The global hardware encryption market was valued at USD 271 million in 2021 and is expected to grow at a CAGR of 4.8% from 2022 to reach USD 357 million by 2027. The growth of this market is driven by factors such as compliance with data privacy security regulations and standards, increasing apprehension over data security and confidentiality, and development of digital content.
Drivers: Development of
digital content
With the emergence of
the smart city concept worldwide, the use of information and communications has
become more digitalized, leading to the enhancement of digital content. The
concept of smart cities includes smart transport, smart energy, smart water,
and smart healthcare. These smart cities use various IoT technologies such as
radio-frequency identification (RFID) sensors, cloud computing, and wireless
networks to gather and analyze information about environmental factors,
transportation, water supply, public safety, and hospitals to enhance the
quality of life.
Thus, with the emergence
of smart cities, there is a growing concern over data loss and the exchange of
secure information or storage. Digital content is expanding globally, and the
Internet era is evolving with the introduction and adoption of cloud computing,
IoT, big data analytics, and others. Also, the increasing adoption of
smartphones, e-cash, e-tailing, video surveillance, and digital marketing is
further adding to the expansion of digital content. Continuous technological
advancements and the introduction and application of IoT in the present
lifestyle have significantly enhanced digital content. Data has become the
currency of the new economy. With increasing flexibility becoming available in
the usage and storage of data, the need for secured storage and hardware
encryption to protect against cyberattacks, online spying, cyber espionage, and
other security-related threats is growing. Thus, the expansion and management
of digital content are driving the growth of the hardware encryption industry.
Restraints: Heavy
capital investments by stakeholders
Substantial capital
investments are required for the installation and maintenance of hardware-based
encryption technology. This type of encryption involves the installation of
encryption under HDDs to ensure a high level of protection. It comprises
installing a dedicated network platform to protect various storage systems,
desktops, laptops, and tablets.
It also involves the
installation of firmware and cryptographic processors into the devices, along
with the use of algorithms and standards and architectures. The total
installation cost of installing hardware encryption technology includes
licensing cost, annual maintenance cost, OPAL fees, pre-provisioning cost,
staging cost, the technical cost for a password reset, user idle time cost for
encryption, user excess operating cost, and technical cost for the assistance
of expert administration of encrypted drives. However, hardware-based
encryption is gaining traction with the growing concern over secure data
storage. Players in the hardware encryption market are launching economic
products, because of which the average cost of a single hardware-encrypted
device has begun declining. Technological innovations have also helped reduce
the average cost of installing hardware encryption. Also, with rapid
technological advancements, the impact of high capital investments is reducing
at a fast pace but needs to be reduced much more for it to no longer remain an
impediment to the growth of the market.
Opportunities:
Substantial development and growth of IoT in various industries
IoT has witnessed
significant technological innovation and commercialization in all fields. IoT
is used in day-to-day activities with its commercialized application in
agriculture, consumer electronics, transportation, military and defense,
telecommunications, medical, energy, finance, and aerospace. IoT also plays an
integral part in various emerging concepts, such as smart cities, digital
marketing, and others.
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IoT demands large-scale
management and protection of digital certificates and the underlying keys and
supports multiple public-key algorithms, including Elliptic Curve Crypto (ECC),
whose shorter key lengths and less intensive computational power are well
suited for constrained IoT devices, all supported by a well-designed public key
infrastructure (PKI). The accepted PKI best practice to secure the most
sensitive keys and business processes is to use an HSM.
IoT involves the
interaction between M2M and machine-to-humans, -objects, -environment, and
-infrastructure. IoT devices are used to monitor machinery, employees, and
environmental conditions in power stations, network gateways, avionics,
wireless base stations, and others. The data acquired helps analyze, control,
prevent risks, avoid economic losses, and assist in effective and efficient
decision-making.
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