Confidential Computing Market

Confidential Computing Market Outlook

The global Confidential Computing market was valued at USD 2,796.9 Million in 2022 and is expected to reach USD 59,041.3 Million in 2031, expanding at a CAGR of 41.2% during the forecast period. Confidential computing is a cloud computing solution that isolates sensitive data while processing in a protected CPU enclave. It operates by encrypting sensitive data and storing it in a secured CPU zone that no other computer code can access.

Only approved code has access to the content of the protected CPU region, which includes processed data and the code used to process it. As a result, no other software, including the cloud service provider, can access the protected area contents. The major purpose of confidential computing is to give executives with more certainty that their data in the cloud is secure and confidential. It closes the remaining data security gap by securing data in use – that is, during processing or execution.

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Macroeconomic Factors

Government Initiatives

Governments across various countries have taken initiatives to strengthen the future of data security. For instance, the Ministry of Electronics and Information Technology (MeitY) launched the Cyber Surakshit Bharat initiative with the goal of developing a strong data security ecosystem in India. This aligns with the Government's vision for a 'Digital India'. The National E-Government Division (NeGD) sponsored this program.

India has established the National Critical Information Infrastructure Protection Center, as a part of Indian Government initiatives on cybersecurity, to safeguard critical information relevant to national security, economic development, and public health. Information Technology (IT) Act, 2000, Section 70A, amended this provision. Data security exercises are conducted by this organization to make sure the Government and critical sectors are prepared in terms of any data breach.

R&D Activities

Confidential computing is a rapidly evolving field with significant R&D activities. With the major initiatives identified for securing cyberspace, with a focus on promoting, demonstrating, proof of concept, and the establishment of test beds to improve indigenous skills and capabilities.

For Instance, Microsoft Azure Research, formerly the Confidential Computing team in Microsoft Research’s Cambridge Lab, is conducting pioneering research in the design of systems that guarantee strong security and privacy properties to cloud users. Their focus areas include secure distributed computing, privacy-preserving machine learning, secure hardware design, software security, and verified security and cryptography.

Also, Samsung Research is heavily invested in Confidential Computing. Samsung Research is investigating new application areas for secure computing on mobile and IoT devices. To enable these new applications, they are researching next-generation secure platform technologies. ISLET is a Samsung Research project that extends secure computing to user devices.

Technological Advancements

Technological advancements have played a significant role as a macroeconomic factor in shaping the Confidential Computing Market. As new hardware and software technologies emerge, Confidential computing solutions become more efficient, cost-effective, and secure. The development of additional hardware-based security features, improvements to software-based encryption and key management, and quicker performance for complicated computations will boost the utility of Confidential Computing.

Furthermore, the integration of Confidential computing with other technologies as blockchain and artificial intelligence (AI) is expected to further enhance the Confidential Computing growth. For Instance, With Confidential Computing solutions on Amazon Web Services (AWS), it provides a secure compute environment for low-level blockchain tasks. These solutions are further used for scaling blockchain account management without the use of a central key management system.

Confidential Computing Market Dynamics

Market Driver- Rising Cyber Intrusion Activities

Increasing number of cyber intrusion activities are driving the demand for Confidential Computing across the globe. According to the Accenture Cyber Investigations, Forensics & Response (CIFR) mid-year update, the number of cyber intrusion activities across the globe increased by 125% in the mid-year of 2021, as compared to the same period in 2020. This rapid increase in cyber intrusion activities is attributed to the rise in web shell activities by way of cybercrime incidents, including supply chain intrusions and targeted ransomware and extortion operations.

The adoption of Confidential Computing is increasing in various industries, as these industries are majorly affected due to intrusion activities. According to the study, five industries held over 60% of overall intrusion volume; these industries include Consumer Goods & Services (21%), Industrial (16%), Banking (10%), Travel & Hospitality (9%), and Insurance (8%).

Market Driver- Increasing Need for the Protection of Sensitive Data

The protection of sensitive data influences IT productivity positively and fuels the demand of the confidential computing. Confidential computing also plays a critical role in protecting data privacy. With confidential computing, organizations can ensure that their sensitive data remains private, even from the administrators of the underlying system. This is essential in industries such as healthcare, finance, and government, where data privacy is critical. Most sectors are using artificial intelligence/machine learning (AI/ML) to analyze data.

