Encryption Software Market Size, Share, Industry, Forecast and outlook (2024-2031)

Global Encryption Software Market is Segmented By Component(Software, Services), By Deployment Mode(On-Premise, Cloud), By End-User(BFSI, Healthcare, Retail & E-Commerce, Education, IT & IT Services, Government, Others), By Organization Size(Small & Medium Enterprises, Large Enterprises), and By Region (North America, Latin America, Europe, Asia Pacific, Middle East, and Africa) – Share, Size, Outlook, and Opportunity Analysis, 2024-2031

Report Overview

The Global Encryption Software Market size was worth US$ 14.39 billion in 2023 and is estimated to reach US$ 47.52 billion by 2031, growing at a CAGR of 17.17% during the forecast period (2024-2031). 

Data encryption converts readable data into an encoded format that can only be read or processed with the help of a decryption key. Data encryption ensures the integrity of user information transmitted over the network simply and effectively. Encryption is critical for many reasons, not just surfing. A hacker or thief won't negotiate their possession into identity theft, bank account takeover or worse if it encrypts all of the sensitive papers on the computer. 

Encryption software can protect operational data moving over the internet or private networks, idle data on physical devices and businesses' existing cybersecurity policies. Firms can rely on standard cybersecurity solutions because encrypted data is resistant to hackers in data theft or entry into physical devices.

According to compliance and security needs, encryption software helps secure the confidentiality of information kept in folders and files and flows over networks or in transit. It uses software to encrypt and decrypt data at rest and in transit. As a result, encryption software helps to improve the security of confidential data by rendering the data unreadable even by the person allowed. As a result, the usage of encryption software is projected to rise in reaction to the rising number of cyber-attacks.

Market Scope

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Market Dynamics

Stringent regulatory standards and data privacy compliances, raising concerns about the loss of crucial data and a tremendous increase in the adoption of cloud and virtualization technologies are primary reasons driving the encryption software industry. 

The growing demand for data protection in SMEs

SME data, networks, endpoints and apps are not protected by robust security procedures in various industrial verticals. Cloud-based solutions are fast-growing among businesses, as the most common delivery model must meet IT security requirements.

Cloud implementation streamlines corporate processes by providing flexibility, scalability and cost-effectiveness. With SMEs increasingly focusing on cloud solutions, cloud encryption solutions and service providers are projected to see more chances to protect SMEs' data from security breaches and vulnerabilities.

The rising stringent regulations for data privacy

Most of today's standards and compliance rules are primarily concerned with protecting private data at rest, during transactions and while it traverses network connections. Proper encryption technology improves overall security while complying with data security and privacy requirements. Companies that sell encryption software provide user access controls and data encryption features to help end users comply with various data security and privacy regulations, including PCI-DSS, HIPAA, GDPR and the California Consumer Privacy Act (CCPA). Industries including BFSI, retail and healthcare, must comply with data protection requirements like PCI-DSS and HIPAA, which has resulted in a global need for encryption solutions.

The General Data Protection Rule (GDPR) is a ground-breaking regulation that oversees data privacy laws across Europe. It establishes norms for businesses in the EU for collecting, storing and exploiting personal data. GDPR rule violations result in significant fines that corporations must pay. PCI DSS is a data security standard made to assist businesses in processing card payments and preventing credit card fraud. As a result of these government regulations and regulatory compliances, businesses are being forced to implement encryption software and services.

Complexity, ineffective management of encryption software and risks of pirated software

Some organizations use various encryption technologies provided by vendors. Basic key management software can handle keys from numerous encryption systems in organizations with different encryption systems. One of the primary challenges for admin and IT teams is the inefficiency of key management software in handling keys. However, if the encryption key is leaked, important firm data is accessible to hackers, who will obtain it without a password or decryption key.

On the other hand, pirated encryption software, which refers to the unauthorized copying of licensed versions of the software, is one of the major downsides of the encryption software industry. Soft lifting, software counterfeiting, OEM bundling, hard drive loading and rentals are examples of software piracy. Many firms employ pirated software since they are cost-effective. The use of such software will have a detrimental impact on market growth. 

Market Segment Analysis

By organization size, the encryption software market is segmented into small & medium enterprises and large enterprises.

The rising risks of fraud and security in small & medium enterprises 

SMEs widely use encryption software to comply with regulations and mitigate fraud risks. The present use of mobile technology and the acceptance of BYOD trends and cloud-based services has helped SMEs improve their overall business structure and profitability. Data flow via business networks to personal devices, such as mobile phones and laptops, has increased, increasing false data, cyberattacks, data losses and the potential for personal data theft. 

As security concerns have grown, SMEs have been obliged to focus on encryption solutions to secure and protect their data and personal information from being hacked or breached. Malicious cyber actors and APT organizations that employed COVID-19 themes exploit the pandemic, placing SMEs at risk of phishing scams and ransomware assaults. When it comes to using encryption technology, SMEs have several challenges, including a lack of financial resources and technical knowledge.

Despite their budget limits, SMEs are compelled to utilize encryption solutions for data protection due to the need to protect corporate information. The loss of data could harm the company's brand image, resulting in a loss of consumers and income. The encryption solutions were created with SMEs' low budgets in mind. They are accessible via the cloud at a reasonable cost. SMBs can use the solutions to protect their data and company information while gaining secure real-time access. Encryption solutions are projected to gain widespread use among SMEs in the coming years.

