| Report Code: A00267 | Pages: 399 | Oct 2020 | 18315 Views | ||
| Author(s) : Rachita R | Tables: 179 | Charts: 91 |
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Pandemic disrupted the entire world and affected many industries.
Get detailed COVID-19 impact analysis on the Hardware Encryption Market
Request Now !The global hardware encryption market generated revenue of $131.77 billion in 2019, and is projected to garner $1,239.85 billion by 2027, registering a CAGR of 32.2% during the forecast period. Hardware encryption involves encoding of data or information into a form, which is accessible to only authorized users. Encoding of the hardware requires an encrypting algorithm that generates cipher text, which can be read only after decryption. Decoding this private data needs an authorized user to type in a key or a password. In hardware-based encryption process, both the encryption and decryption is carried out by individual processors. Encryption and decryption process plays an important role in preventing unauthorized access to sensitive or private data. Hardware encryption helps users to protect confidential data during transmission and storage. With advancements in technology, leading market players are developing various hardware-encrypted solutions to cater to the increasing demands in the storage industry which is providing lucrative hardware encryption market opportunity.
Due to COVID-19 pandemic, work from home orders resulted into a short-term increase in PCs and other systems for remote work, which has also driven the additional demand in the data centers which supports cloud-based and remote work. This will drive demand for SSDs for primary storage and nearline HDDs for bulk secondary storage throughout 2020.
The hard disk drive (HDD) segment dominated the hardware encryption market share in 2019, and is expected to continue this trend during the forecast period. This is attributed to high adoption of HDD for secondary storage, owing to the ability to provide high storage capacity at reduced prices, which fuels the growth of the market. However, the solid-state drives (SSD) segment is expected to witness highest CAGR during the forecast period, due to rapid increase in cases of data breaches and continuous expansion of digital content.
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The consumer electronics segment dominated the hardware encryption market in 2019, and is expected to continue this trend during the forecast period. This is attributed to emergence of bring-your-own-devices (BYOD) across number of organizations, which is expected to generate the need for hardware-encrypted security. However, the healthcare segment is expected to grow at the highest rate during the hardware encryption market forecast period. This is attributable to increase in risk of data breach and rise in government initiatives to increase the adoption of hardware encryption in the healthcare sector. For instance, government regulatory policies such as Health Insurance Portability and Accountability Act (HIPAA) and Centers for Medicare & Medicaid Services (CMS) security requirements for electronic health records (EHRs) drive the market for hardware encryption.
Asia-Pacific dominated the hardware encryption market in 2019, and is projected to remain dominant during the forecast period. The growth of the market is driven by factors such as high population density, increase in household income, and rapid growth in the middle-class population in Asia-Pacific. In addition, hardware encryption is majorly applicable across industries such as healthcare, BFSI, automotive & transportation, and military & aerospace, which supplements the hardware encryption market growth.
The report focuses on the growth prospects, restraints, and hardware encryption market analysis. The study provides Porter’s five forces analysis of the hardware encryption market to understand the impact of various factors such as bargaining power of suppliers, competitive intensity of competitors, threat of new entrants, threat of substitutes, and bargaining power of buyers on the hardware encryption market trends.
The global hardware encryption market is segmented into algorithm & standard, architecture, product, application, end use, and region. Depending on algorithm & standard, the market is fragmented into RSA, AES, and others. On the basis of architecture, it is classified into ASIC and FPGA. The product segment includes HDD, SSD, USB, and incline network encryptor. The applications covered in the market include consumer electronics, IT & telecom, automotive & transportation, aerospace & defense, healthcare, and others. The end-use segment is segregated into industrial, commercial, residential, and government. Region wise, is the market is analyzed across North America, Europe, Asia-Pacific, and LAMEA.
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The key players operating in the hardware encryption market include International Business Machines (IBM) Corporation, Kingston Technology Company, Inc., McAfee, LLC, Micron Technology, Inc., NetApp, Samsung Electronics Co., Ltd., Seagate Technology LLC, Symantec Corporation, Toshiba Corporation, and Western Digital Technologies, Inc.
