Cloud Encryption Market Size, Share, Forecast, & Trends Analysis by Offering, Service Model (IaaS, SaaS, PaaS), Encryption Type (Symmetric, Asymmetric), Organization Size, End User (IT & Telecom, BFSI, Retail), and Geography - Global Forecast to 2031

The Cloud Encryption Market was valued at $3.6 billion in 2023. This market is expected to reach $30.2 billion by 2031 from an estimated $4.7 billion in 2024, at a CAGR of 30.4% during the forecast period from 2024 to 2031.

Cloud Encryption Market Size & Forecast

The growth of this market is attributed to the increasing importance of cloud security solutions in the BFSI sector, the rising adoption of technologies such as AI, ML, and IoT, and the growing government initiatives supporting cloud adoption.  Moreover, the increasing need for cloud security solutions among SMEs and the rising adoption of BYOD devices are expected to offer growth opportunities for the players operating in this market.

Cloud Encryption Market Growth Drivers

Growing Significance of Cloud Security Solutions in the BFSI Sector

Cloud technology is seeing growing adoption in the BFSI sector as contemporary banks and financial institutions seek innovative strategies to lower costs and boost operational efficiencies. A survey by Google Cloud (developed by Google LLC, U.S.) and The Harris Poll, LLC. (U.S.) indicated that 83% of BFSI sector respondents reported utilizing cloud services to some degree. Among these organizations, 38% favored a hybrid approach, which merges the robust security and control of private clouds with the flexibility and scalability of public clouds. Cloud-based solutions are increasingly vital for transitioning existing IT systems to the cloud, facilitating actionable insights, driving business growth, and advancing infrastructure and digital banking application modernization.

However, the migration of financial data and workloads to cloud servers has led to a rise in cyberattacks. The BFSI sector handles highly sensitive information, including financial records, account details, and personal data. Consequently, cloud security has become a critical measure for organizations aiming to mitigate security risks. Cloud encryption plays a key role in safeguarding data stored on cloud servers, driving the growth of the cloud encryption market during the forecast period.

Click here to: Get Free Sample Pages of this Report

Increasing Adoption of Technologies Such as AI, ML, and IoT

In today's world, advanced technologies are deeply embedded in everyday life, with digitally connected devices and applications prevalent in homes, offices, and vehicles. Many devices and appliances now feature smart capabilities to leverage the benefits of the Internet. However, the widespread adoption of advanced technologies—such as machine learning, artificial intelligence, data analytics, robotics, and the Internet of Things (IoT)—has also led to a rise in cyberattacks across various sectors.

According to AO Kaspersky Lab (Russia), between January and May 2021, organizations detected over 1.5 billion IoT attacks, a significant increase from the 639 million recorded in the previous six months—more than doubling the volume. Additionally, AI, ML, and IoT technologies generate vast amounts of data. Consequently, secure storage and processing of this data within cloud infrastructure necessitate robust cloud encryption solutions. These solutions are essential for protecting data from unauthorized access and breaches, thereby driving the growth of the cloud encryption market during the forecast period.

Cloud Encryption Market Opportunity

Increasing Adoption of the BYOD

In recent years, the surge in mobile and connected devices has become a significant security concern. The widespread adoption of smartphones, tablets, and laptops within enterprises has heightened the risk of exposing company information to cybercriminals. As more employees use their smartphones and devices for work, the potential for data breaches increases. The expanding use of mobile devices and applications has introduced new attack vectors and challenges in data security.

Employees are increasingly utilizing their mobile devices in the workplace, driven by the widespread adoption of BYOD (Bring Your Own Device) policies. Given that mobile devices often lack robust security measures, they present vulnerabilities that hackers can exploit to gain unauthorized access and attack corporate networks. As a result, enterprises are progressively implementing cloud security solutions to safeguard their networks and ensure secure access to sensitive information for employees. The growing prevalence of mobile and wireless devices, advancements in connectivity infrastructure, and decreasing mobile device prices are all poised to significantly influence the cloud encryption market, thereby supporting its growth during the forecast period.

Cloud Encryption Market Analysis: Key Findings

The Solutions Segment to Dominate the Cloud Encryption Market in 2024

Based on offering, the cloud encryption market is segmented into solutions and services. In 2024, the solutions segment is expected to account for the larger share of over 76.0% of the cloud encryption market. The substantial market share of this segment is driven by the rising use of virtualized computing resources among SMEs, the growing prevalence of cybercrimes, and the increasing adoption of cloud-based solutions to manage the expanding volume of data in large enterprises. For instance, in April 2022, Nord Security Inc. (U.K.) introduced NordLocker, an encrypted cloud storage solution designed to provide a secure, convenient, and cost-effective method for organizations to store and manage their data. Moreover, this segment is estimated to register the highest CAGR during the period.

The Software-as-a-Service (SaaS) Segment to Dominate the Cloud Encryption Market in 2024

Based on service model, the cloud encryption market is segmented into Infrastructure-as-a-Service (IaaS), Software-as-a-Service (SaaS), and Platform-as-a-Service (PaaS). In 2024, the Software-as-a-Service (SaaS) segment is expected to account for the largest share of over 44.0% of the cloud encryption market. The significant market share of this segment is due to the growing preference for SaaS delivery models, strategic advancements by key market players, the integration of AI and ML with SaaS solutions, and the rising adoption of SaaS models by organizations for storing substantial amounts of data in the cloud. Moreover, this segment is projected to register the highest CAGR during the period.

