Data Encryption Market Analysis

Data Encryption Market Overview

The Data Encryption market size is projected to grow from USD 14.5 billion in 2024 to USD 40.2 billion by 2032, exhibiting a compound annual growth rate (CAGR) of 16% during the forecast period (2024 - 2032). Additionally, the market size for Data Encryption was valued at USD 14.1 billion in 2023.

The key market drivers accelerating the data encryption industry's growth are the advancements in digital data transfer via smartphones and changing network security. Future years will see the industry grow even more due to the advancement of digital technology, making the telecommunications and IT sectors more susceptible to data loss or cyberattacks.

Figure 1: Data Encryption Market Size, 2023-2032 (USD Billion)

Source: Secondary Research, Primary Research, MRFR Database, and Analyst Review

Data Encryption Market Trends

Increasing numbers of data breaches to propel the market growth

Data and security breaches have become more commonplace in recent years. For instance, in June 2020, the Chartered Professional Accountants of Canada (CPA) had a cyber-attack that resulted in the loss of personal data for more than 329,000 stakeholders and members. Data protection technology and practices that assist businesses store and secure important data are urgently needed as a result of rising data breaches across all industry sectors. Companies all around the world are choosing encryption software as a crucial preventative precaution against data and security breaches. Systems and databases are kept secure because ransomware cannot compromise cryptographic security controls. Thus, encryption techniques like encryption and steganography are employed to increase data security, which in turn helps to thwart cyber threats from stealing data. This is also anticipated to fuel the expansion of the data encryption industry. Additionally, the amount of data produced by digital channels, cloud computing, and the internet of things (IoT) has grown, necessitating a greater demand for data privacy solutions. Thus, this factor is driving the market CAGR for data encryption.

Additionally, due to an increase in data theft and cybercrime occurrences, the big data and internet of things (IOTs) have greatly contributed to the expanding use of internet services and the rising demands for data protection. IoT enables the integration of sensors, actuators, radio frequency, and Bluetooth in a real world through highly networked services. Moreover, a key element boosting the market's growth for data encryption over the anticipated period is the emphasis on efficiency brought on by expanding urbanization.

Furthermore, governments of growing countries like China, South Korea, Dubai, India, Singapore, and Japan are aiming for their countries' economies to flourish, which is partly why the market is speeding. During the projected period, the overall market expansion for data encryption will be accelerated by governments' increasing use of big data analytics to improve internet services. Additionally, it is anticipated that the improvement in people's living standards would fuel the market's growth rate during the anticipated time.

However, the market for data encryption will see profitable chances due to the rising usage of various modern technologies and cloud-based services, which will accelerate market expansion for data encryption in the future. Building networking patterns makes use of cutting-edge technology including artificial intelligence, machine learning, blockchain, and big data analytics. Due to their increased application across many industries, these technologies are expanding. Over the anticipated term, all of these elements are generating a number of lucrative growth chances for the data encryption market. Thus, it is anticipated that this aspect will accelerate data encryption market revenue.

Data Encryption Market Segment Insights

Data Encryption Deployment Insights

The data encryption market segmentation has been segmented by deployment into on-premise and advanced on-premise. The on-premise segment dominated the market growth in 2021 and is projected to be the faster-growing segment during the forecast period, 2022-2030. The increasing deployment of the internet of things (IoT) and the expansion of digital channels like social media have improved endpoint data collection and company operations. This is expected to increase industry vertical demand for the on-premises deployment of data encryption.

Figure 2: Data Encryption Market by Deployment, 2021 & 2030 (USD Billion)

Source: Secondary Research, Primary Research, MRFR Database and Analyst Review

Data Encryption Vertical Insights

The data encryption market segmentation, based on vertical, IT and telecom, BFSI, retail sector, government, healthcare sector and aerospace & defense. The BFSI segment dominated the data encryption market revenue in 2021 and is projected to be the faster-growing segment during the forecast period, 2022-2030. Banks and other financial institutions regularly hold important data, including financial and client information. This information is very prone to data breaches, and in the event of one, banks may be required to pay hefty fines. The need to protect sensitive financial data from full returns and low-risk breaches is driven by the complexity of the sector and the rise of cyberthreats.

