The network encryption market revenue totalled ~USD 4.1 Billion in 2023 and the sales are expected to reach ~ USD 8.7 Billion by 2033, growing at a CAGR of 7.7% over the forecast period of 2023 and 2033.
| Attributes | Details |
|---|---|
| Network Encryption Market Estimated Value (2023) | USD 4.1 Billion |
| Network Encryption Market Projected Year (2033) Value | USD 8.7 Billion |
| CAGR% (2023 to 2033) | 7.7% |
| Top 5 Vendor Market Share | Around 45% |
Several end users are using communication support modules (CSMs) to encrypt data transmissions over the network. Transport layer security (TLS), successor of secure sockets layer (SSL) are communication protocols are extensively used in BFSI, IT, and other industries.
These protocols use encryption to offer data privacy and integrity across a secure end-to-end connection between two points on a network. Need for securing internal networks and virtual private networks of organizations serves as a catalyst for advancements in the network encryption market.
According to Future Market Insights, network encryption market is nearly 14% of network security market.
| Market Statistics | Details |
|---|---|
| Jan to Jun (H1), 2021 (A) | 7.5% |
| Jul to Dec (H2), 2021 (A) | 7.6% |
| Jan to Jun (H1),2022 Projected (P) | 7.8% |
| Jan to Jun (H1),2022 Outlook (O) | 8.2% |
| Jul to Dec (H2), 2022 Outlook (O) | 8.3% |
| Jul to Dec (H2), 2022 Projected (P) | 7.9% |
| Jan to Jun (H1), 2023 Projected (P) | 7.9% |
| BPS Change : H1,2022 (O) - H1,2022 (P) | (+)40 |
| BPS Change : H1,2021 (O) - H1,2021 (A) | (+)70 |
| BPS Change: H2, 2022 (O) - H2, 2022 (P) | (+)40 |
| BPS Change: H2, 2021 (O) - H2, 2022 (A) | (+)70 |
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Several organizations are implementing network encryption solution to apply security to its network to control and protect data internally. The network layer of the open systems interface (OSI) concept is where network encryption takes place.
By applying one or more algorithms, the data packet is sent over the network layer from one node to destination node. The data packet is decrypted when it arrives at the destination node. Use of this software is extensive in sectors such as government & defense, BFSI and IT and others.
On the back of these factors, the network encryption demand is estimated to rise at 7.5% CAGR between 2023 and 2033, estimates Future Market Insights (FMI). The global network encryption market is anticipated to witness an increase in revenue from USD 4.0 Billion in 2023 to ~USD 8.3 Billion by 2033.
The adoption of next generation security solutions helps improve the company's product and operational efficiency. It also enables the network activity to detect anomalies. Next-gen security solutions incorporate real-time threat analysis to protect organization's network infrastructure from cyber threats.
Further, these network encryption solutions help to protect network data, network traffic, email and other data. With rapid growth of advanced IT networks, these next generation security solutions are expected to aid organizations to secure their entire network infrastructure.
BYOE, also known as BYOK (Bring Your Own Key), is an encryption system in which the data owner uses and produces its own cryptographic keys and has access to them. BYOE and BYOK as a solution help boost data security in the cloud without having to rely on a third-party key management vendor.
Customers can use the BYOE solution to run virtualized instances of their own encryption software alongside cloud-hosted business apps. BYOK, in many ways, mirrors the issues with more standard usernames and passwords, primarily adding another degree of operational complexity. Hence, adoption of bring your own encryption in SMEs and large enterprises is boosting the network encryption market.
Several companies are focusing on deploying network encryption on their platforms, including telecom and IT, banking and financial services, media and entertainment, and government. As per FMI, Europe is expected to grow by 1.8X during the forecast period.
Furthermore, organizations in the region are growing rapidly and are in need of network encryption. Adoption of BYOE (Bring Your Own Encryption) concepts in several industries and organizations is expected to boost the Europe market.
However, with burgeoning adoption of BYOE, risk of cyber threats and corporate data breach has increased. Therefore, most organizations in Europe are adopting network encryption solutions to prevent information breaches.
| Countries | BPS Change (H2'22 (O) - H2'22 (P)) |
|---|---|
| USA | (+)44 |
| India | (+)45 |
| United kingdom | (+)43 |
| Japan | (+)39 |
| China | (+)42 |
The H2’22(O) - H2’22(P) BPS change in India was of (+)45 units due to the growing number of cyber-attacks has led organizations to adopt network encryption technology to secure their data and protect sensitive information. Where as in USA rising privacy regulations such as GDPR, HIPAA, and PCI-DSS, organizations are required to implement encryption technology to secure customer data and meet compliance requirements leading to the deviation of (+)44 units.
The proliferation of Internet of Things (IoT) devices has increased the potential attack surface for botnets, thereby boosting the market growth of botnet detection technology resulting in USA a BPS change of (+)43 units for the network encryption market.
United kingdom encountered a BPS change of (+)39 units for the network encryption market due to the increasing use of IoT devices has led to the growth of network encryption technology to secure data transmitted between these devices.
China witnessed a BPS of (+)42 BPS units for the network encryption market attributed to the an increase in remote work, which has created a demand for secure virtual private networks (VPNs) and other network encryption solutions.
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Presence of Prominent Network Encryption Solutions Vendors in Germany to Boost the Market
Europe is predicted to remain one of the most attractive markets during the forecast period. According to the study, Germany is expected to account for nearly 12.6% of the Europe market share through 2033.
Key vendors operating in network encryption market are focusing on collaborating and entering into partnership with other players to target new innovations within the market. The strategy helps the vendors in enhancing their product portfolio with the release of new products.
