Global Encryption Software Market Size Analysis Report - Market Share, Forecast Trends and Outlook (2024-2032)

Global Encryption Software Market Outlook

The global encryption software market size was valued at USD 12.80 billion in 2023. The market is further projected to grow at a CAGR of 16.3% between 2024 and 2032, reaching a value of USD 49.75 billion by 2032.

Key Takeaways

Encryption software is a type of security program that uses cryptography to convert data into a secret code, making it unreadable to unauthorised users. This software enables the encryption and decryption of data, protecting it from being stolen, changed, or compromised. It uses mathematical algorithms to scramble data into ciphertext, which can only be unlocked with a decryption key. Encryption software is essential for safeguarding sensitive, confidential, or personal information across the internet. The demand for database encryption is on the rise as these software plays a crucial role in ensuring the confidentiality of digital data stored on computer systems or data transmitted over network.

Numerous reports state that the growing need for data security and privacy, the increase in cyberattacks and data breaches, the expanding use of cloud-based services, and the growing popularity of mobile devices are the main factors propelling the growth of the encryption software market. The need to safeguard sensitive data from unauthorised access and the growing requirement for regulatory compliance are the other factors fuelling the encryption software market growth.

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Key Trends and Developments

Rising popularity of cloud-based encryption, increasing use of encryption in IoT devices, and growing adoption of quantum-resistant encryption are boosting the market growth

Global Encryption Software Market Trends

Data encryption market size is expected to increase due to the increasing use of encryption software in various industries such as healthcare, government, and banking, financial services, and insurance (BFSI). The market is also driven by the increasing adoption of encryption software by small and medium-sized enterprises (SMEs) and the growing trend of Bring Your Own Device (BYOD) policies in organisations.

Organisations, big and small, are exceedingly investing in employing digital solutions in their business operations to improve their productivity and expand their distribution channels while streamlining the varied processes involved. The growing internet penetration and increased digitalisation with heightened adoption of internet of things (IoT) across different industry verticals are expected to enhance encryption software market landscape.

Moreover, with the growing trend of remote working facilities and the usage of enterprise mobility solutions such as smartphones and tablets, the risk for data leaks and data theft has also increased. As a result, enterprises are investing in quality encryption software mechanisms to mitigate the risk of data theft, especially in cloud-based operations. In addition, the rising awareness pertaining to encryption technology is also contributing to its popularity in the market. These factors are estimated to positively impact the cloud encryption software market.

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Market Segmentation

Global Encryption Software Market Report and Forecast 2024-2032 offers a detailed analysis of the market based on the following segments:

Among services, the market can be sub-segmented based on type into professional services and managed services.

Cloud encryption software are expected to hold significant market share due to the implementation of cloud technology in major industry verticals

According to encryption software market analysis, the cloud encryption segment is predicted to hold a significant market share. This growth can be attributed to the increased implementation of cloud technology in major industry verticals such as the healthcare and retail industry to consolidate business processes, provide access and storage to a wide range of data, and improve work efficiency. In addition, the increased demand for data security to mitigate the risk of data theft and leak is further aiding the market growth. Cloud encryption helps to encode the data as it travels to improve the security of stored data. These factors are expected to contribute to the overall encryption software market growth in the forecast period.

Traditionally, enterprises across various industries have relied on disks and drives to store their data, making them highly vulnerable to malware and data theft. As a result, the demand for disk encryption software has increased significantly and the segment is expected to grow in the forecast period. Encrypted disks ensure the safety of data even if the disks are lost or stolen, as access to their contents remains restricted to authorised users. The growing prevalence of the Bring Your Own Device (BYOD) trend has further amplified the necessity for robust encryption techniques, as it enables the exchange of critical data on employee devices. These factors have collectively contributed to the escalating demand for disk encryption software and thus, can result in encryption software market expansion.

Banking, Financial Services, and Insurance (BFSI) industry has a heightened demand for encryption software because of the rising data breach cases

BFSI industry is anticipated to lead the encryption software market share in the forecast period. Encryption technology ensures that confidential data remains unreadable to unauthorised users, thereby protecting the integrity of financial data and preventing tampering or alteration. Encryption is also necessary for credit card fraud prevention, online banking transaction security, and digital signature verification during fund transfers. The use of encryption software also helps companies comply with regulations like GDPR (General Data Protection Regulation), and it plays a pivotal role in reducing financial losses, optimising business operations, and fostering consumer trust. The rising prevalence of cyberattacks, the increasing demand for data security and safety, and the growing adoption of digital payment technologies are driving the expansion of banking encryption software market.

By making it harder for hackers to access sensitive patient data, encryption in the healthcare industry helps to reduce the risk of data breaches. Encryption helps to ensure that patient information is shared securely without the risk of unauthorised access, which is important when healthcare providers need to share information with other healthcare organisations. As per the encryption software market report, healthcare organisations need to adhere to several rules and guidelines, such as the Health Insurance Portability and Accountability Act (HIPAA). These regulations mandate that healthcare providers use data encryption and other security measures to protect patient information.

Moreover, the adoption of encryption software by government and public utilities due to the need to comply with stringent regulations, such as digital signature services (DSS) and HIPAA is further augmenting the growth rate of encryption software market. The demand for encryption software is further being driven by the IT and telecommunications sector's growing reliance on cloud services, the need to adhere to data protection laws like the California Consumer Privacy Act (CCPA) in North America and the General Data Protection Regulation (GDPR) in Europe, and the rapid adoption of Internet of Things devices.

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Competitive Landscape

Market participants are actively introducing new encryption software to cater to diverse consumer and industry demand, further complying with evolving regulatory landscape.

Other key players included in the encryption software market include Micro Focus International Plc, Sophos Group, VeraCrypt, Broadcom Inc., Nord Security Inc., and AxCrypt AB, among others.

Global Encryption Software Market Analysis by Region

North America has the leading market share due to the high presence of major market players in the region

North America is estimated to hold a dominant position in encryption software industry due to the presence of leading market players, such as IBM and Microsoft in the region. The heightened adoption of digital solutions across industry verticals is leading to an increased demand for encryption software to protect digital data. Moreover, the increased investment in the development of encryption software technologies may increase the encryption software market value in the coming years.  In addition, the region's well-established IT and telecommunications sectors are further contributing to market expansion.

However, because of the rising frequency of cyberattacks in the Asia Pacific region, the market is anticipated to grow significantly. Other significant factors boosting the encryption software market development include the growing adoption of cloud-based services, the increasing penetration of IoT and cloud services, and the advancements in the manufacturing sector of China and India. Furthermore, the lack of storage infrastructure in government agencies may present significant opportunities to create solutions that reduces and prevent data theft.

Key Highlights of the Report