Data Encryption Regional Insights

By region, the study provides the market insights for data encryption into North America, Europe, Asia-Pacific, and the Rest of the World. North America data encryption market accounted for USD 4.9 billion in 2021 and is expected to exhibit a 43.10% CAGR during the study period because there are more people online and more sellers of encryption software in the area. The requirement to encrypt the data that travels through the network has increased as a result of the mobile wireless network's quick expansion. Due to its booming need for data encryption in its communication infrastructure and its rapid use of cloud computing, the United States outperformed all other North American nations in this industry.

Further, the major countries studied in the market report for data encryption are: The U.S., Canada, Germany, France, the UK, Italy, Spain, China, Japan, India, Australia, South Korea, and Brazil.

Figure 3: DATA ENCRYPTION MARKET SHARE BY REGION 2021 (%)

Source: Secondary Research, Primary Research, MRFR Database and Analyst Review

Asia Pacific Data encryption market is expected to grow at a significant CAGR from 2022 to 2030. The absence of storage infrastructure in the region has forced businesses to store their data in the cloud, making it the most attractive location for market players during the forecast period. The risk of thefts and data losses is rising as a result, which is fueling demand for data encryption. Additionally, the regional market has expanded as a result of increased IoT, cloud, and BYOD penetration. Further, the China Data encryption market held the largest market share, and the India Data encryption market was the fastest-growing market in the region.

Europe Data encryption market accounts for the second-fastest growing market share due to the region's developed IT and telecom industry and the growing necessity to protect the vast amounts of produced data. The use of personal computers and the Internet in the private sector is also anticipated to increase demand for encryption solutions in this area over the ensuing years. Moreover, UK Data encryption market held the largest market share, and the Germany Data encryption market was the fastest-growing market in this region.

Data Encryption Key Market Players & Competitive Insights

Major market players are spending a lot on R&D to increase their product lines, which will help the data encryption industry grow even more. Market participants are also taking various strategic initiatives to grow their worldwide footprint, including new product launches, contractual agreements, mergers and acquisitions, increased investments, market developments and collaboration with other organizations. Competitors in the industry must offer cost-effective items to expand and survive in an increasingly competitive and rising market industry.

One of the primary business strategies manufacturers adopt in the data encryption industry to benefit clients and expand the sector is manufacturing locally to reduce operating costs. In recent years, data encryption industry has provided medicine with some of the most significant benefits. The data encryption market major player such as Microsoft Corporation (US), IBM Corporation (US), Symantec Corporation (US), Intel Security (US), HP (US), Oracle Corporation (US), Gemalto (The Netherlands), Netapp Inc. (US), FireEye Inc. (US) and Vormetric Inc. (US).

An international business with a focus on computer technology and consulting is called IBM. Its corporate headquarters are in New York, US, and it was founded in 1911. IBM offers a range of cybersecurity technologies, including sophisticated fraud protection, network protection, endpoint protection, mainframe security, application security, data security, and cloud and mobile security. In December 2020, IBM introduced FHE, allowing data to stay encrypted even while being processed or analyzed on the cloud or in environments provided by third parties.

Also, the American multinational technology company Microsoft Corporation creates computer software, home appliances, laptops, and related services. The Windows line of operating systems, the Microsoft Office package, and the Internet Explorer and Edge web browsers are among Microsoft's most well-known software offerings. Microsoft is headquartered on the Microsoft campus in Redmond, Washington.