However, concerns about data privacy and sensitivity have hindered the deployment of AI/ML in the health and finance industries. Although this data must be protected from illegal access. Confidential computing allows to increase the utility of such data while keeping sensitive data secure and private.

Market Restraint- High Costs Associated with Confidential Computing

One of the major commercial barriers is the high cost of adopting and maintaining these systems. Implementation can be expensive, especially for smaller organizations or companies with limited resources. The cost of hardware, software, and specialized personnel is a significant adoption barrier.

Adopting confidential computing technologies is difficult for small and medium-sized businesses since they need large investments in hardware, software, and staff to ensure the security and privacy of data and computations. These technologies also require ongoing maintenance, which can add to the overall cost.  These solutions require specialized hardware, such as secure enclaves or dedicated processors, to ensure the security and privacy of data and computations. This hardware may necessitate additional infrastructure investments, such as data centers, and may be costly to purchase and operate. These factors are impeding market expansion.

Market Restraint- Challenges associated with Confidential Computing Technology

Confidential computing requires particular knowledge and abilities to develop and maintain, which creates a barrier to access for some firms and organizations, particularly smaller ones that have limited IT resources. There are various reasons for this, including the fact that the technology behind confidential computing is still relatively young and continually evolving. It needs experts’ knowledge of encryption, secure enclaves, and trusted execution environments, which may be insufficient in many businesses.

Confidential computing frequently relies on specialized hardware Component such as Trusted Execution Environment (TEE) or secure enclaves. Implementing and maintaining these hardware Component is a significant task for a new industry and requires specialized knowledge. There are fundamental operational challenges that limit the scalability of this approach.

Market Opportunity- Regulated Industries Requiring Heightened Awareness due to Data Exposure

Regulated businesses are increasingly amenable to exploring and experimenting with security-enhancing technologies such as confidential computing since regulators are increasing their pressure to improve data security and privacy. High exposure to private data, combined with rules such as the CCPA, Schrems II, GDPR, and HIPPA, ensures that BFSI and HLS organizations will be interested in confidential computers.

Furthermore, in the next years, technology-first FinTech, Insurtech, and HealthTech organizations are likely to raise awareness of confidential computing in BFSI and HLS. The hi-tech and retail/CPG verticals are anticipated to see increased awareness among less regulated companies. The high-tech and CPG industries, particularly telecom and consumer electronics firms, are projected to investigate secret computing across important IoT/edge and personal computing domains use cases to drive hyper-personalization.

Market Opportunity- Adoption of Cloud-based Confidential Computing Solutions among SMEs

SMEs are continuously looking for upgrading their infrastructure and applications by switching to cloud-based platforms, such as Software as a Service (SaaS) and Infrastructure as a Service (IaaS). Security administrators fuel the demand for cloud-based Confidential Computing solutions for SMEs to enhance performance, secure mobile & web apps, and protect crucial network infrastructures.

SMEs are focusing on using cloud computing platforms, as confidential computing solutions help in protecting individuals, devices, apps, and data by using cloud services that eliminate the need to install a ton of security hardware on-premises.

Market Opportunity- Growing Adoption of Artificial Intelligence (AI) in Confidential Computing

The adoption of artificial intelligence in global confidential computing is projected to create numerous opportunities for market expansion during the forecast period, by improving efficiency, enhancing user experience, and addressing evolving needs. Confidential AI is a new platform for safely developing and deploying AI models on sensitive data using confidential computing. 

The solution provides infrastructure, software, and workflow orchestration to data teams in order to establish a secure, on-demand work environment that meets their organization's privacy compliance requirements. For instance, Fortanix Confidential AI is developed specifically to solve the unique privacy and compliance needs of regulated industries, as well as the necessity of protecting intellectual property of AI models. Thus, the rising adoptions is projected to create a plethora of opportunities for market expansion during the forecast period.