Companies in Germany are launching industry-specific solutions in order to render industry needs. For instance, in March 2022, a German company Rohde & Schwarz introduced an automated test solution.
The software will allow for time-saving and precise compliance tests of backplanes and cables for ethernet cable assemblies of high speed up to IEEE 802.3ck. Backed by these aforementioned factors, Germany network encryption market will witness an impressive growth rate over the forecast period.
Compliance of End-to-End Encryption will Improve Adoption of Network Encryption Solutions
The network encryption demand in the USA is expected to account for nearly 86.0% of North America market share through 2032. End-to-end encryption has been a major contention between huge tech corporations and law enforcement in the USA
To combat this, three republican senators presented legislation in June 2020 requiring tech companies to provide a backdoor to end-to-end encrypted communication. In response to this, companies such as Apple have claimed that they are incapable of doing so as they do not have access to data that uses this type of encryption.
However, companies were targeted by the bill, who were refusing to cooperate with law enforcement. Further, there is a rise in number of network breaches in the country, driving the demand for network encryption in the country.
Stringent Regulations to Ensure the Privacy of Online Platforms will Fuel Network Encryption Solutions Demand in India
As per FMI, sales of network encryption solutions in India are estimated to increase at 12.5% CAGR between 2023 and 2033. Demand for network encryption solution is rapidly evolving with new law enforcements and policies in India.
Encryption is extensively used for protecting the confidentiality and security of online communication in India. Due to rapid digitalization, domestic and foreign online communication companies are emerging in the country.
For instance, in February 2021, the government of India came up with new regulations which included large social media platforms must allow traceability, or the capacity to disclose information about the originator of online interactions, under these requirements.
Traceability would entail breaching the end-to-end encryption used by many online communication platforms like WhatsApp, which would endanger the security of online communications on such platforms. Such factors are contributing to growth of network encryption solution in India.
Large Enterprises to Account for Nearly Half of Network Encryption Market Sales
In terms of enterprise size, the large enterprises segment is expected to showcase higher market share in 2023. This segment dominated the global market in past and is predicted to account for nearly 49.5% of market share by the end of 2023.
Large enterprises operate differently and have unique security concerns. These enterprises focus on technology like network encryption to protect their core digital assets. Further, large enterprises are adopting cloud services in search of greater efficiencies.
As cybercriminals are increasingly targeting large enterprises, the need for network encryption solution is increasing. The solution provides strong data protection, encode data and files for large enterprises in a way that unauthorized devices or users cannot access it.
Need for Data Security in Healthcare Sector to Propel the Demand for Network Encryption Solutions
The healthcare industry segment accounted for around 14.5% of the overall market share in 2023, and is expected to continue its dominance during the forecast period. The industry is implementing network encryption solution to solve their cyber-attacks and data breach problems.
Over the past few years, healthcare providers are facing data breaches resulting in increasing need for data security. Proliferation of work from home model among healthcare providers, is increasing the number of cyber-attacks for those using an unencrypted and unsecured network.
At the back of these factors, adoption of network encryption solution in healthcare will fuel the growth of global market.
Sales of Network Encryption Devices to Increase at Rapid Pace
The network encryption devices segment is expected to contribute a revenue share of close to 34.1% in 2023, and is expected to showcase a strong CAGR growth over the upcoming years.
File-level encryption, on the other hand, protects both data at rest and data in use. FLE allows to encrypt particular files and folders. IT administrators may secure vital files from prying eyes and corporate drives from being compromised by using both hard-drive encryption and file-level encryption for their workplace devices.
The network encryption market is characterized by the presence of both large-scale and medium-scale players. The network encryption market players are focusing on various strategies for increasing their investments in research and development to support future technologies.
| Attributes | Details |
|---|---|
| Forecast Period | 2023 to 2033 |
| Historical Data Available for | 2018 to 2022 |
| Market Analysis | USD Million for Value |
| Key Regions Covered | North America; Latin America; Europe; South Asia & Pacific; East Asia and the Middle East & Africa |
| Key Countries Covered | USA, Canada, Germany, United kingdom, France, Italy, Spain, Russia, China, Japan, South Korea, India, Australia & New Zealand, GCC Countries, Turkey and South Africa |
| Key Segments Covered | Solution, Enterprise Size, Industry, and Region |
| Key Companies Profiled | Ciena; Huawei; ADVA; F5 Networks; Viasat; TCC; Certes Networks; Atos; Securosys; Thales; Aruba; Juniper Networks; PacketLight Networks; Atmedia; Rhode & Schwarz Cybersecurity |
| Report Coverage | Market Forecast, Company Share Analysis, Competition Intelligence, DROT Analysis, Market Dynamics and Challenges, and Strategic Growth Initiatives |
| Customization & Pricing | Available upon Request |
The healthcare industry is the leading end user in the market.
The market is estimated to secure a valuation of USD 4.1 billion in 2023.
The market is forecast to register a CAGR of 7.7% through 2033.
The network encryption devices segment contribute a revenue share of 34.1% in 2023.
Germany is forecasted to register a market share of 12.6% through 2033.
| Market Size, 2024 | USD 13,389.50 million |
|---|---|
| Market Size, 2034 | USD 54,321.30 million |
| Value CAGR (2024 to 2034) | 15.00% |
| Market CAGR (2022 to 2032) | 12.5% |
|---|---|
| Market Size (2022) | USD 1.3 Billion |
| Market Size (2032) | USD 8.9 Billion |
| Market Value (2022) | USD 4882 Million |
|---|---|
| Market Anticipated Value (2032) | USD 19677 Million |
| Projected CAGR (2022 to 2032) | 15% |
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Network Encryption Market
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