New York, Aug. 14, 2023 (GLOBE NEWSWIRE) -- The global encryption software market size is slated to expand at ~15% CAGR between 2023 and 2035. The market is poised to garner a revenue of USD 70 billion by the end of 2035, up from a revenue of ~USD 13 billion in the year 2022. Many organizations are now allowing employees to bring their own devices (BYOD) to work. This can increase the risk of data breaches, as employees may not be as careful with their personal devices as they are with their work devices. This has led to an increased demand for encryption software to protect data stored on BYOD devices. Many companies are increasingly using cloud services and digital technologies for data storage, and data breaches are becoming more common around the world. The use of mobile services and other wireless communication technologies has increased steadily.
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Furthermore, increasing demand for cloud-based encryption software and growing concern of people about losing sensitive data contribute to the growth of the market. The number of cyberattacks and data breaches has been increasing in recent years. In 2021, there were over 623 million data breaches worldwide, exposing over 20 billion records. This has led to a growing demand for encryption software to protect sensitive data from unauthorized access.
Encryption Software Market: Key Takeaways
- Market in Asia Pacific to propel highest growth
- The software segment to garner the highest growth
- Market in North America to grow at a highest rate
Increasing Regulatory Standards for Security across the Globe to Boost Market Growth
To improve security measures, the government has introduced regulatory standards for data protection security and compliance. Organizations are increasingly promoting the use of encryption software solutions to increase consumer security by preventing cyber threats and providing secure data transmission opportunities. It is estimated that by the end of 2024, more than 70% of the world's population will have personal data protection under the new data protection regulations.
The increasing use of smartphones and the introduction of social networking and other online applications for educational, employment, financial and entertainment purposes are driving the growth of the encryption software market. According to reports, more than 5 billion people will use the internet worldwide by 2023, accounting for more than 64% of the world's population. Unauthorized access to data storage is increasing day by day due to abuse of privileged access by employees, the presence of malware, weak passwords, increasing hacking skills and accidental access grants.
Encryption Software Market: Regional Overview
The market is segmented into five major regions including North America, Europe, Asia Pacific, Latin America, and the Middle East and Africa region.
Expanding cyberattacks and data breaches to Drive the Market Growth in Asia Pacific Region
The encryption software market in Asia Pacific region is estimated to garner the largest revenue by the end of 2035. The rising number of cyberattacks and data breaches has heightened the demand for encryption software to protect sensitive information. According to a report by the Asia Pacific Economic Cooperation (APEC), cybercrime costs the Asia Pacific region an estimated USD 1.745 trillion annually. This alarming figure underscores the need for robust encryption solutions to safeguard data. The implementation of data protection regulations, such as the General Data Protection Regulation (GDPR) and Personal Data Protection Act (PDPA), has compelled organizations to adopt encryption technologies. In Asia Pacific, countries like Singapore, South Korea, and Australia have enacted comprehensive data protection laws. For instance, Singapore's PDPA mandates organizations to protect personal data through reasonable security arrangements, including encryption.
The increasing adoption of cloud computing and storage services has raised concerns about data privacy and security. Encryption software market offers a solution by encrypting data before it is stored in the cloud. The proliferation of smartphones and mobile devices has created a need for encryption software to secure data stored on these devices. Asia Pacific is one of the fastest-growing regions in terms of smartphone adoption.
Growing Regulatory Compliance Requirement to Propel the Growth in the North America Region
The North America encryption software market region is estimated to garner the highest CAGR by the end of 2035. North America has witnessed a significant rise in data breaches and cyberattacks targeting organizations across various sectors. According to the 2021 Cost of a Data Breach Report by IBM Security, the average cost of a data breach in the United States reached USD 9.05 million in 2021, making robust encryption solutions crucial for data protection. The region has stringent data protection and privacy regulations, such as the California Consumer Privacy Act (CCPA) and Health Insurance Portability and Accountability Act (HIPAA). These regulations mandate organizations to implement encryption measures to safeguard sensitive data. North America has been at the forefront of cloud computing adoption, with a significant number of organizations migrating their infrastructure and data to the cloud.
Encryption is vital for protecting data stored and transmitted through cloud services. There has been a growing awareness and concern about data privacy among individuals and organizations in North America. As a result, there is a heightened demand for encryption software to secure sensitive data, both at rest and in transit.
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Encryption Software, Segmentation by Component
- Software
- Services
Amongst these segments, the software segment is anticipated to hold the largest share over the forecast period. Organizations across various industries are undergoing digital transformation to enhance operational efficiency and competitiveness. This has led to increased investment in software solutions that enable automation, data analysis, collaboration, and process optimization. According to IDC, worldwide spending on digital transformation technologies and services is expected to reach USD 2.3 trillion in 2023. The adoption of cloud computing has been a major growth driver for the software segment.
Cloud-based software solutions offer scalability, flexibility, and cost-efficiency, attracting organizations of all sizes. The Software as a Service (SaaS) model has gained immense popularity due to its subscription-based pricing, ease of implementation, and regular updates. Organizations prefer SaaS solutions as they eliminate the need for extensive IT infrastructure and maintenance costs. The growing importance of data-driven decision-making has led to increased demand for software solutions that enable data analytics. Organizations are leveraging advanced analytics tools to gain insights, optimize processes, and drive innovation.
Encryption Software, Segmentation by Industry Vertical
- IT
- Telecommunications
- BFSI
- Healthcare and Life Sciences
- Manufacturing
- Retail
- Government
- Energy
- Utilities
Amongst these segments, the BFSI segment in encryption software market is anticipated to hold a significant share over the forecast period. The shift towards digital banking and mobile payments has been a major driver in the BFSI segment. With the increasing adoption of smartphones and the convenience of online transactions, customers are embracing digital banking services. According to a report, the number of mobile banking users worldwide is projected to reach 1.75 billion by the year 2024. The BFSI sector is highly susceptible to cyber threats and fraud, which has led to increased investment in cybersecurity solutions.
Financial institutions are focusing on implementing robust security measures to protect customer data and prevent fraudulent activities. The BFSI industry operates under strict regulatory frameworks to ensure financial stability and consumer protection. Compliance with regulations such as the Basel III framework, Know Your Customer (KYC) requirements, and Anti-Money Laundering (AML) regulations drives the adoption of software solutions for risk management and regulatory compliance.
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Encryption Software, Segmentation by Application
- Disk Encryption
- Database Encryption
- Cloud Encryption
- Folder Encryption
Encryption Software, Segmentation by Deployment Model
- On-Premises
- Cloud
Encryption Software, Segmentation by Enterprise Size
- Large Sized Enterprises
- Small Sized Enterprises
- Medium-Sized Enterprises
Few of the well-known industry leaders in the encryption software market that are profiled by Research Nester are Amazon Web Services, Inc. (AWS), IBM Corporation, Microsoft Corporation, Check Point Software Technologies, F-Secure, Fortinet, Inc., Oracle Corporation, Cisco System, Inc., Palo Alto Networks, Inc., Trend Micro Incorporated, and other key market players.
Recent Development in the Encryption Software Market
- IBM Corporation introduced End-to-End Quantum-Safe Technology, a new software tool for protecting government and private business data with comprehensive security expertise designed as an end-to-end solution. IBM developed this new technology to protect against security risks in quantum systems by incorporating expertise in cryptography, quantum computing and critical infrastructure.
- Amazon Web Services, Inc. launched the Amazon Simple Storage Service (Amazon S3), which encrypts all new objects with security as the top priority. Amazon S3 automatically applies server-side encryption, handles all encryption and decryption, and manages everything transparently.
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