Cloud Encryption Market Size and Share
Market Overview
| Study Period | 2019 - 2030 |
|---|---|
| Market Size (2025) | USD 4.90 Billion |
| Market Size (2030) | USD 14.59 Billion |
| Growth Rate (2025 - 2030) | 24.38% CAGR |
| Fastest Growing Market | Asia Pacific |
| Largest Market | North America |
| Market Concentration | Medium |
Major Players
*Disclaimer: Major Players sorted in no particular order Image © Mordor Intelligence. Reuse requires attribution under CC BY 4.0. |
|
Cloud Encryption Market Analysis by Mordor Intelligence
The cloud encryption market stands at USD 4.90 billion in 2025 and is on course to reach USD 14.59 billion by 2030, expanding at a 24.38% CAGR. Accelerated uptake of multi-cloud strategies, rapid digital transformation among small and mid-sized enterprises, and intensifying regulatory oversight are the strongest growth catalysts. Software-defined encryption remains the architectural cornerstone, yet demand for managed services is rising quickly as organizations grapple with quantum-safe deployment, confidential-computing integrations, and multi-cloud key orchestration. Regional dynamics are equally pronounced: North America keeps the largest revenue lead, while Asia-Pacific records the fastest expansion on the back of SME cloud migrations and evolving data-sovereignty regimes[1]Cloud Security Alliance, “Global Data Sovereignty: A Comparative Overview,” cloudsecurityalliance.org. Competitive positioning hinges on end-to-end key control, post-quantum readiness, and seamless policy enforcement across heterogeneous infrastructure.
Key Report Takeaways
- By component, Software led with 64% of cloud encryption market share in 2024; Services is projected to grow at a 29.10% CAGR to 2030.
- By service model, IaaS held 46% revenue share in 2024; SaaS solutions are forecast to rise at a 31.50% CAGR through 2030.
- By cloud type, Public Cloud accounted for 59% of the cloud encryption market size in 2024, while Hybrid Cloud is advancing at a 33.20% CAGR to 2030.
- By end-user industry, BFSI held 28% share of the cloud encryption market size in 2024; Healthcare and Life Sciences is expanding at a 28.40% CAGR through 2030.
- By enterprise size, Large Enterprises controlled 71% of the cloud encryption market in 2024, whereas the SME segment is growing at a 27.30% CAGR to 2030.
- By Geography, North America controlled 34% of the cloud encryption market share in 2024, whereas the Asia-Pacific segment is growing at a 24% CAGR to 2030.
Global Cloud Encryption Market Trends and Insights
Drivers Impact Analysis
| Driver | (~) % Impact on CAGR Forecast | Geographic Relevance | Impact Timeline |
|---|---|---|---|
| Explosion of multi-cloud and edge workloads | +7.2% | Global (notably North America and Europe) | Medium term (2–4 years) |
| Tightening global data-sovereignty laws | +5.8% | Europe, Asia-Pacific, North America | Medium term (2–4 years) |
| SaaS proliferation across regulated verticals | +4.5% | Global (early adoption in North America) | Short term (≤ 2 years) |
| Quantum-safe encryption urgency | +2.9% | North America, Europe | Long term (≥ 4 years) |
| Confidential-computing integrations | +2.1% | North America, Europe | Medium term (2–4 years) |
| Gen-AI assisted key-management automation | +1.8% | Global (early adoption in North America) | Medium term (2–4 years) |
| Source: Mordor Intelligence | |||
Explosion of Multi-Cloud and Edge Workloads
Enterprises now spread applications across several public clouds and edge nodes, with 86% pursuing multi-cloud strategies in 2025. Dispersed workloads shatter the traditional perimeter, forcing teams to enforce uniform encryption policies across dissimilar control planes. Edge-first architectures intensify complexity because encryption must execute with minimal latency at the data-creation point. Deep observability and AI-driven anomaly detection are therefore being embedded into encryption workflows to sustain visibility across clouds while shielding sensitive workloads from lateral movement.
