Encryption Software Market is expected to exceed USD 21 billion by 2026. The market growth is attributed to supportive government initiatives to combat cybercrimes and the rising instances of data breaches globally. For example, in November 2019, China’s State Cryptography Administration (SCA) published a draft of an encryption law, which will regulate encryption in the private & public sectors. The draft also set guidelines on the usage of cryptography to safeguard national security. The growing implementation of disk, email, and mobile encryption capabilities in security suites provided by the cybersecurity vendors to address the evolving threats will augment market growth.
Some major findings of the encryption software market report include:
- The industrial verticals including healthcare, retail, and BFSI witnessed the heavy adoption of data protection solutions to protect sensitive/non-sensitive data and applications
- According to the HIPPA Journal, globally, the healthcare sector witnessed the highest breach costs, accounting for an average mitigation cost of USD 6.45 million
- The cloud-based encryption software is gaining immense popularity as enterprises are migrating toward cloud platforms to store massively growing enterprise data and to leverage benefits in the form of on-demand scalability and reduced operational expenses
- Various small cybersecurity vendors and emerging startups are emerging in the market, offering a wide range of solutions to cater to the security needs of enterprises, expanding their customer base
- The emerging startups, including Enveil (U.S.), Cosmian (Paris), Duality (U.S.), PreVeil LLC (U.S.) are focusing on fund-raising activities to develop new offerings and support business expansion. For instance, in September 2019, PreVeil raised USD 7 million in a Series B funding round led by Presidio Ventures to expand its business in the Japanese market.
The email encryption software market is expected to hold a share of over 25% in 2026 due to the rising uptake of security software to protect data from malware, identity thefts, and phishing. As email is one of the widely used communication methods used by enterprises, the demand for email data protection software to secure various aspects of email systems including content, media attachments or email access increases. The software encrypts data in transit and at rest and also supports multi-factor authentication for additional security, ensuring that sensitive information is always protected in line with regulatory compliance.
The on-premise deployment model segment held over 70% of the market share in 2019 and is projected to maintain a dominant position over the forecast timeline. The enterprises prefer an on-premise deployment model approach due to the high security associated with managing sensitive data in-house and gain access to cryptography keys for enhanced security. However, with the growing popularity of cloud platforms to store enterprise data due to high scalability and cost benefits, the demand for cloud-based encryption software is expected to accelerate over the forecast timeline.
The retail sector will also observe the heavy uptake of encryption over the projected timeframe owing to the need to protect customer data throughout a retailer’s operations. The sector is witnessing a huge usage of third-party services to support online transactions, optimizing customer experience on their websites. This has led to a rise in the number of data breaches, exploiting sensitive customer information such as credit card & bank account details and personal credentials. According to a report published by Thales eSecurity, a cybersecurity provider, around 75% of the U.S. retailers have experienced a breach in 2018 as compared to 52% in 2017, exceeding the global average. The demand for cybersecurity solutions will rise significantly from 2020 to 2026, preventing theft & customer information compromise.
Latin America encryption software market is expected to grow at a CAGR of over 18% from 2020 to 2026 due to the rising number of cyberattacks on the business-critical infrastructure, growing usage of digital platforms among enterprises to conduct business transactions, and supportive government initiatives to promote cybersecurity. For instance, since December 2019, the Mexican institutions including Mexico Central Bank, the National Defense Ministry (Sedena), Mexico Supreme Court, and the House of Representatives recorded more than 45 million attempted attacks to access databases and steal information. The rapidly evolving threat landscape has compelled public & private enterprises to promote digital security to safeguard sensitive business information. The government agencies in the countries including Mexico, Brazil, and Argentina are introducing cybersecurity strategies to respond to a wide array of cyberattacks. For instance, in November 2017, the Mexican government presented the National Cyber Security Strategy in collaboration with the Inter-American Committee against Terrorism (CICTE). The strategy aims at establishing best practices to fight against cybercrimes.
The competition in the encryption software market is characterized by strategic partnerships, new product launches, and geographic expansion. For instance, in November 2019, Sophos partnered with Telefonica UK (O2) to provide its products & services to Telefonica’s customers in the UK. The partnership enables the customers to gain access to Sophos Central cloud-based security platform to secure their organizations. The company’s products & services also enable customers to minimize cybersecurity risks by using behavioral analytics and machine learning to identify known & unknown threats. In August 2018, Kapalya, a Hawaii-based cybersecurity startup, introduced a data protection solution to secure data at rest and data in transit on private & public clouds and mobiles. The platform allows users to work on any device, ensuring end-to-end encrypted file sharing.