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Optical Encryption Market Segmentation By Encryption Layer (OTN/Layer 1, MACsec/Layer 2 and IPsec/Layer 3); By Data Rate (<10G, 10G-40G, 40G-100G and >100G) and By End User (BFSI, Healthcare, Data Centers, Energy, Telecom and IT and Others) – Global Demand Analysis & Opportunity Outlook 2028

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Extensive insights into the Growth of Optical Encryption Market amidst COVID-19

Before we witness the stabilization of economic growth in Europe and North America, Asia Pacific is estimated to bounce back progressively with countries such as China, India, South Korea and Japan witnessing more opportunities to recover from the losses sustained during COVID-19.

Being the biggest market in Eastern Europe, Russia is estimated to take the lowest hit, offering a sigh of relief to the businesses operating in the country. Whereas, GCC is estimated to observe low investments due to the sliding prices of crude oil.

We evaluate the strategies and commitment of the Giant Players in the market towards creating products and services that customers value and rely on.

In an attempt to control and eliminate the surge of coronavirus cases and meet the demand for required medical devices along with providing efficient medical services, there is a drastic shift of investments from authoritative bodies towards the healthcare sector. Where the aftermath of this pandemic may take years to be measured, Research Nester estimates notable expansion of e-health, gaming, and media and entertainment industries till the whole situation is contained and the plan of action for the recovery process is determined. There is an estimated probability of the growth in businesses going back a year if the condition is controlled in the next 2-3 months.                                                         Request Insights

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  • May 2018: ADVA announced that its optical encryption technology-ConnectGuard™ has been deployed by several major Swedish financial enterprises for robust security and safeguarding data.
  • December 2018: Infinera, a company known to provide intelligent transport networks, announced that it has made available the new layer 1 Optical Transport Network (OTN) data encryption capabilities on its universal switching platform, mTera®. This new approach is anticipated to secure the communications networks and protect customer data from the global threat of cybercrime.

Introduction to Optical Encryption

Optical encryption is a way of securing in-flight data, which is in transmission in the transportation layer of the network as it is carried over optical waves across fiber-optic cables. It doesn’t come at the cost of fiber bandwidth owing to no requirement of underlying payload and no extension of optical transport network frame. This, as a result, becomes the most important method of encrypting the data optically for the next generation and core optical transport layer globally. The ongoing security threats, including headlines about fiber cable intrusions bolsters the need for robust in-flight optical encryption.

Market Size and Forecast

Emerging need of regulatory compliances, growing concern over privacy of data and rising incidents of cyber frauds, as well as high data center deployments are some of the significant factors boosting the market growth. The optical encryption market is anticipated to record a significant CAGR over the forecast period, i.e., 2020-2028. The market is segmented by encryption layer into OTN/layer 1, MACsec/layer 2, and IPsec/layer 3. Among these segments, the segment for IPsec/layer 3 is anticipated to hold the leading share in the market on account of large-scale IPsec/layer 3 utilization in enterprises, internet-based virtual private networks and government networks. Further, it offers seamless security to application, transport layers and networks of all sizes.

Growth Drivers

Rising Concerns Towards Privacy for Data Security to Boost the Market Growth

With the continuing expansion of network connectivity through mobile devices, cloud data centers and internet of things, the cases of data breach and confidential information leakage have gone to its peak. This has resulted to increasing threats of cyber-attacks and fiber cable intrusion. Owing to the growing requirement of cyber security among the enterprises to control the effects of cyber-attacks, the demand for optical encryption is estimated to increase. According to the UK government, over four in ten of all UK businesses suffers at least one breach or cyberattack in 12 months. Additionally, the market growth is attributed to the ability of optical encryption in protecting in-flight data and guarding against network intrusions. These factors are anticipated to significantly expand the optical encryption market.

Growing Demand for Cloud Services and Data Centers to Drive the Market Growth

There is a global ever-increasing penetration of cloud services and data centers deployment in recent years. Optical encryption provides first-level and simple-to-implement defense for communications between data centers as well as simplifies the network architecture. Furthermore, rapidly increasing volumes of data have led organizations to follow various data security laws and regulatory compliance which are expected to fuel the market growth. On the back of these, the optical encryption market is predicted to grow over the forecast period. CLICK TO DOWNLOAD SAMPLE REPORT


Lack of Network Stability and Simplicity to Hamper the Market Growth

Despite the advancement in-flight data encryption solutions, there is a possibility of unstable network infrastructure and limited network-oriented approach. Also, there is incremented complexity associated with managing the network. This is estimated to hinder the growth of optical encryption market in the future.

Market Segmentation

Our in-depth analysis of the optical encryption market includes the following segments:

By Encryption Layer

  • OTN/Layer 1
  • MACsec/Layer 2
  • IPsec/Layer 3

By Data Rate

  • <10G
  • 10G-40G
  • 40G-100G
  • >100G

By End User

  • BFSI
  • Healthcare
  • Data Centers
  • Energy
  • Telecom and IT
  • Others

By Region

On the basis of regional analysis, the optical encryption market is segmented into five major regions including North America, Europe, Asia Pacific, Latin America and Middle East & Africa region.

The market for optical encryption in North America is anticipated to hold the largest share in the market on account of presence of leading market players in the region which provides and market optical encryption. Moreover, increase in global threat of cyber-attacks owing to huge adoption of cloud-based applications by network operators in this region further promotes optical encryption. The market in Asia Pacific region is predicted to grow at the highest rate during the forecast period on account of optical transport network data encryption capabilities in countries such as China, South Korea and India along with the increase in usage of smartphones, laptops, televisions, and several other data generating devices.

The optical encryption market is further classified on the basis of region as follows:

  • North America (U.S. & Canada) Market size, Y-O-Y growth & Opportunity Analysis
  • Latin America (Brazil, Mexico, Argentina, Rest of Latin America) Market size, Y-O-Y growth & Opportunity Analysis
  • Europe (U.K., Germany, France, Italy, Spain, Hungary, Belgium, Netherlands & Luxembourg, NORDIC, Poland, Turkey, Russia, Rest of Europe) Market size, Y-O-Y growth & Opportunity Analysis
  • Asia-Pacific (China, India, Japan, South Korea, Indonesia, Malaysia, Australia, New Zealand, Rest of Asia-Pacific) Market size, Y-O-Y growth & Opportunity Analysis.
  • Middle East and Africa (Israel, GCC (Saudi Arabia, UAE, Bahrain, Kuwait, Qatar, Oman), North Africa, South Africa, Rest of Middle East and Africa) Market size, Y-O-Y growth & Opportunity Analysis

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