COVID-19 impact analysis
Post COVID-19, the size of the hardware encryption market is estimated to grow from $175.72 billion in 2020, and is projected to reach $1,239.85 billion by 2027, registering a CAGR of 32.2%. The current estimation of 2027 is projected to be moderately higher than pre-COVID-19 estimates. The COVID-19 outbreak has a moderate impact on the growth of the global hardware encryption market, as the outbreak of the COVID-19 pandemic has led to the imperative need for organizations and individuals to focus on data protection, recovery, and storage, owing to the fact that encryption has become a critical tool helping them navigate a global health crisis. In addition, hardware encryption facilitates safer work-from-home practices and protecting the integrity of information as well as the critical health services. Furthermore, it enabled governments across the globe to rapidly respond to the pandemic situation in a secured manner. For instance, in July 2020, Apricorn, the manufacturer of software-free, 256-bit AES XTS hardware-encrypted USB 3.2 storage devices, launched the Aegis Secure Key 3NXC – the device with a USB-C connector.
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Increase in regulatory compliances regarding protection of private & sensitive data, decline in prices of hardware encryption devices, surge in penetration of consumer electronics such as smartphones & tablets, and rise in complexity & volume of data breaches & brute-force attacks are the key factors that impact the growth of the global hardware encryption market. In addition, widespread adoption of Internet of Things (IoT) technology & cloud services and ongoing technological advancement in encryption chip are positively influencing the market growth. Furthermore, high capital investment and limited use of encrypted devices in some countries are expected to hinder the growth of the market. However, each of these factors is anticipated to have a definite impact on the growth of the global market during the forecast period.
Decline in prices of hardware encryption devices
Technological advancements have helped to reduce average cost of hardware encryption devices, and this trend is expected to continue in the future. As the cost differences between hardware-encrypted and non-hardware-encrypted devices become negligible, hardware encryption would be considered a default standard in HDDs and USB drives. With reduced cost difference, non-hardware-encrypted devices are anticipated to gradually lose their significance. Furthermore, hardware-enforced security offers a cost-effective solution with enough level of security to protect against new attacks introduced by hyper-connectivity. This has shifted the preference of majority of the users toward hardware-encrypted devices as compared to software encryption, as there is low differences in the price, thereby fueling the growth of the global market.
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Key Benefits For Stakeholders
Hardware Encryption Market Report Highlights
| Aspects | Details |
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| By Algorithm Standard |
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| By Architecture |
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| By Product |
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| By Application |
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| By End Use |
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| By Region |
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| Key Market Players | BROADCOM INC., INTERNATIONAL BUSINESS MACHINES CORPORATION, KINGSTON TECHNOLOGY COMPANY, INC., MCAFEE, LLC, MICRON TECHNOLOGY, INC., NETAPP, SAMSUNG ELECTRONICS CO., LTD., SEAGATE TECHNOLOGY LLC, TOSHIBA CORPORATION, WESTERN DIGITAL TECHNOLOGIES, INC. |
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According to the insights of CXOs of leading companies, the adoption of hardware encryption has increased for protecting sensitive data on portable devices such as USB flash drives and laptops. Numerous benefits provided by hardware encryption technology such as consistent performance, ease of use, and robust protection against common sophisticated attacks offset its cost higher. For instance, any brute-force attacks by hackers to gain access to hardware-encrypted chips can be easily thwarted with the help of this. Moreover, implementation of enterprise mobility and Internet of Things (IoT) across numerous industry verticals has led to surge in demand for hardware-encryption devices. Furthermore, to encourage flexibility in work, employees use various mobile devices for sharing confidential information, which increases the vulnerability of data breaches.
Thus, governments as well as regulatory authorities across the globe have imposed a certain set of guidelines and compliance requirements that prompt organizations to adopt stringent cybersecurity solutions for safeguarding enterprise data, network, endpoint, application, and cloud environment. Owing to implementation of these different laws & regulations, organizations are increasingly adopting hardware encryption devices to protect critical enterprise data, which is opportunistic for the global market growth.
Furthermore, Advanced Encryption Standard (AES), a specification standard by the National Institute of Standards and Technology (NIST), is gaining importance for data security in both the hardware and software encryption methods. The cryptographic module is rapidly gaining adoption among number of industries such as healthcare, government, military, and financial organizations in the U.S.
Moreover, advanced encryption standard has become a popular algorithm adopted in symmetric key cryptography by a number of governmental agencies in the U.S. The use of AES in longer cryptographic keys offers easy implementation, and can be used in restricted environments such as smart cards. The global hardware encryption market is consolidated and competitive, owing to the presence of well-diversified regional and international vendors. Prominent strategies such as product launch and acquisition are adopted by leading companies in an effort to expand their product offerings. The prominent players such as Seagate Technology LLC, Toshiba Corporation, and IBM are analyzed in the report in an effort to gain an insight into their winning strategies.
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