Tightening Global Data-Sovereignty Laws
Regulations such as GDPR, China’s PIPL, and Brazil’s LGPD stipulate that data remain subject to local jurisdiction, compelling multinational firms to rethink cloud placement and key custody. Centralized key management coupled with location-aware encryption has become an indispensable compliance tool, especially where Digital Operational Resilience Act (DORA) requirements mandate demonstrable control over encryption keys held in third-party clouds. Organizations increasingly weigh repatriating high-risk workloads to sovereign facilities while maintaining selective public-cloud utilization for scalability.
SaaS Proliferation Across Regulated Verticals
Healthcare, finance, and public-sector entities intensify their SaaS adoption to streamline core processes, yet they face strict mandates for record confidentiality, transaction integrity, and auditability. Encryption must extend from the application layer through transport and storage without degrading the end-user experience. Providers that secure SOC 2, ISO/IEC 27001, and CSA STAR certifications are gaining share, as customers demand verifiable cryptographic controls before onboarding mission-critical workloads.
Quantum-Safe Encryption Urgency
Advances in quantum hardware threaten to obsolete RSA and ECC, spurring collaboration between cloud hyperscalers and standards bodies to finalize lattice- and code-based algorithms. Early adopters are integrating post-quantum suites into test environments, prioritizing migration paths that do not disrupt current TLS or VPN channels. ETSI’s 2025 Quantum Safe Cryptography Conference gathered AWS, Telefonica and the ECB to accelerate lattice-based algorithm standardization[2]ETSI, “ETSI/IQC Quantum Safe Cryptography Conference 2025,” etsi.org. The shift is critical for long-term confidentiality of data archived today but required to remain protected for decades—particularly in financial services, defense, and healthcare.
Restraint Impact Analysis
| Restraint | (~) % Impact on CAGR Forecast | Geographic Relevance | Impact Timeline |
|---|---|---|---|
| High performance overhead in low-latency apps | −3.2% | Global (notably North America and Asia-Pacific) | Short term (≤ 2 years) |
| Key escrow and lifecycle complexity | −2.8% | Global | Medium term (2–4 years) |
| Fragmented cloud-native security standards | −1.9% | Global (higher impact where regulations are strict) | Medium term (2–4 years) |
| Geo-sovereignty barriers to key export | −1.5% | Europe, Asia-Pacific | Long term (≥ 4 years) |
| Source: Mordor Intelligence | |||
High Performance Overhead in Low-Latency Apps
Real-time trading, industrial control, and immersive media demand millisecond responsiveness; yet encrypt-decrypt cycles add compute drag and jitter. Hardware offload cards and streamlined ciphers are easing the burden, but many enterprises still selectively bypass encryption in latency hotspots, exposing isolated data flows to risk. Until next-generation accelerators become ubiquitous, the tension between throughput and confidentiality will persist.
Key Escrow and Lifecycle Complexity
Generating, distributing, rotating, and revoking keys across multiple clouds strains operational resources. Fewer than 10% of enterprises encrypt 80% or more of cloud-resident data, underscoring sizable protection gaps. Unified key-management-as-a-service offerings are gaining traction, but heterogenous policy frameworks and provider-specific APIs still complicate true crypto agility, especially when incorporating post-quantum algorithms.
Segment Analysis
By Component: Software Dominates While Services Accelerate
Software controlled 64% of 2024 revenue, underscoring its foundational role in deploying at-rest and in-transit ciphers across storage, VM, and container layers. Mature toolsets bundle granular policy engines, role-based access, and AES-256 support, enabling consistent enforcement throughout DevSecOps pipelines. Vendors continuously update libraries to accommodate emerging algorithms and to embed hardware offload for performance-sensitive paths.
Services expand at a 29.10% CAGR as organizations confront cloud-native sprawl. Third-party experts design, run, and audit encryption estates spanning confidential-compute clusters, hybrid gateways, and post-quantum testbeds. Engagement scope often covers crypto-agility road mapping and zero-trust alignment, filling workforce gaps and accelerating compliance certification.
