Encryption Software Market Size By Component (Software [Endpoint Encryption, Email Encryption, Cloud Encryption], Service [Training & Consulting, Integration & Maintenance, Managed Service]), By Deployment Model (On-Premise, Cloud), By Application (IT & Telecom, BFSI, Healthcare, Retail, Government & Public Sector, Manufacturing), Industry Analysis Report, Regional Outlook, Growth Potential, Competitive Market Share & Forecast, 2020 – 2026

Published Date: Jan 2020  |  Report ID: GMI4484  |  Authors: Preeti Wadhwani, Sachin Kasnale

Report Format: PDF   |   Pages: 260   |   Base Year: 2019




Summary Table of Contents Industry Coverage Methodology

Industry Trends

Encryption Software Market size exceeded USD 6 billion in 2019 and is estimated to grow at over 15% CAGR between 2020 and 2026 as enterprises are looking for increasing their data security by implementing encryption technologies over cloud platforms and mobile devices.
 

Encryption software can be implemented on active data flowing over the internet or private networks and inactive data stored on physical devices, complementing the existing cybersecurity protocols adopted by organizations. Encryption of enterprise data is enabling businesses to reduce dependence on traditional cybersecurity methods as encrypted data is resilient to hacking in cases of data theft or intrusion into physical devices.
 

Encryption Software Market

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Modern encryption methods, such as 256-bit Advanced Encryption Standard (AES) and homomorphic encryption, can protect data from being decrypted even while data is at rest or in transit. Encryption software providers are strongly focusing on the delivery of high quality, cost-effective solutions to remain competitive in a dynamically changing market.
 

For instance, in September 2019, Proofpoint, Inc., a leading cybersecurity company, partnered with CrowdStrike, a cloud end protection provider to integrate Proofpoint’s email encryption algorithms in CrowdStrike’s platform for enhanced data security and threat intelligence.
 

The encryption software industry growth is supported by increasing uptake of data encryption solutions for meeting regulatory compliance. Encryption of data has become a legal mandate for business operations in several nations for ensuring adequate privacy of customer data. Regulations, such as the Gramm-Leach-Bliley Act (U.S.), General Data Protection Regulation (Europe), and Personal Information Protection and Electronic Documents Act (Canada), have exerted additional pressure on enterprises to encrypt data on non-public customer information.
 

Furthermore, data encryption shields enterprises from legal consequences of data breach notification regulations. Several nations across the globe have implemented data breach notification acts, which require enterprises to notify every single party affected by data theft or breach. These regulations provide exceptions for data, which has been strongly encrypted through certified methods, vastly reducing the brand damage of an enterprise after a major cyberattack.
 

Another factor contributing to the encryption software market share is the rising concern over securing enterprise IP assets. In the 2019 report published by CNBC Global CFO Council, a leading representative body of global enterprises, more than 20% of the enterprises reported on having their IP assets stolen or breached by cyberattacks. This has contributed to the rising popularity of encryption software among organizations for safeguarding enterprise data.
 

Encryption software vendors are developing new solutions to address the protection of IP rights, proliferating the market revenue. For instance, in July 2018, Virtru, a global provider of encryption solutions, launched Virtru Data Protection, an encryption solution for securely sharing intellectual property documents over Google G-Suite. The launch helped the company address the growing demand for data-centric encryption on Gmail and Google Drive.
 

However, complexities in encryption key management, easily available pirated & open-source encryption software, and stiff regulations on the import and sales of encryption software may hinder the market demand from 2020 to 2026.
 

