Encryption Software Market is forecast to reach $14.32 billion by 2025, at a CAGR of 16.20% during 2020-2025. Rise in number and complexity of data breaches and growth in compliance regulations are the key factors that drive the growth of the encryption software market. In addition, increasing adoption of new technologies such as mobility, cloud and virtualization, are expected to accelerate Encryption software market size during forecast period. According to the report given by Information Technology Association of America (ITAA) about 83% of enterprise workloads will be in the cloud by 2020. Usage and adoption of such technologies are likely to increase the demand for Encryption Software Market.
Application – Segment Analysis
Cloud encryption segment to grow at the highest CAGR of 14.50% during the forecast period, owing to the increasing number of organizations which are moving toward the cloud for achieving cost savings, agility and flexibility. Similarly, increasing number of investment in cloud encryption by several companies are increasing the outlook for encryption software. For instance in 2018, Cipher Cloud has raised a new $30 million round of funding from Andreessen Horowitz for its cloud application security technology. Similarly in 2019, Microsoft alone employed 3,500 cybersecurity professionals and invested more than $1 billion in cloud data encryption.
By Vertical – Segment Analysis
The BFSI segment is estimated to have the highest CAGR of 18.5% among other encryption software industry during the forecast period due to dynamic nature of the security industry. Similarly, rising number of cyber-attacks are also resulting the increase need of encryption software in recent time. Banks generally follow traditional techniques such as email and DVDs to transfer data, which pose a high threat of data breach. For Instance according to the report given by The Financial Conduct Authority (FCA) in 2018, number of data breaches reported by UK financial services firms increased to 48% in 2018, from 25% in 2017. On the other hand, online transactions are increasing in rapid pace due to technological developments in many major countries. For instance, in India, online transaction increased to $1.2 billion in 2018-19, registering a growth of 51% over the previous year. As these transactions are primary target for cyber criminals, cryptography is a must needed process to maintain the integrity of transaction
Geography – Segment Analysis
In 2018, North America dominated the Encryption Software Market share for about 35.20%, followed by Europe and APAC. Increased number of data breaches, stringent data privacy compliance regulations and the increase in adoption of technologies such as BYOD and CYOD where Encryption software has potential to encrypt important digital information to keep sensitive data secure and reduce the cyber-attacks, which are major growth factors for the market. According to the report given by Information Technology Association of America in 2018, more than a 36% of North American companies had adopted BYOD programs in some form at the start of this year, with the adoption rate predicted to climb to 50% by early 2018. Adoption of such technologies will drive the usage of Encryption software in this region.
Drivers –Encryption Software Market
SMEs in different industry verticals do not have stringent security measures for safeguarding their data, networks, endpoints, and applications. The demand for cloud-based solutions is increasing rapidly across enterprises as the dominant delivery model need to meet IT security requirement. Cloud deployment provides flexibility, scalability, and cost-effectiveness to streamline business operations. With SMEs shifting their focus to cloud solutions, cloud encryption solution and service providers are expected to witness increasing opportunities for safeguarding the data of SMEs from security breaches and vulnerabilities
The demanding requirement from consumers and regulatory bodies are bringing disruption in the BFSI sector. In recent time, BFSI is focusing on decreasing data breaches and cybersecurity attacks with new technological innovations . For instance in 2018, the European Banking Authority (EBA) made security regulations for financial institutions concerning internet payment services. The obligations of payment service providers (PSPs) such as, PSPs should ensure to use end-to-end encryption when exchanging sensitive data via the internet between the communicating parties in order to safeguard the confidentiality and integrity of the data . Similarly, in 2017 New York State Department of Financial Services (NYDFS) mandated to protect sensitive, nonpublic information by using standard encryption techniques. Therefore such regulation will positively create the demand for Encryption software.
Challenges – Encryption Software Market
Some organizations rely on different encryption systems provided by vendors. Organizations with multiple encryption systems have basic key management software which is incapable of handling keys from multiple encryption systems. The inefficiency of the key management software in managing the keys is one of the major concerns for admin and IT teams. On the other hand if the encryption key becomes corrupted, then critical business information becomes vulnerable and exposed to hackers, who will be able to access sensitive business information without any password or decryption key. On the other hand usage of pirated encryption software which refers to the unauthorized copying of the licensed versions of the software is one of the major drawback of encryption software market. There are many types of software piracy among which the most prevalent types include softlifting, software counterfeiting, Original Equipment Manufacturer (OEM) bundling, hard disk loading, and renting etc. as these pirated software are used my many companies as they are cost effective. Usage of such type of software will negatively hamper the market growth.
Partnership and acquisitions are key strategies adopted by players in the Encryption Software market. In 2018, Encryption Software industry outlook has been moderately concentrated by the top five players accounting for 52.45% of the share. The Encryption Software top 10 companies include Microsoft Corporation, Cisco Systems, Thales e-Security, Symantec, EMC Corporation, Sophos, IBM Corporation, Intel Security, Bloombase, Trend Micro, Thales e-Security and Check Point Software Technologies.
Ø In April 2019- Thales Group, a parent company of Thales e-Security, completed its acquisition of Gemalto, a leader in digital identity and security. The acquisition would create a world-class leader with an unrivalled portfolio of digital identity and security solutions based on technologies, such as biometry, data protection, and, more broadly, cybersecurity.
Ø May 7, 2018 – Syncsort has acquired the bulk of Townsend Security’s products in a bid to bolster its burgeoning suite of security software for IBM
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