Note: Segment shares of all individual segments available upon report purchase
By Service Model: IaaS Foundations Support SaaS Growth
Infrastructure-layer encryption underpins every higher-order service, and IaaS retained 46% share in 2024. Customers depend on provider-supplied boot-volume ciphers, block-storage key services, and encrypted object stores to secure core compute and network constructs. Integration with organization-owned hardware security modules lets regulated workloads satisfy stringent audit demands.
SaaS encryption outpaces at 31.50% CAGR as application portfolios migrate to cloud subscription models. Each workload—customer relationship management, electronic health records, or treasury management—requires seamless data protection without altering user workflows. Providers embedding field-level encryption, bring-your-own-key frameworks, and strong certificate pinning win new customers in finance and healthcare.
By Cloud Type: Hybrid Deployments Outpace Public Cloud
Although public platforms still generated 59% of 2024 revenue, the hybrid approach advances at a 33.20% CAGR. Enterprises keep sensitive datasets in private or sovereign locations while bursting less sensitive analytics to hyperscale clusters. Unified policy planes maintain key custody across both realms, ensuring compliance with jurisdictional statutes while tapping public scalability for ephemeral workloads.
Hybrid success rides on consistent encryption orchestration that spans physical data centers and multiple public providers. Solutions exposing centralized key vault APIs, automation hooks, and hardware-rooted trust effectively neutralize inter-platform discrepancies, paving the way for smooth workload mobility and resilience.
By End-User Industry: BFSI Leads While Healthcare Accelerates
Financial services retained 28% revenue share in 2024, reinforcing encryption’s indispensability for transaction integrity, regulatory mandates, and zero-trust adoption. Sector standards stress continuous identity verification and dual-control key ceremonies, making comprehensive encryption non-negotiable.
Healthcare and Life Sciences grows fastest at a 28.40% CAGR as electronic health-record repositories swell and Internet-of-Medical-Things devices proliferate. Attack surfaces enlarge, breach costs rise, and regulators tighten audit scope. Clinicians therefore roll out full-stack encryption—from sensor to cloud analytic cluster—coupled with strict role segregation and immutable audit logging.
Note: Segment shares of all individual segments available upon report purchase
By Enterprise Size: Large Enterprises Dominate While SMEs Catch Up
Large Enterprises commanded 71% of 2024 spending due to broad IT estates, high data classification complexity, and bigger compliance penalties. These firms deploy layered defenses including data-in-use protections through confidential computing, post-quantum pilots, and machine-learning monitoring of encrypted traffic.
SMEs close the gap at a 27.30% CAGR. Affordable pay-as-you-go key-management services and automated policy templates lower technical barriers, letting smaller firms safeguard intellectual property and customer data without dedicated security staff. Adoption is especially strong across Asia-Pacific’s SME ecosystem, where cloud services underpin digital-commerce expansion.
Geography Analysis
North America held 34% of the cloud encryption market in 2024, propelled by early cloud adoption, strict sectoral mandates, and hyperscaler innovation. Financial institutions, healthcare providers, and federal agencies advance zero-trust blueprints that place encryption at every trust boundary. Collaboration between large cloud providers and NIST on post-quantum cryptography accelerates standards convergence, further entrenching the region’s leadership.
Asia-Pacific delivers the fastest trajectory at 24% CAGR. SMEs constitute over 97% of businesses and are embracing cloud platforms for operational agility. National data-residency laws in China, India, and Indonesia drive demand for sovereign-ready key-management deployments. Hyperscalers respond with region-specific availability zones and partner-run key vaults, enabling customers to comply without sacrificing scalability.
Europe shoulders stringent compliance impetus under GDPR and forthcoming Digital Operational Resilience Act rules. Organizations emphasize sovereign key ownership and selective workload placement inside EU-based data centers. Sovereign cloud initiatives with in-region hardware security modules gain traction, allowing enterprises to meet legal demands while leveraging elastic compute economics.
