Encryption Software Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The Encryption Software Market is Segmented By Component(Software, Service), By Deployment Model (On-premise, Cloud), By Enterprise Size (Large Enterprises, Small and Medium Enterprises), By Function (Disk Encryption, Communication Encryption, File/Folder Encryption, Cloud Encryption, Database Encryption), By Industry Vertical (IT & Telecommunication, BFSI, Healthcare, Government, Retail, Education) and Geography.

Market Snapshot

Encryption Software Market - Market Summary
Study Period: 2020-2027
Base Year: 2021
Fastest Growing Market: Asia-Pacific
Largest Market: North America
CAGR: 15.57 %

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Market Overview

The Encryption Software Market is expected to register a CAGR of 15.57% over the forecast period (2022-2027). Encryption software's primary aim is to increase data protection from unauthorized users. Additionally, more businesses all around the world are using encryption to meet their rising worries about data security and compliance with privacy laws. The rise in regulation standards on data transfer and its security, growth in the volume of the strength of cyber attacks, and mobile thefts are the major factors driving the market.

  • There is a growing need on the market as end-point data security solutions become more prevalent in the telecommunications and IT sectors. The market share of encryption software is increasing, which is consistent with the rise in cyberattacks against businesses. Implementing encryption software is crucial for defense against the growing threat of cyberattacks and for maintaining the security of private data.
  • The development of the encryption software market share is fueled by a rise in complexity, data breaches, and organizational compliance regulations. Additionally, the market is growing due to the rapid use of Bring Your Own Device (BYOD) policies and rising mobility.
  • In addition, due to rapid digitalization and expanding internet usage, both companies' intellectual property and user-generated content are now vulnerable to theft and infringement. Businesses are obligated to put measures in place to secure the data due to these security threats. A rise in demand for encryption software is projected throughout the projection period as a result of the ability of businesses to protect their sensitive data and intellectual property.
  • However, in some regions, restricted adoption of encrypted devices and a lack of understanding about encryption software are restricting the market share growth of encryption software. On the other hand, the increase in demand for cloud-based encryption software is anticipated to create attractive market expansion prospects.
  • As a result of COVID-19, rapid digital transformation techniques have increased the amount of data kept in the clouds, leading to additional difficulties with performance, availability, and security that call for the usage of encryption software solutions and services.
  • Additionally, as a result of COVID-19, organizations are focused more on centrally managing various cloud resources. Data security is therefore taking on more significance. The demand for encryption software for security assessments is likely to increase even more globally for threat intelligence during the pandemic due to the rising use of BYOD and the presence of regulatory compliances, as well as the fact that the majority of businesses continue to use hybrid work arrangements and work from home policies.

Scope of the Report

Organizations employ encryption software as a tool to safeguard data transfers from one remote location to another. Encryption software's main goal is to increase data protection from unauthorized users. Additionally, more businesses all around the world are using encryption to meet their rising worries about data security and compliance with privacy laws.

The Encryption Software Market is Segmented By Component(Software, Service), By Deployment Model (On-premise, Cloud), By Enterprise Size (Large Enterprises, Small and Medium Enterprises), By Function (Disk Encryption, Communication Encryption, File/Folder Encryption, Cloud Encryption, Database Encryption), By Industry Vertical (IT & Telecommunication, BFSI, Healthcare, Government, Retail, Education) and Geography.

By Component
Software
Service
By Deployment Model
On-premise
Cloud
By Enterprise Size
Large Enterprises
Small & Medium Enterprises
By Function
Disk Encryption
Communication Encryption
File/Folder Encryption
Cloud Encryption
Database Encryption
By Industry Vertical
IT & Telecommunication
BFSI
Healthcare
Government
Retail
Education
Others
Geography
North America
Europe
Asia-Pacific
Middle East & Africa
Rest of the World