Market Geographical Share

The growing need for cybersecurity in Asia-Pacific

The Indian government has proposed that internet intermediaries actively filter online material and identify the origins of private conversations using end-to-end encryption. To provide adequate data security in the cloud, most companies offer cloud encryption application-based software. The tremendous rise is attributable to rigorous rules and increasing breakthroughs in innovative financial technologies.

Asian governments, such as China, Singapore and Japan, are devoting a considerable portion of their federal budgets to improving their cybersecurity regimes. Government initiatives, fund assistance and R&D have all aided in the development of encryption solutions and services, contributing to the market's growth.

A scarcity of trained cybersecurity professionals in Asia-Pacific fuels the demand for consulting services, propelling the encryption software market to rise at a substantial CAGR over the forecast period. Several market competitors provide consultancy services for efficiently deploying encryption software in the region.

Market Competitive Landscape

Major global encryption software market companies include IBM Corporation, Amazon Web Services, Inc., Microsoft Corporation, Check Point Software Technologies Pvt., Ltd., Cisco System, Inc., Fortinet, Fujitsu, F-Secure, Palo Alto Networks, Inc. and Oracle Corporation.

COVID-19 Impact Analysis

As a result of COVID-19, rapid digital transformation techniques have increased the volume of data stored in clouds, causing new issues with performance, availability and security that necessitate the use of encryption software solutions and services. Furthermore, as a result of COVID-19, enterprises are increasingly focused on centrally controlling multiple cloud resources. Thus, data security is becoming increasingly important. 

The demand for encryption software for security assessments is likely to increase even more globally for threat intelligence during the pandemic due to the increased 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. As firms migrate from a physical office environment to remote working to combat virus transmission, the risk of cyber-attacks may rise. 

Remote work on a large scale is expected to have a substantial impact on the market, increasing the demand for IT infrastructure and business cybersecurity measures. This would put enormous pressure on security agencies to tailor IT solutions and adjust procedures to fight new threats. The current high demand for encryption technologies as a result of rising malware, phishing and ransomware attacks will benefit the market.

Russia-Ukraine War Impact

The war between Russia and Ukraine has increased demand for encryption software as businesses and governments seek to protect sensitive data from emerging cyber threats. The debate highlighted the importance of strong encryption in protecting communications, financial transactions and critical infrastructure against espionage and cyberattacks. As a result, there has been a rise in investment in encryption technology, with corporations and institutions focusing on end-to-end encryption and advanced cryptographic solutions to preserve data confidentiality and integrity.

Furthermore, the war has prompted political changes and increased awareness of data sovereignty, hastening the use of encryption software in a range of industries. Countries are calling for stricter data protection rules and encouraging the use of encryption to preserve national security and privacy. It has resulted in a flourishing market for encryption software, as governments and cybersecurity businesses collaborate more closely to develop and implement cutting-edge encryption solutions geared to combat sophisticated cyber threats arising from the geopolitical conflict.

By Component 

• Software
• Service

By Deployment Mode

• Cloud Services
• On-premise

By Organization Size

• Small and Medium Enterprise
• Large Enterprises

By End-user

• BFSI
• Healthcare
• Retail & E-Commerce
• Education
• IT & IT Services
• Government
• Others

By Region

• North America
  • U.S.
  • Canada
  • Mexico
• Europe
  • Germany
  • UK
  • France
  • Italy
  • Spain
  • Rest of Europe
• South America
  • Brazil
  • Argentina
  • Rest of South America
• Asia-Pacific
  • China
  • India
  • Japan
  • Australia
  • Rest of Asia-Pacific
• Middle East and Africa

Key Developments

• In June 2023, Amazon Web Services released a new encryption option known as Amazon S3 dual-layer server-side encryption with keys stored in AWS Key Management Service (DSSE-KMS). This advanced feature improves the security of things uploaded to an Amazon Simple Storage Service (Amazon S3) bucket by encrypting them twice. Using DSSE-KMS, customers may meet legal standards and apply several layers of encryption to their data, ensuring greater data protection.
• In May 2023, Vaultree substantially improved healthcare data security by presenting the industry to their cutting-edge, fully functional Data-in-Use encryption system. Vaultree's technology, which includes a unique software development kit and an encrypted conversation application, transforms the data encryption landscape. 
• In February 2023, Irdeto, a digital platform cybersecurity provider, released an improved version of their software development kit (SDK) called ActiveCloak for Media (ACM). This improved solution has numerous levels of protection to protect against the unauthorized extraction of content encryption keys from devices.

Why Purchase the Report?

• Visualize the composition of the encryption software market segmentation by component, deployment mode, organization size, end-user and region, highlighting the critical commercial assets and players.
• Identify commercial opportunities in the encryption software market by analyzing trends and co-development deals. 
• Excel data sheet with thousands of encryption software market-level 4/5 segmentation points.
• Pdf report with the most relevant analysis cogently put together after exhaustive qualitative interviews and in-depth market study. 
• Product mapping in excel for the key product of all major market players

The global encryption software market report would provide access to an approx. 69 market data table, 63 figures and 213 pages. 

Target Audience 2024

• Encryption Software Providers/ Buyers
• Industry Investors/Investment Bankers
• Education & Research Institutes
• Emerging Companies
• Encryption Software Manufacturers