Competitive Landscape
The cloud encryption market shows moderate concentration, with the top five providers accounting for just over 60% of global revenue. Amazon Web Services, Microsoft Azure and Google Cloud anchor this leadership by embedding default data-at-rest and data-in-transit ciphers, central key vaults and hardware-rooted attestation into their platforms. Each hyperscaler keeps expanding encryption coverage—AWS now offers Bring-Your-Own-Key for 100+ services, Azure extends confidential-compute nodes across every region and Google Cloud equips its External Key Manager with post-quantum options—so that customers can satisfy industry mandates without bolt-on tools.
Scale, however, is not the only differentiator. Thales, Fortanix and Virtru win share by focusing on data-centric policy engines, tokenization and sovereign key custody that work the same way across multicloud estates. Thales recently added Hardware Security Module-as-a-Service nodes inside new EU sovereign zones, while Fortanix integrated Intel Trust Domain Extensions to seal keys inside processor enclaves for confidential analytics. Virtru, meanwhile, packaged client-side encryption software development kits that let SaaS builders insert field-level protection without rewriting application logic.
Innovation from emerging specialists further intensifies rivalry. Arqit Quantum combines lattice-based algorithms with confidential computing so that even cloud operators cannot access customer secrets, and the company partnered with Dell Technologies in 2025 to co-sell the service to regulated banks[3]Arqit Quantum Inc., “Arqit Delivers Quantum-Safe Protection Enhanced by Confidential Computing,” arqit.uk. CrowdStrike folded real-time data-loss prevention into its Falcon platform to compete for unified endpoint and cloud encryption budgets. Cloudflare pushed end-to-end post-quantum cryptography into Zero Trust Network Access, giving security teams a low-friction on-ramp to quantum-safe connectivity ahead of formal NIST ratification.
Cloud Encryption Industry Leaders
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IBM Corporation
-
Broadcom Inc. (Symantec Corporation)
-
Amazon Web Services
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Microsoft Corporation
-
Google Inc.
- *Disclaimer: Major Players sorted in no particular order
Recent Industry Developments
- April 2025: CrowdStrike added Falcon Data Protection features to secure data across endpoints, cloud, GenAI, and SaaS applications.
- March 2025: Cohesity released NetBackup 11.0 with quantum-proof encryption and behavioral analytics for high-risk user activities.
- March 2025: Cloudflare expanded end-to-end post-quantum cryptography to its Zero Trust Network Access service, delivering immediate quantum-safe connectivity.
- November 2024: Echoworx launched a Google Workspace add-on that embeds email encryption natively for more than 6 million business users.
Research Methodology Framework and Report Scope
Market Definitions and Key Coverage
We define the cloud encryption market as revenues generated by software and managed-service offerings that convert data into cyphertext before, during, or after storage on public, private, or hybrid cloud infrastructure. The study period used by Mordor Intelligence spans 2019-2030, with a 2025 baseline value of USD 4.90 billion.
Scope exclusion: On-premise-only encryption solutions that never interact with a cloud environment are excluded.
Segmentation Overview
- By Component
- Software
- Services
- By Service Model
- Infrastructure-as-a-Service (IaaS)
- Platform-as-a-Service (PaaS)
- Software-as-a-Service (SaaS)
- By Cloud Type
- Public Cloud
- Private Cloud
- Hybrid Cloud
- By End-User Industry
- BFSI
- Government and Public Sector
- Retail and e-Commerce
- Healthcare and Life Sciences
- Energy and Utilities
- IT and Telecommunications
- Others (Media, Education)
- By Enterprise Size
- Large Enterprises
- Small and Medium Enterprises
- By Geography
- North America
- United States
- Canada
- Mexico
- South America
- Brazil
- Argentina
- Rest of South America
- Europe
- United Kingdom
- Germany
- France
- Italy
- Spain
- Nordics
- Rest of Europe
- Asia-Pacific
- China
- India
- Japan
- South Korea
- ASEAN
- Rest of Asia-Pacific
- Middle East and Africa
- Middle East
- Saudi Arabia
- United Arab Emirates
- Turkey
- Rest of Middle East
- Africa
- South Africa
- Egypt
- Nigeria
- Rest of Africa
- Middle East
- North America
Detailed Research Methodology and Data Validation
Primary Research
We then interviewed CISOs at hyperscalers, regional managed-security providers, and compliance officers across BFSI, healthcare, and public-sector buyers in North America, Europe, and key Asia-Pacific hubs. Their insights helped us validate adoption rates, average selling prices, and near-term regulatory triggers.