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Key Market Trends

IT & Telecommunication to Hold a Significant Share

  • The large quantity of personal data stored on mobile devices, satellites, and the Internet makes the telecommunications sector a major target for hackers. IT deals with using computers and networking equipment to create, process, store, and safeguard many types of electronic data. Regulations and security concerns it has generated have an impact on how the businesses in the vertical operate. As a result, in order to deliver services to their clients without interruption, communication service providers have adopted encryption technology.
  • Online financial transactions have greatly risen in this sector and are now very profitable targets for hackers. To offer risk-free services to their clients, the businesses in this area are implementing encryption solutions.
  • Additionally, they are employing cloud and mobile technology to provide encrypted services to their clients. Users may now safely save their sensitive information on their mobile devices and access it over the cloud thanks to encryption software. In addition to aiding in compliance with rules like AES, PCI DSS, and GDPR, encryption technologies enable telecommunications firms to improve their services and give customers safe information.
  • Further, several telecommunication companies are adopting encryption technology to deliver high secure data. For instance, in January 2022, in order to provide a quantum-safe data centre connection, Nokia teams up with IP Telecom. In order to provide highly secure fiber optic data centre interconnect (DCI) cloud connection among Portuguese metro regions, IP Telecom has expanded its fiber-optic network. Nokia was chosen to deliver a network solution that consists of several 100Gbps and 200Gbps wavelengths, is encrypted, and is resistant to attacks from quantum computers.
  • IdTheftCenter reports that data breaches have increased overall by 68% since 2020, to 1,862. Compared to the previous all-time high, the new record number of data compromises is up 23% (1,506). In 2021, there were 184 data breaches with 22,697,765 victims from the professional services industry, which includes IT businesses.
Encryption Software Market - Key Market Trends1

Asia-Pacific to Witness CAGR Growth in the Forecast Period

  • End-to-end encryption has been advocated by the Indian government as a way for internet intermediaries to actively monitor online content and identify the sources of private conversations. To provide effective data security in the cloud, the majority of manufacturers offer application-based software for cloud encryption. The rapid rise is a result of the country's tightening laws and developing innovations in financial markets' new technology.
  • For example, in February 2021, the Reserve Bank of India (RBI) published its Master Direction on Digital Payment Security Measures, requiring multifactor authentication, encryption, digital certificates, and other controls to safeguard digital payment applications and procedures.
  • Asian governments, including those in China, Singapore, and Japan, are spending a sizable portion of their federal budgets to build up their national cybersecurity frameworks. The market is expanding as a result of these government initiatives, financial backing, and R&D that have contributed to the development of encryption services and products.
  • Singapore is attempting to increase its capacity for quantum computing through new initiatives to create relevant skill sets and quantum gadgets. It emphasizes the necessity of doing this to maintain the reliability and resistance of encryption technology to brute force assaults. For instance, in May 2022, the Singapore government invested USD 16.77 million to support three national platforms for up to 3.5 years.
  • In the Asia Pacific, the lack of qualified cybersecurity specialists creates a need for consulting services, which eventually propels the market for encryption software to develop at a considerable CAGR over the forecast period. Several industry participants provide consultancy services to properly implement encryption software in the area.
Encryption Software Market - Key Market Trend2

Competitive Landscape

The encryption software market is moderately fragmented and has significant players. Few of the key companies currently hold a significant portion of the market such as IBM, Microsoft, Broadcom Inc., Sophos Ltd., Thales, etc. The encryption software market firms are growing their consumer bases internationally. These companies are advancing encryption technologies in software to raise their market share and profitability.

  • June 2022 - Atos and IBM announced an expansion of their partnership around IBM Cloud for Financial Services to help financial services companies reach optimum data and systems security with EU trusted third-party cybersecurity monitoring supplied by Atos. As a result, businesses, notable operators of vital importance (OIV), and operators of essential services (OES) will be allowed to advance in their use of cloud computing. With these new tools, they will be able to strengthen data and system security and ensure that they are being monitored in accordance with French national military programming legislation and the EU Network and Information Security Directive (NIS).
  • May 2022 - Broadcom will combine the USD 1.6 billion Symantec and USD 1 billion VMware security practices with the agreement to buy VMware for USD 61 billion. The giant semiconductor company from San Jose, California, claims it intends to promote its current security products under the VMware name and add them to the VMware portfolio. Broadcom's Symantec division focuses on an endpoint, network, information, identity, and email security, whereas VMware's security division is concerned with endpoint, workload, and container security.

