Homomorphic Encryption Market Size By Type (Fully, Partially, Somewhat), By Component (Solution [Encrypted Data Analytics, Encrypted AI/ML Data Modelling, Encrypted Data Linkage, Encrypted Database Querying, Encrypted Biometrics and Behavioral Data], Service[ Professional Service, Managed Service]), By Application (Secure Data Computation, Data Privacy, Data Monetization, Regulatory Compliance), By End-Use (BFSI, Healthcare, Government, IT & Telecom, Others), COVID-19 Impact Analysis, Regional Outlook, Growth Potential, Competitive Market Share & Forecast, 2022 – 2030

Industry Statistics

Homomorphic Encryption Market size valued at USD 150 million in 2021 and is expected to grow at around 9% CAGR between 2022 and 2030.
 

Growing cases of cybercrimes is likely to fuel the industry growth. Cybercrimes such as ransomware attacks, online identity theft, hacking, and phishing have increased considerably across several economies globally, resulting in massive financial losses and business interruptions. This upsurge in cybercrimes has raised alarms for organizations regarding information security. With the rising adoption of cloud-based data processing services, homomorphic encryption is emerging as a crucial technology that safeguards businesses from rampant cybersecurity threats. The rapid shift from traditional infrastructure to the web, the deployment of artificial intelligence and other cutting-edge technologies, and growing interconnectivity have led to the growth of cyber-attacks.
 

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Investments in AI & ML technologies to present lucrative growth opportunities

The adoption of artificial intelligence, machine learning, and deep learning improves the efficiency of homomorphic encryption. These technologies can help detect and prevent fraud in real-time and improve the scalability and flexibility of enterprises.
 

Lack of skilled cybersecurity professionals may hamper the industry development

The limited presence of skilled cybersecurity professionals such as fraud analysts may, however, create roadblocks to homomorphic encryption market progress. As per the 8th Annual Cybersecurity Survey of ISACA, 60% of the respondents have unfulfilled cybersecurity positions in India in 2022. Additionally, 62% revealed that it takes them 3 to 6 months to fill a position with qualified candidates. These limitations may hinder the growth of the market size.
 

Somewhat homomorphic encryption to gain widespread demand

Somewhat homomorphic encryption can allow users to perform computational operations such as multiplication and addition for a finite number of times, with a constraint on the complexity level. This capability to cater to varied analytical or mathematical operations will boost homomorphic encryption industry growth from the somewhat homomorphic segment, which is poised to depict a growth rate of over 7% through 2030.
 

Adoption of comprehensive mobile devices to boost the need for encrypted database querying solutions

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The solution segment held nearly 68% of the homomorphic encryption market share in 2021. This can be credited to the extensive usage of standalone encryption software to safeguard information, along with the proliferation of ML and AI technologies. The solution segment is further sub-categorized into encrypted data analytics, encrypted biometrics and behavioral data, encrypted database querying, encrypted data linkage, and encrypted AI/ML data modeling.
 

Among these, the encrypted database querying segment is projected to witness 10.2% gains through 2030 driven by the growing adoption of comprehensive mobile devices and the subsequent rise in the need for cloud-based data processing services. The use of database querying for communication encryption, disk encryption, and other applications has also increased considerably.
 

Rapid data migration to the cloud to propel data privacy segment demand

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The data privacy application registered revenue worth over USD 52 million in 2021 and is set to observe a healthy growth rate up to 2030 owing to increasing adoption of cloud technology. In addition, the rapid data migration to achieve business agility and flexibility will also have a profound impact on the homomorphic encryption market outlook.
 

Implementation of strict data protection regulations in the BFSI sector

The BFSI sector held a market share of more than 31% in 2021. The burgeoning adoption of homomorphic encryption algorithms in the BFSI sector is attributed to the implementation of strict government directives and data protection regulations to ensure financial information safety. For example, regulations including the Gramm-Leach-Bliley Act (GLBA), GDPR, and PCI DSS specifically mandate the adoption of data encryption policies among institutions to secure Personally Identifiable Information.
 

Strong focus on promoting data safety to fuel industry expansion in Europe

Regionally, the Europe homomorphic encryption market is estimated to expand at a CAGR of about 8% through 2030 on account of increasing reliance on technologies to safeguard financial transactions and promote data safety, predominantly in countries such as Germany. In October 2019, the European Commission also announced provisional measures, such as investments in Europol and funding cybersecurity training, to gain in-depth insights into the economic impact of homomorphic encryption techniques.
 

Impact of COVID-19 on the homomorphic encryption industry outlook

The COVID-19 outbreak, which accelerated the global shift toward the digital world, has led to an increase in security breaches worldwide. According to data from FireEye and McAfee Enterprise, 81% of the organizations witnessed more cyber threats during the crisis, with 79% experiencing downtime caused by cyber incidents during a peak season. These factors will bolster the adoption of next-gen data security technologies.
 

Advanced service developments to remain a key strategy for industry participants

Some of the companies operating in the homomorphic encryption market include Cosmian Tech, Desilo Inc., Duality Technologies Inc., Galois, Inc, Google LLC, IBM Corporation, Intel Corporation, Microsoft Corporation, Netskope, Inc, Thales Group, Zama.ai, and others. They are focusing on product range expansions, among other strategies, to gain a competitive edge over rivals in the market. For instance, in July 2022, Duality Technologies launched its advanced open-source fully homomorphic encryption library, designed to enable computations over encrypted data without the need to decrypt any data or share access to secret keys.
 

This homomorphic encryption market research report includes in-depth coverage of the industry with estimates & forecast in terms of revenue in “USD” from 2018 to 2030, for the following segments:

Market, By Type

• Fully
• Somewhat
• Partially

Market, By Component

• Solution
  • Encrypted Data Analytics
  • Encrypted AI/ML Data Modelling
  • Encrypted Database Querying
  • Encrypted Biometrics and Behavioral Data
  • Encrypted Data Linkage
• Service
  • Managed Service
  • Professional Service

Market, By Application

• Secure Data Computation
• Data Monetization
• Data Privacy
• Regulatory Compliance

Market, By End-Use

• BFSI
• Healthcare
• Government
• IT & Telecom
• Others

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

• North America
  • U.S.
  • Canada
• Europe
  • UK
  • France
  • Italy
  • Germany
  • Spain
  • Russia
• Asia Pacific
  • China
  • Japan
  • India
  • ANZ
  • South Korea
• LATAM
  • Brazil
  • Argentina
  • Mexico
• MEA
  • UAE
  • South Africa
  • Saudi Arabia