Market Highlights
The homomorphic encryption market is estimated to reach a valuation of USD 268.92 million by 2027, growing at 8.58% CAGR during the assessment period (2019 to 2027).
The homomorphic encryption (HE) market is very dynamic. The market is driven by the rising demand for secured data transmission, growing investment in cloud-based industries, and growing e-governance initiatives. Furthermore, the high implementation of homomorphic encryption in the banking, finance, and insurance sectors boost market growth.
COVID-19 Analysis
COVID-19 has brought up the debate on balancing privacy and public interest to the fore, and homomorphic encryption could help strike the right balance. Coronavirus crises have brought up concerns over public interest and the basic human right to privacy. In order to manage the global epidemic, it becomes important to manage contact tracing and statistical data analysis activities and tools to help identify patterns that could lead to cures or prevention measures.
As expected, this has led to mixed emotions of relief and worry, relief from experts being able to collect and process data to control the virus, and worry that the apps could be used for surveillance or sensitive personal data getting revealed. Homomorphic encryption technology is proving to be useful in developing apps that can offer an acceptable data protection level. Recent initiatives led to fully homomorphic encryption (FHE) becoming 1000 times faster than before.
Market Dynamics
Drivers
Homomorphic Encryption Solves Data Protection Vulnerability
Homomorphic encryption solves vulnerability inherent in all other approaches to data protection. The HE technology helps to protect the integrity of data at rest and data in transit. The homomorphic encryption technology is primarily used to secure data stored in the cloud and enable data analytics in regulated industries. Rapid growth in banking and finance, and insurance sectors that need to handle a lot of personally identifiable information (PII) and financial data information that needs to be encrypted drives the market growth.
The homomorphic encryption market size is also boosted by the expanding healthcare, government, and manufacturing industries. These industries benefit from the rise in disposable income, surging healthcare spending, and government initiatives to protect the data.
Opportunities
PE technology would Improve Election Security and Transparency
The proliferation of hybrid cloud is likely to bolster sensitive data required to be stored, shared, and analyzed across systems and parties, exposing it to varying security controls and risks. Current encryption techniques provide data protected during storage and in-transit; however, the data needs to be decrypted before being processed or analyzed. This increases the chances of data getting more vulnerable to theft or exposure, creating a window of opportunity to increase the homomorphic encryption market demand.
There are several researches going on to see how homomorphic encryption technology can be used to improve democratic elections' security and transparency. For example, the partial encryption scheme allows users to add up various values in an unbiased way while keeping their values private can be used for voting-related applications. This technology would protect data from manipulation and allow it to be independently verified by authorized third parties.
Restraints
Lack of Upgrade of Technology to Restrain Market Growth
Despite the positive growth prospect, the market growth is hindered by factors such as lack of up-gradation and complexity.
Challenges
Technical Complexities to Challenge Players
The complexity of the encryption method could be a major challenge for the players.
Cumulative Growth Analysis
PE Market Share to Expand Rapidly
Rising usages of smartphones and mobility solutions are projected to continue to support the homomorphic encryption market growth. Mobile cloud computing offers an infrastructure where both data storage and data computing happens outside the device. Additionally, increasing mobile cloud applications and digital transmission would foster the homomorphic encryption market share.
Increasing mobile phone use for bill payments, shopping, and mobile banking propel the market growth, raising security concerns for the personal information that gets shared with the third party. Resultantly, Internet users are sharing a lot of information through a third-party forum. Hence, data security becomes crucial, which is boosting the homomorphic encryption market size.
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Segmentation:
The homomorphic encryption market is segmented based on type, applications, and regions. The type segment is further sub-segmented into fully homomorphic encryption, partial homomorphic encryption, additive homomorphic encryption, and multiplicative homomorphic encryption.
The application segment is segregated into government, banking & finance, healthcare, industrial, and others. By region, the market is bifurcated into Americas (US, Canada, Mexico, Rest-of-North America), Europe (Germany, UK, France, Italy, and Rest-of-Europe), Asia Pacific (China, Japan, India, South Korea, and Rest-of-the-APAC), and Rest-of-the-World.
Regional Analysis
North America to Maintain its Winning Streak
North America has remained the market leader since 2018 and could continue to maintain its winning streak throughout the assessment period. Factors such as the increasing number of small- and medium-scale enterprises and increasing uses of the homomorphic encryption technology drive the market growth. Besides, stable growth rate in the healthcare sector and increasing numbers of advanced medical facilities influence the homomorphic encryption market size.