The Symmetric Encryption Segment to Dominate the Cloud Encryption Market in 2024

Based on encryption type, the cloud encryption market is segmented into symmetric encryption, asymmetric encryption, and other encryption types. In 2024, the symmetric encryption segment is expected to account for the largest share of over 52.0% of the cloud encryption market. The large market share of this segment is attributed to the rising use of symmetric encryption for bulk data encryption, the growing number of connected devices, and the preference for symmetric encryption solutions, which are simpler and faster compared to asymmetric options. Moreover, this segment is anticipated to register the highest CAGR during the period.

The Large Enterprises Segment to Dominate the Cloud Encryption Market in 2024

Based on organization size, the cloud encryption market is segmented into large enterprises and small and mid-sized enterprises (SMEs). In 2024, the large enterprises segment is expected to account for the larger share of over 71.0% of the cloud encryption market. The large market share of this segment is attributed to the growing adoption of advanced technologies such as cloud computing, AI, and blockchain, the increasing need to adhere to relevant industry security regulations and compliance standards, and the increasing use of cloud encryption for large amounts of data in large enterprise applications.

However, the small and mid-sized enterprises (SMEs) segment is expected to register the highest CAGR during the period. This segment's growth is driven by accelerating digital transformation, the increasing adoption of public cloud services, and the rising use of cloud-based solutions to avoid the upfront costs associated with purchasing and managing dedicated encryption hardware or software.

The IT & telecom Segment to Dominate the Cloud Encryption Market in2024

Based on end user, the cloud encryption market is segmented into aerospace & defense, government, BFSI, IT & telecom, healthcare, retail, manufacturing, energy & utilities, and other end users. In 2024, the IT & telecom segment is expected to account for the largest share of over 26.0% of the cloud encryption market. The substantial market share of this segment is attributed to the growing adoption of advanced technologies, including cloud-based solutions, the rising use of the IaaS model to expand storage capacity, increasingly stringent data privacy regulations, and the surge in cyberattacks within the IT sector. For instance, in June 2024, Arqit Quantum Inc. (U.K.) introduced the Symmetric Key Agreement Platform, an encryption intelligence service designed to help organizations identify network risks and develop mitigation strategies to bolster security against both current and emerging cybersecurity threats.

However, the healthcare segment is expected to register the highest CAGR during the period. This segment's growth is driven by the expanding volume of patient data, the rise of telemedicine and remote care requirements, and the growing reliance on cloud-based services to access data from any location worldwide.

Geographical Analysis

North America to Dominate the Cloud Encryption Market in 2024

In 2024, North America is expected to account for the largest share of over 34.0% of the cloud encryption market. The market growth in North America is driven by increasing government initiatives promoting the adoption of cloud computing technologies, the presence of major technology firms in the region, and the rising use of cloud solutions to enhance security. In February 2022, Kigen Ltd (U.K.) partnered with ZARIOT (Luxembourg) and The @ Company (U.S.) to launch a solution utilizing end-to-end (E2E) encryption and SIM-based technologies to provide enhanced data privacy and control.

However, Asia-Pacific is poised to record the highest CAGR of over 32.0% during the forecast period. The region’s growth is driven by the growing adoption of IaaS among small and medium-sized enterprises to lower maintenance costs, the increasing proliferation of cloud computing services in China and Japan, rising smartphone and internet penetration, and growing government initiatives supporting the adoption of cloud-based solutions.

Cloud Encryption Market: Key Companies

The report offers a competitive analysis based on an extensive assessment of the leading players’ product portfolios, geographic presence, and key growth strategies adopted in the last three to four years. Some of the key players operating in the cloud encryption market are IBM Corporation (U.S.), Cisco Systems, Inc. (U.S.), Microsoft Corporation (U.S.), Sophos Ltd. (U.K.), Trend Micro Incorporated (Japan), Palo Alto Networks, Inc. (U.S.), Thales Group (France), Broadcom Inc. (U.S.), Atos SE (France), Hewlett Packard Enterprise Development LP (U.S.), Netskope Inc. (U.S.), Check Point Software Technologies Ltd. (Israel), Orca Security (Portland), Fortinet, Inc. (U.S.), and Dell Inc. (U.S.).

Cloud Encryption Industry Overview: Latest Developments from Key Industry Players

• In November 2023, Utimaco Management Services GmbH (Germany) introduced u.trust LAN Crypt Cloud, a file encryption-as-a-service management solution designed to safeguard sensitive and business-critical data from unauthorized access, regardless of whether it is stored on-premises or in the cloud.
• In October 2022, Cryptomathic A/S (Denmark) launched the Cryptomathic AWS BYOK Service, a cloud-based solution for Amazon Web Services, Inc. (U.S.) users. This service provides enterprise-class Bring Your Own Key (BYOK) encryption key management capabilities to enhance security.

Cloud Encryption Market Research Summary

Key questions answered in the cloud encryption market report: