Optical Encryption Market size is poised to surpass USD 11 billion by the end of 2035, growing at a CAGR of 9% during the forecast period, i.e., 2023-2035. In the year 2022, the industry size of optical encryption was over USD 3.5 billion. The growth of the market is being attributed to the rising need for cyber security among businesses to control the impacts of cyber-attacks. 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.
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. In addition to these, the factors that are expected to boost the growth of the global optical encryption market includes the increasing adoption of cloud-based services, the growing use of big data analytics, and the need for secure communication and storage of sensitive data in industries such as healthcare, financial services, and defense.
Growth Drivers
Challenges
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Base Year |
2022 |
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Forecast Year |
2023-2035 |
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CAGR |
~9% |
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Base Year Market Size (2022) |
~ USD 3.5 Billion |
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Forecast Year Market Size (2035) |
~ USD 11.0 Billion |
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Regional Scope |
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End-user (BFSI, Healthcare, Data Centers, Energy, Telecom, IT)
The global optical encryption market is segmented and analyzed for demand and supply by end user into BFSI, healthcare, data centers, energy, telecom and IT, and others. Out of these segments, the BFSI (Banking, Financial Services, and Insurance) segment is expected to garner the largest market share by then end of 2035. Owing to the very sensitive nature of the data they manage, the BFSI industry is one of the main end-users of optical encryption technologies. Optical encryption systems offer a high degree of safety for financial transactions and personal information, making them appealing to the BFSI sector. For instance, the banking sector generated over 350 Billion USD in revenue in 2022. Moreover, owing to the rising volume of sensitive patient data gathered and kept, the healthcare industry is another important end-user of optical encryption technology. Optical encryption protects patient privacy and prevents data breaches by providing a safe mechanism to transmit and retain this data.
Data Rate (<10G, 10G-40G, 40G-100G, >100g)
The global optical encryption market is also segmented and analyzed for demand and supply by data rate into <10G, 10G-40G, 40G-100G, and >100G. Out of these segments the 40G – 100G segment is expected to garner the largest market share by the end of the forecast period and display significant growth opportunities. This segment comprises of optical encryption systems with data speeds ranging from 40 to 100 Gbps. This section is commonly seen in high-speed networks such as cloud services and telecommunication systems. With growing use of telecom and cloud services globally, this segment is expected to grow the fastest. For instance, in 2021, an average smartphone consumer around 12 GB data per month.
Our in-depth analysis of the global market includes the following segments:
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By Encryption Layer |
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By Data Rate |
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By End User |
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North American Market Forecast
The market share of optical encryption in North America, amongst the market in all the other regions, is projected to be the largest with a share of about ~33% by the end of 2035. The growth of the market can be attributed majorly to the presence of leading market players in the region. Moreover, increase in the demand for cyber security, followed by the global threat of cyber-attacks owing to huge adoption of cloud-based applications by network operators in this region further promotes optical encryption. Some of the top technological businesses and financial organizations in North America are key end-users of optical encryption technologies. The area has a significant need for safe and dependable data transfer, as well as stringent data protection legislation and compliance requirements. According to the estimated, United States accounts for most targeted country with more than 40 percent of the global cyberattacks. Moreover, the fraud cases in the country have increased by 70 percent since the year 2020.
APAC Market Statistics
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. These economies are spending extensively in technological infrastructure and digitalization. China and India are also investing in the development of sophisticated technologies like 5G and IoT, which are likely to stimulate demand for high-speed and secure data transmission solutions. Moreover, India is the second – largest telecom market in the world, with over 42% of the population using the internet.
Europe Market Forecast
The European optical encryption market, amongst the market in all the other regions, is projected to hold the third largest share during the forecast period. The rising volume of data created and transferred throughout the area, the growing use of cloud-based services, and the necessity for reliable and safe communication networks in industries such as healthcare, banking, and government are driving demand for optical encryption solutions in the region.
The German Federal Office for Information Security (BSI) has authorized Adva Network Security's flagship 10Gbit/s edge solution with ConnectGuard Ethernet encryption for the transport of confidential data.
Using Infinera Corporation’s ICE6, Hawiki Submarine Cable LP performed exuberantly with an efficiency of 4.5 b/s/Hz at over 15000 KMs of Subsea Cable Network.
Author Credits: Abhishek Verma, Hetal Singh
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