Encryption Software Market Expected to Reach $66.5 Billion by 2032—Allied Market Research

According to a new report published by Allied Market Research, titled, “Encryption Software Market, by Component (Software, and Services), Deployment Mode (On-premise, and Cloud), Organization Size (Large Enterprises, and Small & Medium Enterprises), Function (Disk Encryption, File/Folder Encryption, Communication Encryption, and Cloud Encryption) and Industry Vertical (BFSI, IT/Telecom, Government & Public, Retail, Healthcare, Aerospace & Defense, Media & Entertainment, and Others)." The encryption software market was valued at $13.7 billion in 2022, and is estimated to reach $66.5 billion by 2032, growing at a CAGR of 17.4% from 2023 to 2032.

The main purpose of encryption software is to protect the confidentiality of the data stored in files/folders and disks and the data traveling over a wireless network or data-in-transit, depending upon the security and compliance requirements of an organization. This is achieved by converting a message or plain text into a coded message called the cipher text so that only the authorized parties can read it. Software-based encryption uses software to encrypt and decrypt data at rest as well as data in transit. Thus, by rendering the data unreadable by unauthorized persons, encryption software ensures the safety and security of the confidential data. Moreover, the growing number of complexity and data breaches and increased compliance regulation among organizations drives the growth of the market. In addition, the surge in adoption of bring your device (BYOD) and increased mobility fuels the growth of the market. However, a lack of awareness about encryption software and limiting the use of encrypted devices in some countries hampers the growth of the market. Furthermore, the rise in demand for cloud-based encryption software is expected to provide lucrative opportunities for the growth of the market.

The disk encryption segment is expected to garner a significant share during the forecast period. This is attributed to the increase in regulatory compliances regarding the protection of private and sensitive data and the reduction in prices of disk encryption devices majorly driving the growth of the market in this segment. However, the cloud encryption segment is expected to grow at the highest rate during the forecast period, owing to the rise in virtualization of small and medium enterprises.

Region-wise, the encryption software market was dominated by North America in 2022 and is expected to retain its position during the forecast period. The major factors that drive the growth of the market in this region include the implementation of several government initiatives, which have helped the region to expand its IT security investment. However, Asia-Pacific is expected to witness a significant growth rate during the forecast period, the growth of the Asia-Pacific encryption software market is driven by heavy investments made by private and public sectors for securing sensitive data, which is resulting into increased demand for encryption software used to secure and ensure privacy of data.

Rapid technological advancements are occurring in the encryption software market to strengthen data security, optimize encryption efficiency, and tackle new challenges in the digital sphere. The adoption of quantum-resistant encryption algorithms, which are made to withstand the processing power of quantum computers and potentially jeopardize conventional encryption techniques, is one notable accomplishment. In the post-quantum computing era, quantum-resistant encryption techniques, such as hash- and lattice-based cryptography, provide a strong defense against quantum attacks and guarantee the long-term security of sensitive data. Moreover, the integration of homomorphic encryption technology is revolutionizing data privacy and security by enabling computations on encrypted data without decrypting it first. Homomorphic encryption allows for secure and privacy-preserving data processing in cloud environments, facilitating secure outsourcing of data analytics and machine learning tasks while preserving data confidentiality and integrity. This technology has significant implications for industries handling sensitive data, such as healthcare, finance, and government, where privacy and regulatory compliance are paramount.

Furthermore, the development of blockchain-based encryption solutions is reshaping the encryption software landscape by providing decentralized and tamper-resistant platforms for secure data storage, transmission, and authentication. Blockchain technology leverages cryptographic principles to create immutable and transparent ledgers, ensuring data integrity and trust among participants in distributed networks. By integrating encryption mechanisms into blockchain protocols, organizations can establish secure and auditable data transactions, streamline supply chain operations, and mitigate the risk of data tampering and unauthorized access.

Additionally, the advancement of post-quantum key management systems is crucial for ensuring the secure generation, distribution, and storage of encryption keys in quantum-resistant environments. Post-quantum key management solutions leverage cryptographic primitives and key exchange protocols resilient to quantum attacks, ensuring the confidentiality and authenticity of encryption keys across diverse cryptographic systems and communication channels.

Key Findings of The Study

• By component, the software segment accounted for the largest encryption software market share in 2022.
• Region-wise, North America generated the highest revenue in 2022.
• Depending on the end-user, the BFSI segment generated the highest revenue in 2022.

The key players profiled in the encryption software market analysis are Amazon Web Services, Inc. (AWS), Check Point Software Technologies, Cisco System, Inc., F-Secure, Fortinet, Inc., IBM Corporation, Microsoft Corporation, Oracle Corporation, Palo Alto Networks, Inc. and Trend Micro Incorporated BFSI. These players have adopted various strategies to increase their market penetration and strengthen their position in the encryption software industry.