Key companies in the data encryption market include

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  Microsoft Corporation (US)

  
  


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  IBM Corporation (US)

  
  


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  Symantec Corporation (US)

  
  


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  Intel Security (US)

  
  


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  HP (US)

  
  


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  Oracle Corporation (US)

  
  


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  Gemalto (The Netherlands)

  
  


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  Netapp Inc. (US)

  
  


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  FireEye Inc. (US)

  
  


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  Vormetric Inc. (US)

  
  

Data Encryption Industry Developments

On Apr. 11, 2023, Menlo Security, a leading provider of browser security solutions, published the results of the 10th Annual Cyberthreat Defense Report (CDR) by the CyberEdge Group. The report, partially sponsored by Menlo Security, highlights the augmenting importance of browser isolation technologies to combat ransomware and other malicious threats.

The research revealed that most ransomware attacks include threats beyond data encryption. According to the report, around 51% of respondents confirmed that they have been using at least one type of browser or Internet isolation to protect their organizational data, while another 40% are about to deploy data encryption technology. Furthermore, around 33% of respondents noted that browser isolation is a key cybersecurity strategy to protect against sophisticated attacks, including ransomware, phishing, and zero-day attacks.

On Feb.14, 2023, EnterpriseDB, a relational database provider, announced the addition of Transparent Data Encryption (TDE) based on open-source PostgreSQL to its databases. The new TDE feature will be shipped along with the firm's enterprise version of its database. TDE is a method of encrypting database files to ensure data security while at rest and in motion.

Adding that most enterprises use TDE for compliance issues helps ensure data encryption on the hard drive and files on a backup. Before the development of built-in TDE, enterprises relied on either full-disk encryption or stackable cryptographic file system encryption.

On Jan.25, 2023, Researchers from the Tokyo University of Science, Japan, announced the development of a faster and cheaper method for handling encrypted data while improving security. The new data encryption method developed by Japanese researchers combines the best of homomorphic encryption and secret sharing to handle encrypted data.

Homomorphic encryption and secret sharing are key methods to compute sensitive data while preserving privacy. Homomorphic encryption is computationally intensive and involves performing computational data encryption on a single server, while secret sharing is fast and computationally efficient.

In this method, the encrypted data/secret input is divided and distributed across multiple servers, each performing a computation, such as multiplication, on its data. The results of the computations are then used to reconstruct the original data.

September 2022: Convergence Technology Solutions Corp., a supplier of software-enabled IT and cloud solutions, declared that it has obtained certification in Canada to sell and deploy IBM zsystems and LinuxONE.

November 2019: Penta Security Systems announced that it has been selected as a finalist for the 2020 SC Magazine Awards, which are given by SC Media and celebrated in the United States. As a result, MyDiamo from Penta Security has been named the Best Database Security Solution of 2020. Additionally, this will result in the expansion of common-level encryption and improve the open-source DBMS installation procedure.

Data Encryption Market Segmentation

Data Encryption Deployment Outlook (USD Billion, 2018-2030)

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  On-Premise

  
  


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  Advanced On-Premise

  
  

Data Encryption Vertical Outlook (USD Billion, 2018-2030)

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  IT and Telecom

  
  


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  BFSI

  
  


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  Retail Sector

  
  


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  Government

  
  


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  Healthcare Sector

  
  


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  Aerospace & Defense

  
  

Data Encryption Regional Outlook (USD Billion, 2018-2030)

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  North America

  
  
  
  
  • US
  
  
  • Canada
  
  
  
  

• Europe
  
  
  
  • Germany
  
  
  • France
  
  
  • UK
  
  
  • Italy
  
  
  • Spain
  
  
  • Rest of Europe
  
  
  
  

• Asia-Pacific
  
  
  
  • China
  
  
  • Japan
  
  
  • India
  
  
  • Australia
  
  
  • South Korea
  
  
  • Australia
  
  
  • Rest of Asia-Pacific
  
  
  
  


• Rest of the World
  
  
  
  • Middle East
  
  
  • Africa
  
  
  • Latin America