Encryption Market Report: Strong Growth Propels Security & Surveillance Sector Forward Pubblico

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The global Encryption market is now firmly positioned at the heart of the ICT, Semiconductor & Electronics industry’s “Security & Surveillance” domain. As data volumes soar and cyber-threats grow in sophistication, encryption is no longer a mere add-on but a strategic necessity for enterprises, governments and critical infrastructure alike. In this report, we present up-to-date market size and forecast data, key drivers, trends, and strategic implications for stakeholders across hardware, software and services.

Market Size & Forecast

In 2024, the global data encryption market—covering encryption of data in transit, at rest and in use—was valued at approximately USD 39.83 billion. Data Bridge Market Research From that base, the market is forecast to reach roughly USD 132.40 billion by 2032, driven by a compound annual growth rate (CAGR) of 16.20% from 2025 to 2032. Data Bridge Market Research

A parallel segment, the encryption software market, stood at USD …

Market Size & Forecast

A parallel segment, the encryption software market, stood at USD 19.4 billion in 2025, and is projected to grow to USD 43.9 billion by 2030, representing a CAGR of 17.8%. Mordor Intelligence When viewed through the lens of the broader Security & Surveillance category, the demand for encryption technologies amplifies the value proposition of secure monitoring, transmission and storage systems.

Market Drivers & Opportunities Accelerated Digital Transformation

As organizations shift operations to cloud, edge computing and hybrid environments, the surface area for attacks expands. Encryption is fundamental to securing sensitive data across these domains. The migration from perimeter-based to data-centric security models is elevating encryption from a compliance item to a strategic enabler.

Regulatory and Compliance Imperatives

Stringent regulations such as GDPR in Europe, HIPAA in healthcare, PCI DSS in banking, and national cyber-security mandates are compelling enterprises to adopt encryption as part of comprehensive data protection strategies. The enforcement of zero-trust frameworks and migration to post-quantum cryptography further intensify demand. Mordor Intelligence +1

Growth in Security & Surveillance Infrastructure

In the “Security & Surveillance” space, end-users expect not only video and sensor data capture but also secure transmission, storage, and processing of that data. Encryption supports confidentiality and integrity across surveillance networks, including video feeds, access-control logs and IoT sensor streams—reinforcing the synergy between encryption and surveillance markets. For instance, the global security and surveillance equipment market is projected to expand from USD 342,349.74 million in 2024 to USD 646,202.81 million by 2031, at a CAGR of 9.5%. Reanin

Technological Innovation & Adoption

Emerging technologies—such as homomorphic encryption, quantum-resistant algorithms, hardware-root-of-trust and confidential computing—are reshaping the encryption value chain. Hardware acceleration, cloud-native key-management, and service-based encryption models are broadening addressable markets and enabling faster deployment cycles. Global Growth Insights +1

Segment Analysis By Component: Hardware, Software & Services

Encryption software remains a dominant share of the market (e.g., the encryption software market itself) but services are gaining traction as enterprises require support in key-management, migration and compliance. For example, in the network encryption market, services and solutions are forecast to grow at a 10.37% CAGR from 2024 to 2030. Mordor Intelligence

By Deployment: On-Premises vs Cloud

While on-premises deployments continue to hold large shares (for example 57.32% in the network encryption market in 2024) Mordor Intelligence cloud-based and hybrid encryption are accelerating fastest. The flexibility, scalability and rapid deployment advantages of cloud models are making them increasingly attractive for both enterprises and SMEs.

By Vertical: Surveillance, BFSI, Healthcare

Within “Security & Surveillance”, verticals such as government, defence, critical infrastructure and public safety are heavy encryption adopters. In broader encryption markets, BFSI leads, and healthcare is emerging fastest (e.g., 21% CAGR in encryption software healthcare vertical). Mordor Intelligence

By Geography: North America, Asia-Pacific

North America leads in revenue share due to mature cybersecurity frameworks and regulatory pressure. For example, in the data encryption market North America accounted for ~38.75% in 2024. Data Bridge Market Research Asia-Pacific, however, is projected to grow fastest, driven by digital transformation in India, China and Southeast Asia as well as regulatory momentum.

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Trends & Insights for Stakeholders Shift to Post-Quantum and Quantum-Safe Encryption

With quantum computing on the horizon, encryption vendors and end-users are proactively migrating to quantum-resistant algorithms and key-management architectures. This transition is accelerating the overall encryption market and raising average deal sizes.

Integration with Surveillance & IoT Systems

Encryption is increasingly embedded within surveillance ecosystems—camera networks, video analytics, cloud-based storage and edge computing. Secure video and data transport is now a core expectation in modern surveillance solutions rather than an optional feature.

Managed Encryption Services and Encryption-as-a-Service

Smaller organisations and those deploying distributed systems favour managed encryption services, key-management platforms and subscription-based models. This significantly lowers the barrier to entry and expands the addressable market beyond large enterprises.

Market Consolidation and Vendor Differentiation

As demand grows and technologies evolve, encryption vendors are moving toward integrated platforms (combining hardware acceleration, software controls, and managed services). Acquisition activity in the security stack is rising, creating consolidation opportunities and competitive differentiation.

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Strategic Implications & Recommendations For Technology Vendors

Focus on surveillance-centric encryption capabilities: Embed encryption into video, sensor and edge-compute modules to align with the Security & Surveillance ecosystem.

Build quantum-safe roadmap: Position services and solutions around algorithm migration, hardware-agnostic key-management and compliance assurances.

Leverage cloud-native models: Offer encryption as a service or integrate with managed-security offerings to target SMEs and distributed deployments.

For End-Users / Buyers

Adopt encryption holistically: Encryption should be part of data-centric security strategy—not just perimeter defence—in modern surveillance and IoT environments.

Plan for key-management maturity: Deployment of encryption without robust key life-cycle management exposes organisations to operational risk and audit failures.

Evaluate vendor ecosystems: Seek vendor solutions that support hardware/software integration, managed services, cloud/hybrid deployment and meet emerging compliance demands.

For Investors / Market Strategists

Prioritise high-growth segments: Encryption software, services and cloud-based deployments present faster growth than legacy on-premises hardware.

Monitor regional growth hotspots: Asia-Pacific offers high-growth potential driven by infrastructure build-out, digitisation and regulation.

Track technology disruption: Solutions leveraging confidential computing, homomorphic encryption, and quantum-resistance are likely to drive next-wave growth and premium valuations. Related Report

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