Encryption Software Market - Outlook (2015-19) for Financial Services explore@researchfox.com +1-408-469-4380 +91-80-6134-1500 www.researchfox.com 1
ResearchFox Consulting is an Indian market research and consulting firm based in Bangalore. We strive to provide our clients with research data and reports which they can trust and analyze. Insights gleaned from our detailed and comprehensive research reports helps our clients stay ahead of trends. ResearchFox serves clients with services from data collection to analysis and reports. ResearchFox has extensive sector expertise and its consultants are abreast of global trends and issues across industries. Our areas of expertise include Manufacturing, IT, FMCG, Healthcare, Automotive, Government Sector and NGO, BFSI and Retail. Disclaimer : This report is furnished to the recipient for information purposes only. Each recipient should conduct their own investigation and analysis of any such information contained in this report. No recipient is entitled to rely on the work of ResearchFox Consulting Pvt.Ltd. contained in this report for any purpose. ResearchFox Consulting Pvt. Ltd. makes no representations or warranties regarding the accuracy or completeness of such information and expressly disclaims any and all liabilities based on such information or on omissions therefrom. The recipient must not reproduce, disclose or distribute the information contained herein without the express prior written consent of ResearchFox Consulting Pvt.Ltd. Copyright 2015. ResearchFox Consulting Private Limited 2
Table of Contents 1. Introduction 1.1. Report Description 1.2. Objective 1.3. Scope of the Research 1.4. Regions Covered 1.5. Key Takeaways 1.6. Key Stakeholders 1.7. Key Terminologies 1.8. List of Abbreviations 2. Executive Summary 2.1. Executive Overview 3. Research and Forecasting 3.1. Research Methodology 3.2. Forecasting Methodology 4. Industry Landscape 4.1. Market Size and Growth 4.2. Competitive Landscape 4.3. Market Share 4.4. Company Classification 4.5. Region Outlook 4.6. Market Metrics 4.7. Porter's Five Forces Model 4.8. Key Drivers Analysis 4.9. Key Constraints Analysis 4.10. Key Opportunities Identified 4.11. Key Challenges Identified 5. Market Segmentation 5.1. Industry 5.1.1. Financial Services 5.1.1.1. Market Size and Forecasting 5.1.1.2. Key Drivers Analysis 5.1.1.3. Key Constraints Analysis 5.1.1.4. Key Opportunities Identified 5.1.1.5. Key Challenges Identified 5.1.1.6. Sub Segments 5.1.1.6.1. Region : North America 5.1.1.6.2. Region : Europe 5.1.1.6.3. Region : APAC 5.1.1.6.4. Region : South America 5.1.1.6.5. Region : RoW 3
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1. Introduction 1.1. Report Description Various government and private companies across the globe are transforming themselves and becoming web focused so as to bring in more transparency and agility in processes and to give their customers better customer experience. While this initiative is bringing these companies closer to their customers, it is also taking them much nearer to the data theft related risks. Many of the cyber-attacks that have happened in the past were primarily carried out to steal crucial company and customer related information. The last year's Sony Pictures hack and that on the US State Department and the Penn State Hospital breach, all point to the fact that the miscreants now target businesses irrespective of their nature of business. More surprisingly, experts believe that all the above said attacks could have be averted if there was a strong and efficient encryption software in place. However, the business fraternity is now becoming wiser across the globe and is implementing suitable and strong encryption software. But, at the same time, the demand for more sophisticated encryption software is also increasing due to growing complexities of attacks. The market for Encryption Software is catching up and this report provides deep insights on how the market is expected to fare in the next five years. It also presents interpretative and easy-to-understand facts on how the current Encryption Software market is segmented based on the deployment type, the major verticals that have been implementing these, the application of these encryption solutions and based on the geographic regions. 1.2. Objective 1. To understand the Encryption Software market across the globe by addressing the challenges faced by the industry with regards to the adoption of Encryption Software. 2. To estimate the size of present global Encryption Software market and to forecast its future values. 1.3. Scope of the Research Scope of the research was limited to understanding the market share across segments. Key drivers, constraints and challenges along with their impact on various business functions in both short term and long term were addressed. Segmentations and forecasting were done based on: 1. End-User 2. Verticals 3. Deployment Type (on-premise vs cloud) 4. Application (Data-at-Rest vs Data-at-Transit) 5. Region Based Segmentation 1.4. Regions Covered 1. North America (US, Canada and Mexico and other countries) 2. Europe (United Kingdom, France, Germany, Italy, Spain and other countries) 3. 5
APAC (Australia, India, China, Japan, Singapore and others) 4. South America (Brazil, Argentina and others) 5. RoW (Middle East and Africa, South America, Russia and other countries) 1.5. Key Takeaways 1. North America contributes the most to the overall revenue of encryption software and is also expected to grow at a higher growth rate compared to other regions. 2. The market for Enterprise Mobile Security was USD 1818.6 million in 2014 and is expected to grow at a CAGR of close to 19.80% till 2019. 3. Usage of?data-at-rest? encryption solution generates more revenue that the?data-at-transit? solutions which is still in its initial stages of adoption. 4. Similarly, deployment wise, traditional on-premise encryption solutions are widely adopted solutions whereas cloud based encryption is largely restricted mainly to countries like the USA, Canada, UK and other developed nations. 5. Enterprise level businesses still remain the major consumers of these solutions and even the small and medium level businesses are also catching up in the race of adoption. 