Europe Holds Second Highest Share in Global Market
Europe holds the second biggest share in the global homomorphic encryption market. Factors such as the burgeoning banking & finance industries and increasing HE technology uses, push the homomorphic encryption market growth. Additionally, the extensive pool of PE technology providers and considerable healthcare spending in the region induce market expansion. Besides, the escalating homomorphic encryption market demand and increasing investments by the private sector foster considerable growth.
APAC Homomorphic Encryption Market Demonstrates Promising Growth
Asia Pacific is an emerging market for homomorphic encryption technology. Increasing demand for homomorphic encryption in cloud security influences the regional market growth. Moreover, the high adoption of HE solutions due to the rapid industrialization creates substantial opportunities for the homomorphic encryption industry in the region. Countries such as India, Australia, China, and Japan majorly contribute to the homomorphic encryption market share in the region.
Competitive Landscape
Players Focus on Product Development & Expansion Plans
The worldwide homomorphic encryption market appears extremely fragmented, considering the presence of well-established manufacturers and distributors. They seek opportunities to integrate across the extensive value chain while focusing on R&D investments, production facility expansion, and M&A activities to gain impetus. New homomorphic encryption manufacturers enter the market with aggressive pricing to undercut the established providers and gain footholds in international markets.
List of Key Companies
Microsoft (U.S.), Oracle Corporation (U.S.), Gemalto (Netherlands), Galois Inc (U.S.), IBM Corporation (U.S.), Netskope (U.S.), LifeNome Inc (U.S.), CryptoExperts (France), and Enveil, Inc (U.S.), are some of the affluent contenders holding sizeable homomorphic encryption market share.
Duality Technologies is one of the leading Privacy Enhancing Technology (PET) providers, setting a new standard for privacy-preserving data collaboration. Its leading PET platform Duality SecurePlus™ combines advanced homomorphic encryption and data science to enable organizations to derive insights without getting their sensitive data exposed. Duality's PET products are used by companies across regulated industries, including financial services, telecommunications, healthcare, and more. The company was recently listed on Fast Company's 2020 Most Innovative Companies List in the Data Science category.
Recent Developments
December 22, 2020 – Samsung SDS announced winning the 2020 iDASH Secure Genome Analysis Competition, getting recognized for its homomorphic encryption technology. Samsung SDS's HE technology can analyze and process encrypted data without needing to decrypt it first, making homomorphic encryption a practical approach to the protection of sensitive personal information.
December 18, 2020 – IBM Security launched a new service that allows companies to experiment with fully homomorphic encryption (FHE), an emerging technology designed to allow data to remain encrypted even while being processed or analyzed in the cloud or third-party environments.
November 18, 2020 – Duality Technologies, a leading Privacy-Enhancing Technologies (PETs) provider, launched the first privacy-enhanced statistical analysis solution based on homomorphic encryption named Duality SecurePlus® Statistics. Such a secure collaborative analysis of enriched data can unlock new insights while simultaneously preserving privacy and ensuring compliance with growing data privacy regulations.
March 04, 2020 – The Defense Advanced Research Projects Agency (DARPA) announced that it is pursuing an effort to develop hardware that allows for computing on encrypted data with continuous protection. DARPA said that its Data Protection in Virtual Environments or DRIVE program aims to accelerate computations done with fully homomorphic encryption (FHE), an approach that protects encrypted data while still allowing for processing.
February 18, 2020 – Enveil, a US-based pioneering data security company, announced raising USD 10 million for enterprise-scale homomorphic encryption. The company is also looking to enable secure data sharing and collaboration or enable secure data monetization because of its privacy-preserving and privacy enabling capability.
Report Overview
The report features unique and relevant factors expected to significantly impact the homomorphic encryption industry during the forecast period. The detailed and considerable amount of information in the report would help industry players understanding the market better. The MRFR report elaborates on the historical and current trends boosting the homomorphic encryption market growth.
Besides, the Analysis of COVID-19 impact on the homomorphic encryption market is also included in the report. Regional assessment explained in this report unlocks a plethora of untapped opportunities in regional and domestic market places. Detailed company profiling in the region enables users to evaluate company shares analysis, emerging product lines, the scope of the product in new markets, pricing strategies, innovation possibilities, and much more.
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Global Homomorphic Encryption Market: By Type (Fully, Additive, Partial and Multiplicative), By Application (Banking and Finance, Healthcare, Government, Industrial and others) - Forecast till 2027
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