in real-time according to the level of demand, ensuring optimal allocation of resources.

SDSec facilitates the automation of security policies, simplifying the enforcement and updating of policies across a dynamic cloud architecture. Automation aids in mitigating human mistakes and enables prompt response to security events. The cloud service provider segment is projected to experience substantial growth, as many providers use SDSec solutions to offer safe and dependable services to their customers.

Recent Developments

• October 2023- Tata Elxsi announced a collaboration with the Indian Institute of Science (IISc) to create a solution for automotive cyber security jointly. This collaboration falls under the existing Memorandum of Understanding (MoU) between the two organizations. Tata Elxsi's expertise in artificial intelligence and machine learning will be utilized in developing software-defined vehicles (SDV) and electric vehicle (EV) solutions. This collaboration will also benefit from the advanced research conducted at the Indian Institute of Science (IISc) in Bengaluru.
• October 2023- Versa Networks, a prominent company in AI/ML-powered Unified Secure Access Service Edge (SASE) and Software-Defined WAN (SD-WAN), introduced Versa Secure SD-LAN. This innovative solution is the first in the industry to provide a software-defined branch and campus Local Area Network (LAN) solution that offers Zero Trust and IoT Security directly at the LAN Edge.