6. Financial institutions, Public sector companies including defense and Healthcare companies have emerged as the major users. This is because, these companies deal with large amount of classified and crucial data whose security they cannot afford to compromise with. 1.6. Key Stakeholders 1. Encryption softwar solution and product providers: Encryption software and solution providers will be able to gauge the market more accurately as this will assist them in better decision making. Also, the product developers would be able to develop products according to the requirement of the customers. 2. End-User companies: Report will provide the end-users, a more clear picture on the solution provider demographics so that they can choose among the best. 3. Global Investors: Those investors who look to fund new and budding Encryption software provider startups will get clear picture about the market and its trends. 4. Industry Watchers: Industry and trend watchers are always referred to as trusted advisors who follow markets. The report would add to their knowledge repository, creating value for their know-how. 6
1.7. Key Terminologies 1. APAC: Mainly includes Australia, India, China, Japan, Singapore and other nations in the region 2. Europe: Mainly includes United Kingdom, France, Germany, Spain and other European nations 3. MEA: Mainly includes Israel, South Africa, UAE and other nations 4. North America: Mainly includes United States of America, Canada, Mexico and other North American nations 5. South America: Mainly includes Brazil and Argentina and other South American nations 6. Enterprise: Companies with an employee headcount above 1001. 7. Mid-Size: Companies with an employee headcount between 501? 1000. 8. Small-Business: Companies with an employee up to 500. 9. BYOD (Bring Your Own Device): Bring Your Own Device refers to the policy of permitting employees to bring their own devices, such as laptops, smart phones and tablets to their workplace. 7
1.8. List of Abbreviations 1. BYOD: Bring-Your-Own-Device 2. USD: United States Dollar 3. CAGR: Compound Annual Growth Rate 4. USA: United States of America 5. APAC: Asia-Pacific 6. IT: Information Technology 7. RoW: Rest of the World 8. UK: United Kingdom 9. GDP: Gross Domestic Product 10. BRICS: Brazil, Russia, India, China and South Africa 11. UAE: United Arab Emirates 12. R&D: Research and Development 13. POS: Point-of-Sale 14. DDoS: Distributed-Denial-of-Service 15. SMB: Small and Medium Businesses 16. RoI: Return on Investment 17. NSA: National Security Agency 18. SSL: Secure Sockets Layer 19. SaaS: Software-as-a-Service 8
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2. Executive Summary 2.1. Executive Overview Currently, the state of cyber-crime doesn?t look good. Crimes have increased across all regions of the world; be it the developed nations like USA, UK and Canada or the emerging locations in Nigeria, Brazil, Russia, China and Vietnam. Studies conducted in 2015 suggest that data worth USD 300 million has been stolen directly from banks which is considered the most secure place on earth. This creates an even more sense of urgency thereby requiring the need for a proper security software. The industry defines the overall cyber security threats under the following categories: Point-of-Sale (POS) Intrusion, Web Application Attacks, Insider Misuse, Physical Theft and Loss, Errors, Crimeware, Payment Card Skimmers, Cyber-Espionage and Distributed-Denial-of-Service (DDoS). Each of these threats could be restricted or controlled by proper security means. Encryption software is one among them. U.S. President Barack Obama in one of his interviews while visiting the Silicon Valley in February 2015 said that he is a strong believer of strong encryption. Earlier, cyber-security was used to protect critical documents and communications but the need of the hour has been encrypting every piece of corporate and application data. High density security threats like data breaches and malware lurk around every nuke and corner of the internet space. The attacks on multinational corporations like Sony has created further attention to the cyber-security development. This massive cyber-security awareness has ignited the growth of the encryption market. However, it?s not?hunky-dory? for the encryption market. Customers are still very skeptical in adopting any kind of encryption technology. They believe that it is not only a costly affair but also decreases the IT system performance. This is ideally not the case in this era of modern technology. Use of encryption technology do not reduce system speed, rather provides better computing. The?Global Encryption Software Market? Outlook (2015-2019)? report suggests that the overall market was valued at USD 1818.6 million in 2014 and is expected to grow at CAGR 19.80% till 2019. Following are the reasons for the growth of Encryption Software market globally: 1. High increase in rate of cyber-crime across developed and emerging regions 2. Need for data protection by adopting encryption software 3. Increased mobility and telecommuting among employees 4. Evolution of open source encryption programming The North American market is expected to grow the fastest and emerging countries in Middle-east & Africa the slowest. USA has seen one among the largest number cyber-attacks, data theft and hacking in the recent past. This has helped the growth of the encryption software market in USA. In terms of market share among size of companies, Enterprise companies are the largest users for this security technology. Given the volume and sensitiveness to data, this set of companies often remain the primary target for cyber-miscreants. Small business like e-commerce companies have started to opt encryption software a security measure. 10
But the cost factor has always been an area of concern for most of the customers. The price of encryption software is generally high, thereby making customers dicey on this. However, with the emergence of cloud based encryption software, the acceptance has increased. We believe that rate of growth for cloud deployment model would surpass that of on-premise software creating a larger market for the security software. The most prominent companies in this area of expertise include Check Point Software Technologies, McAfee, Microsoft, Safenet, Sophos and Symantec to name a few. Other emerging players include Becrypt, CE Infosys, Entrust Tech, Eset, Jetico, Winmagic, etc. 11