Desk Research
Our analysts first screened open datasets such as NIST post-quantum algorithm releases, ENISA threat bulletins, Cloud Security Alliance surveys, and UNCTAD cross-border data-flow statistics. Company 10-Ks, SEC cyber-risk disclosures, and selected press articles supplemented volume indicators. Where revenue splits were unclear, we tapped paid databases, D&B Hoovers for vendor financials and Dow Jones Factiva for deal tracking, to cross-check totals. These sources illustrate rather than exhaust the wider set we consulted.
Market-Sizing & Forecasting
A top-down model starts with worldwide cloud spend, applies an encryption-penetration pool by service model (IaaS, PaaS, SaaS), and is aligned with regional cloud workload metrics. Select bottom-up checks, sample vendor revenues and channel ASP x volume benchmarks, calibrate segment totals. Key variables include multi-cloud adoption share, encryption-key-management attach rate, average price erosion, regulatory event timing, and quantum-safe upgrade intent. Multivariate regression, stress-tested through three macro scenarios, drives the 2026-2030 forecast, while gap fills rely on analog market proxies when direct data are absent.
Data Validation & Update Cycle
Outputs pass three-layer variance checks, senior-analyst reviews, and anomaly flags tied to quarterly earnings or policy changes. Our team refreshes every twelve months, with interim updates after material events, ensuring clients receive an up-to-date view.
Why Mordor's Cloud Encryption Baseline Commands Industrywide Confidence
Published figures often diverge because firms differ on what constitutes "in-scope" revenue, the speed of quantum-safe upgrades, and the cadence of currency conversion.
Mordor's numbers rest on a clearly disclosed scope, annual refreshes, and dual-path modelling that balances market-share reality with macro cloud spend trends.
Benchmark comparison
| Market Size | Anonymized source | Primary gap driver |
|---|---|---|
| USD 4.90 B (2025) | Mordor Intelligence | - |
| USD 5.67 B (2025) | Global Consultancy A | Includes some on-premise gateway encryption revenues |
| USD 5.27 B (2025) | Trade Journal B | Uses aggressive quantum-safe adoption curve and fixed ASP |
| USD 2.40 B (2022) | Industry Analyst C | Older base year and excludes managed-service revenue |
The comparison shows that scope creep, outdated baselines, or single-path assumptions can inflate or deflate totals. By triangulating multiple data lanes and refreshing annually, Mordor Intelligence delivers a balanced, transparent baseline that decision-makers can trace back to verifiable drivers.
Key Questions Answered in the Report
What is the projected CAGR for the cloud encryption market between 2025 and 2030?
The market is forecast to expand at a 24.38% CAGR over the 2025–2030 period.
Which component category currently holds the largest share?
Software holds 64% of revenue due to its critical role in implementing at-rest and in-transit encryption policies.
Why is Asia-Pacific the fastest-growing region?
Rapid SME cloud adoption, expanding digital-economy initiatives, and emerging data-sovereignty regulations fuel a 24% CAGR in Asia-Pacific.
How are organizations preparing for quantum threats?
Enterprises pilot post-quantum cryptography suites and confidential-computing platforms to safeguard data against future quantum decryption risks.
What drives the sharp growth in hybrid cloud encryption?
Enterprises balance compliance and scalability by keeping sensitive records on-premises while bursting other workloads to public clouds, pushing hybrid cloud encryption to a 33.20% CAGR.
Which industry shows the fastest growth in encryption spending?
Healthcare and Life Sciences is advancing at a 28.40% CAGR as digitized patient records and connected medical devices enlarge the threat surface.
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