Encryption Software Market Report Coverage
Report Coverage Details
Base Year: 2019 Market Size in 2019: USD 6 Billion (2019)
Historical Data for: 2015 to 2018 Forecast Period: 2020 to 2026
Forecast Period 2020 to 2026 CAGR: 15% 2026 Value Projection: USD 20 Billion (2026)
Pages: 260 Tables, Charts & Figures: 295
Geographies covered (23): U.S., Canada, UK, Germany, Italy, Spain, France, Netherlands, China, India, Japan, South Korea, Australia & New Zealand, Southeast Asia, Brazil, Mexico, Argentina, Colombia, South Africa, Saudi Arabia, Israel, UAE, Oman
Segments covered: Component, Deployment Model, Application and Region
Companies covered (18): AO Kaspersky Lab, Bitdefender, Check Point Software Technologies Ltd., Ciphercloud.com, Cisco Systems, Inc., Dell Technologies Inc., ESET, spol s.r.o., IBM Corporation, F-secure, McAfee, LLC (Intel), MicroFocus, Microsoft Corporation, Panda Security, Proofpoint, Sophos Ltd, Symantec Corporation (Broadcom, Inc.), Thales eSecurity, and Trend Micro, Inc.
Growth Drivers:
  • Stringent regulations on cybersecurity and data privacy compliances
  • Rising concerns over securing enterprise Intellectual Property (IP) assets
  • Increasing proliferation of cloud and virtualization technologies
  • Growing trend of Bring Your Own Devices (BYOD) among enterprises
Pitfalls & Challenges:
  • Complexities in encryption key management
  • Easy availability of pirated and free-to-use encryption software
  • Regulatory restrictions on cryptography and encryption

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Growing uptake of encryption software for enhanced data security

The software segment accounted for majority of the market share of above 80% in 2019 and is expected to maintain its dominance over the forecast timespan. This is attributed to rising adoption of encryption software for securing enterprise IP and mitigating financial risks associated with loss or theft of confidential data. In addition, encryption software emerged as a viable solution for ensuring compliance with data privacy regulations.
 

According to the 2019 report published by Thales e-Security, a leading cybersecurity firm, the adoption of encryption software witnessed a 7% Y-o-Y growth in FY2018 with nearly 41% of all global enterprises using standalone encryption products to secure their data.
 

The increasing importance of encryption solutions for protecting BYOD devices and reducing cyberattacks caused by employee negligence will further proliferate the software segment, accentuating the growth of the encryption software market. Enterprises are transitioning from traditional cybersecurity methods toward advanced encryption algorithms to ensure that the data present on employee devices is encrypted for the entire duration of the data lifecycle.
 

For instance, in February 2017, Google deployed public-key cryptography solutions on more than 85,000 of its employee devices. By July 2018, cyberattacks and phishing related incidents on its employee devices had reduced to zero.
 

Endpoint encryption driving the growth of on-premise solutions

Encryption Software Market By Deployment Model

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The on-premise segment held majority of the encryption software market revenue share, accounting for over 70% in 2019 impelled by extensive uptake of endpoint encryption solutions for securing on-premise files, drives, and databases. On-premise encryption software facilitates data partition where different encryption keys can be deployed to encrypt each data partition. The growing incidents of BYOD device thefts and physical intrusion on enterprise IT assets have increased the uptake of on-premise encryption software, ensuring data-at-rest is safeguarded against malicious attacks.
 

Furthermore, network encryption is better adapted to on-premise encryption technologies as organizations gain better control over the encryption of data across their networks. Another factor contributing to the growing adoption of on-premise encryption tools is better key management. Most organizations are still hesitant to deploy cloud-based encryption key management solutions due to the fear of losing encryption keys, promoting the use of on-premise encryption deployment models.
 

Encryption technologies significantly impacting the APAC BFSI sector

APAC Encryption Software Market By Application

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In APAC encryption software market, the BFSI segment will grow at an impressive CAGR of over 24% over the projected timeline due to the extensive adoption of encryption solutions for protecting Non-Personal Information (NPI), including credit scores, loan history, and income details. Stringent regulations imposed by several APAC nations for protecting financial data, such as Japan’s Act on the Protection of Personal Information and the Personal Data Privacy Ordinance (Hong Kong), have pressurized BFSI enterprises to encrypt their data for mitigating the risk of disclosure or manipulation of business-critical information.
 

According to the 2018 report by Fortinet, a global cybersecurity provider, nearly 27% of new online banking customers will be added in the APAC region by 2022, posing a high risk to the data security of endpoint banking applications.
 