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3.1. Research Methodology Base Year: 2014 Forecasting Period: 2015-2019 3.1.1. Sampling The leading suppliers of each end-user product categories that were chosen to provide a larger representative sample. Purposive unit sampling was adopted for every service segment such as verticals, regions, end-users and others. This was resorted to, in order to elicit the appropriate inputs with regard to the qualitative growth aspects of the market. 3.1.2. Secondary Research The research methodology that was carried out was desk research through various journals, association reports, and in house database to build a knowledge base on various market service segments, product categories and industry trends. Various fact based data was analyzed. Some of the sources included: a. ResearchFox Knowledge Base: Previous data on the market has been put through a rigorous and comprehensive analysis to analyze the current state. b. Desk Research: Industry reports, annual reports, press releases, webinars, journals and publication, independent rating agencies and government statistics. 3.1.3. Primary Research Primary interviews were conducted among various stakeholders: Product and service companies Members of associations and alliances Subject Matter Experts and Evangelists Consultants and Strategists 13
3.1.4. Industry Information It was essential to understand the current industry landscape, market dynamics, security ecosystem and competitor metrics. To estimate the global market, Chief Experience Officers (CXOs), Marketing Heads, Sales Managers and product stakeholders were interviewed. 3.1.5. Technical Information In addition to the interviews with leading participants for industry-related information, ResearchFox conducted interviews with Research and Development (R&D) and Design and Development teams to understand the current usage of the products by service type and also to find out the emerging trends. Finally, interviews with suppliers were conducted to cross check the validity of information and also to understand the emerging trends in the end-user segment. The detailed methodology for primary research is outlined below. 3.1.6. Primary Interview Questionnaire Design ResearchFox developed a detailed questionnaire, which was used by the analysts as a guide for their discussions. This process ensured the collection of all necessary data. The questionnaire was designed to elicit unbiased industry level data (market size, production, sales, and others), that had check points (questions such as company level information and their position in the industry acted as check points) to ensure accuracy of the data. The questionnaire included the following sections: 1. Industry level information 2. Characteristics and Dynamics 3. Company-specific information 4. Market segmentation data 3.1.7. Interview Questionnaire Test and Validation Following the design of the questionnaire, ResearchFox carried out some initial interviews to verify that the appropriate market and technology data was generated. After the final design of the questionnaire, ResearchFox began full scale primary research. Specific companies targeted for primary research interviews were selected based upon market participation. Higher was the entity's profile, more attractive was the entity. 14
3.1.8. Interview Process As participants respond in the course of an interview, ResearchFox analysts are trained to move from lower priority and/ or sensitive topics to increasingly key and/or sensitive topics in response to the interviewee's behavior. This responsive and reflective interview process, combined with the analysts' ability to discuss the industry and technical issues in an open and sharing environment, allows ResearchFox to probe for key data, operations, and competitive information. Multiple contacts within a single organization and with an individual are often planned and/or staged in order to optimize and complete the information gathering process. 3.1.9. Research Validation At a point, when 20 percent of the research interviews and/or data collection had been completed, ResearchFox consultants evaluated the preliminary findings to assure that up-to-date results are in line with project objectives. The analyst team analyzed the information from the interviews and information was validated through a combination of the following validation techniques: Cross checking with other primary data and previously developed in-house research Review of secondary information, such as trade journals, annual reports and industry directories 15
3.2. Forecasting Methodology 3.2.1. Step-by-Step Methodology for Market Estimation and Forecasting Market Estimation and Forecast Methodology, 2015 Step 1 Method Understand the market mechanism for the market through structured, systematic and theoretically established norms of analyzing, designing, introducing and quality assurance of the market estimation 2 Measuring the various market drivers, constraints, opportunities and challenges at regular intervals of time 3 Integrate expert-opinion of discussions in consultation with the ResearchFox Analyst team 4 Market estimation and forecast calculation 5 Delphi method and Causal Analysis used as and when required 6 Rigorous quality check with heads of Research Team, Subject Matter Experts and Consultants before final publication Source: ResearchFox Significance and Importance of the Market Forecast, 2015 Sr. No. Significance and Importance 1 Helps revisit on the company's R&D investments 2 Keeps the Sales and Marketing team posted on the market prospects 3 Strategize investment and expansion plans 4 Improve business planning 5 Helps create business aims and set sales figures within the company 6 Aware of the current market competition 7 Support plans for Merger and Acquisition (M&A) Source: ResearchFox 16
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