Scope of Confidential Computing Market Report

The report on the global Confidential Computing market includes an assessment of the market, trends, segments, and regional markets. Overview and dynamics have also been included in the report.

Confidential Computing Market Segment Insights

The global Confidential Computing market is segmented on the basis of Component, Deployment Model, Application, and Regions.

Based on Component, the global Confidential Computing market is divided into Hardware, Software, and Services. The software segment held 72.1% share of the market in 2022. The software segment is expected grow at a CAGR of 41.6% during the forecast period.

The growing demand for customization and personalization of confidential computing systems requires flexible and scalable software solutions that cater to different user preferences and needs. The increasing demand for security software solutions that allow for the management of secure processing, secure enclaves, and data encryption technologies are driving the growth of software segment in the market.

Based on Deployment Model, the global Confidential Computing market is divided into Cloud-based and On-premises.  The cloud-based segment held 67.1% share of the market in 2022 and is projected to expand at a CAGR of 42.7% during the forecast period. Cloud service providers are continually integrating secure computing features into their platforms, allowing users to develop and manage secure workloads in the cloud. This deployment strategy is gaining importance in a variety of industries such as BFSI, IT & telecommunications and retail. The increasing adoption of cloud computing, as well as the necessity for secure data processing in dynamic contexts, are driving the growth of the cloud-based segment.

In terms of Application, the global Confidential Computing market is divided into Secure Enclaves, Data Security, Pellucidity Between Users, and Others. The Data Security segment held 42.5% share of the market in 2022 and is projected to expand at a CAGR of 43.1% during the forecast period, owing to factors such as confidential computing isolates sensitive data in a secured CPU enclave during processing. Furthermore, as organizations increasingly store and process data in the cloud, concerns about data security have emerged. Confidential computing helps decrease vulnerability by safeguarding data while it is being used or functioning.

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Regional Analysis

Based on regions, the Confidential Computing market is segmented into North America, Europe, Asia Pacific, Latin America, and Middle East & Africa. North America held 40.2% of the market share in 2022. The market is projected to expand at a CAGR of 41.5% during the forecast period, due to the strong presence of major cloud hyperscalers in the U.S. and availability of professional technical skills.

The major players such as Microsoft Azure, Google Cloud platform (GCP), and others offer confidential computing solutions in this region. Furthermore, the strong security demand in this region is expected to push for the adoption of confidential computing within the various industries.

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Key Benefits for Industry Participants & Stakeholders

• In-depth Analysis of the global Confidential Computing market

• Historical, Current and Projected Market Size in terms of Value

• Potential & Niche Segments and Regions Exhibiting Promising Growth Covered

• Industry Drivers, Restraints and Opportunities Covered in the Study

• Recent Industry Trends and Developments

• Competitive Landscape & Strategies of Key Players

• Neutral Perspective on Global Confidential Computing Market Performance

Segments

The global confidential computing market has been segmented on the basis of

Components

• Hardware
• Software
• Services

Deployment Model

• Cloud
• On-premise

Applications

• Secure Enclaves
• Data Security
• Pellucidity Between Users
• Others

Regions

• Asia Pacific
• North America
• Latin America
• Europe
• Middle East & Africa

Key Players

• Amazon Web Services, Inc.
• Microsoft
• Google LLC
• IBM
• INTEL CORPORATION
• ADVANCED MICRO DEVICES, INC.
• Fortanix
• iExec
• HUB Security, Ltd.
• Anjuna Security Inc. 
• Applied Blockchain Ltd.
• Edgeless Systems

Competitive Landscape

Top players in the market include Amazon Web Services, Inc., Microsoft, Google LLC, IBM, INTEL CORPORATION, ADVANCED MICRO DEVICES, INC., Fortanix, iExec, HUB Security, Ltd., Anjuna Security Inc., Applied Blockchain Ltd., and Edgeless Systems.

• These companies are considered key manufacturers of the Confidential Computing market based on their revenue, product offerings, regional presence, and supply chain management system.

• The players are adopting key strategies such as acquisition, collaborations, and geographical expansion which the potential opportunity for the Confidential Computing market.