Recent Development

  • March 2022 - Unified Key Orchestrator, a multi-cloud key management solution made available as a managed service by IBM Cloud Hyper Protect Crypto Services, was officially launched. Unified Key Orchestrator, based on the "Keep Your Own Key" concept, assists businesses in managing their data encryption keys across numerous key stores and cloud environments, including keys handled locally on IBM Cloud, AWS, and Microsoft Azure.\
  • February 2022 - Sophos, a cybersecurity player, announced plans for new data centers in Mumbai, India, and Sao Paulo, Brazil, in March and May, respectively. The purpose of the new data centers is to help businesses in these regions comply with stringent data sovereignty rules and regulations, which are becoming more and more important for firms operating in the banking, government, and other highly regulated market sectors. Sophos Encryption services will be having access to the new data centers. It is intended that further Sophos portfolio products will gradually become available.

Table of Contents

  1. 1. INTRODUCTION

    1. 1.1 Study Deliverables

    2. 1.2 Study Assumptions

    3. 1.3 Scope of the Study

  2. 2. RESEARCH METHODOLOGY

  3. 3. EXECUTIVE SUMMARY

  4. 4. MARKET INSIGHTS

    1. 4.1 Market Overview

    2. 4.2 Industry Attractiveness - Porter's Five Forces Analysis

      1. 4.2.1 Bargaining Power of Suppliers

      2. 4.2.2 Bargaining Power of Buyers/Consumers

      3. 4.2.3 Threat of New Entrants

      4. 4.2.4 Threat of Substitute Products

      5. 4.2.5 Intensity of Competitive Rivalry

    3. 4.3 Assessment of Impact of COVID-19 on the Market

  5. 5. MARKET DYNAMICS

    1. 5.1 Market Drivers

      1. 5.1.1 Regulatory Standards Related to Data Transfer and its Security

      2. 5.1.2 Growing Volume of Strength of Cyber Attacks and Mobile Theft

    2. 5.2 Market Restraints

      1. 5.2.1 Expensive Encryption Software Deployment and Maintenance costs

      2. 5.2.2 Utilization of Open-Source and Pirated Encryption Products

  6. 6. MARKET SEGMENTATION

    1. 6.1 By Component

      1. 6.1.1 Software

      2. 6.1.2 Service

    2. 6.2 By Deployment Model

      1. 6.2.1 On-premise

      2. 6.2.2 Cloud

    3. 6.3 By Enterprise Size

      1. 6.3.1 Large Enterprises

      2. 6.3.2 Small & Medium Enterprises

    4. 6.4 By Function

      1. 6.4.1 Disk Encryption

      2. 6.4.2 Communication Encryption

      3. 6.4.3 File/Folder Encryption

      4. 6.4.4 Cloud Encryption

      5. 6.4.5 Database Encryption

    5. 6.5 By Industry Vertical

      1. 6.5.1 IT & Telecommunication

      2. 6.5.2 BFSI

      3. 6.5.3 Healthcare

      4. 6.5.4 Government

      5. 6.5.5 Retail

      6. 6.5.6 Education

      7. 6.5.7 Others

    6. 6.6 Geography

      1. 6.6.1 North America

      2. 6.6.2 Europe

      3. 6.6.3 Asia-Pacific

      4. 6.6.4 Middle East & Africa

      5. 6.6.5 Rest of the World

  7. 7. COMPETITIVE LANDSCAPE

    1. 7.1 Company Profiles

      1. 7.1.1 IBM

      2. 7.1.2 Microsoft

      3. 7.1.3 Broadcom Inc.

      4. 7.1.4 Sophos Ltd.

      5. 7.1.5 Thales

      6. 7.1.6 McAfee, LLC

      7. 7.1.7 Trend Micro Incorporated

      8. 7.1.8 Dell Inc.

      9. 7.1.9 Check Point Software Technologies Ltd.

      10. 7.1.10 Micro Focus International plc

    2. *List Not Exhaustive
  8. 8. INVESTMENT ANALYSIS

  9. 9. FUTURE OUTLOOK OF THE MARKET

**Subject to Availability

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Frequently Asked Questions

The Encryption Software Market market is studied from 2020 - 2027.

The Encryption Software Market is growing at a CAGR of 15.57% over the next 5 years.

Asia-Pacific is growing at the highest CAGR over 2021- 2026.

North America holds highest share in 2021.

IBM, Microsoft, Broadcom Inc., Sophos Ltd., Thales are the major companies operating in Encryption Software Market.

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