As online banking is the leading business segment for majority of fintech organizations, the deployment of encryption technologies is being undertaken at a rapid pace to ensure regulatory compliance and maintaining customer trust. For instance, in July 2019, HDFC Bank, a leading private bank in India, upgraded the data encryption protocols to incorporate TLS 1.2 standards and RSA 2048 encryption algorithm for securing its payments interface. This is helping the bank in addressing the data security concerns of its growing customer base and establishing a strong market presence in the mobile payments segment.
 

Strong government initiatives fueling the Germany encryption software market growth

Germany Encryption Software Market By Software

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Germany held over 25% industry share in 2019 and is set to dominate up till 2026. Early adoption of data encryption technologies and the positive approach of government for pushing Germany as a global leader in cybersecurity and encryption are propelling the uptake of encryption software across the country.
 

In November 2016, the Interior Ministry of Germany passed the Charta for Strengthening Confidential Communication, a charter that makes encryption of all confidential data mandatory by law. The charter also outlines Encryption Site Number One, which is the German government’s strategic plan to achieve high-end encryption in all forms of digital communication across the nation.
 

Furthermore, the advent of connected cars and advanced telematics solutions has promoted the uptake of encryption software for securing Vehicle-to-Anything (V2X) communication data, accentuating the market growth in the country. In August 2019, Volkswagen partnered with NXP Semiconductors to develop encrypted solutions for its telematics data obtained from connected cars. The new solution is helping the company provide secured vehicle communications and infotainment systems to its customers, strengthening its market presence.
 

Focus on R&D and product portfolio expansion by industry players

Prominent players operating in the encryption software market are focusing on improving their existing encryption solutions and investing heftily in the research & development of new encryption algorithms. For example, in August 2019, IBM Research Switzerland introduced IBM TS1160, a new encryption algorithm claimed to be secure even against highly powerful quantum computers. The encryption solution can be easily integrated into the firmware of hard drives and can protect data-at-rest against cyberattacks.
 

Startups operating in the industry such as Duality and PreVeil, are focusing on developing end-to-end encryption for file sharing and e-mails, offering stiff competition to large market players.
 

Some of the players operating in the encryption industry include AO Kaspersky Lab, Bitdefender, Check Point Software Technologies Ltd., Ciphercloud.com, Cisco Systems, Inc., Dell Technologies Inc., ESET, spol  s.r.o., IBM Corporation, F-secure, McAfee, LLC (Intel), MicroFocus, Microsoft Corporation, Panda Security, Proofpoint, Sophos Ltd, Symantec Corporation (Broadcom, Inc.), Thales eSecurity, and Trend Micro, Inc.
 

The encryption software market research report includes in-depth coverage of the industry with estimates & forecast in terms of revenue in USD from 2015 to 2026 for the following segments:
 

By Component

  • Software
    • Endpoint Encryption
    • Email Encryption
    • Cloud Encryption
  • Service
    • Training & Consulting
    • Integration & Maintenance
    • Managed Service

By Deployment Model

  • On-premise
  • Cloud

By Application

  • IT & Telecom
  • BFSI
  • Healthcare
  • Retail
  • Government & Public Sector
  • Manufacturing

The above information has been provided for the following regions and countries:

  • North America
    • U.S.
    • Canada
  • Europe
    • UK
    • Germany
    • France
    • Italy
    • Spain
    • Netherlands
  • Asia Pacific
    • China
    • India
    • Japan
    • South Korea
    • ANZ
    • Southeast Asia
  • Latin America
    • Brazil
    • Mexico
    • Argentina
    • Colombia
  • MEA
    • Saudi Arabia
    • UAE
    • South Africa
    • Israel
    • Oman
       

Frequently Asked Questions (FAQ) :

The industry growth is supported by increasing uptake of data encryption solutions for meeting regulatory compliance.
The software segment accounted for majority of the market share of above 80% in 2019 led by rising adoption of encryption software for securing enterprise IP and mitigating financial risks associated with loss or theft of confidential data.
In the Asia Pacific region, the BFSI sector will grow at an impressive CAGR of over 24% during the projected timeline due to an extensive adoption of encryption solutions for protecting Non-Personal Information (NPI), including credit scores, loan history, and income details.
Germany held majority of the industry share with over 25% in 2019 and is set to continue its dominance up till 2026.

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