Encrypted Cloud Storage Market Size, Share & Analysis | 2031

Report Description

The global encrypted cloud storage market size was USD XX Mn in 2022 and is likely to reach USD XX Mn by 2031, expanding at a CAGR of XX % during 2023–2031. Rising concerns about storing sensitive organizational information are propelling the market.

Encrypted cloud storage is a service provided by cloud storage companies where customer information is transformed by using encryption algorithms into ciphertext, which is then stored in the cloud. The benefit of encrypted cloud storage is that encryption programs such as Cryptomator protects user data even before it is uploaded. This implies that before writing to the disk, cloud storage always encrypts the user data on the server side.

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Zero-knowledge encrypted cloud storage is a method of encrypting the data, where only authorized users have access to the encryption key and no other user can decode it. It is a crucial step for cloud protection. Any business that stores its information files online prefers to choose zero-knowledge cloud storage as it offers advanced security.

Data storage is crucial for the efficient operation of any modern business as they contain bulk data associated with the company and the users. Securing this data is considered a high-priority task in numerous organizations. The file storage system provides authentic access and manages huge volumes of data. Even when the data is breached through unauthorized access, encrypted data remains unreadable without its key access.

Cloud encryption offers confidentiality and security, and it is mandated by various regulatory bodies and standards such as Federal Information Processing Standards (FIPS), PCI Security Standards Council, LLC, Federal Information Security Modernization Act (FISMA), and Health Insurance Portability and Accountability Act (HIPPA).

The market report finds that the COVID-19 pandemic accelerated the demand for the encrypted cloud storage market as numerous businesses shifted to remote work setting from in-office operations. Due to remote operations in the organizations, many employees worked from independent locations. This increased the demand for cloud storage as it promotes flexible file transfers, communication, and accessibility. The increasing risk of cyber-attacks and concerns for cybersecurity increased the market demand.

Encrypted Cloud Storage Market Dynamics

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Major Drivers

Encryption removes the risk of data breaches and unauthorized access. It ensures that the data remains secure regardless of the device on which it is stored and accessed. Encryption can help prevent data breaches during transfer and storage. If an employee loses a company device like a smartphone or laptop, encrypted data may still be secure. Encrypted communication lines allow sensitive data to transfer without the risk of a security breach.

Existing Restraints

The lack of data security caused by failed encryption is likely to restrain the market in the forecast period. This causes a loss of data due to insufficient cybersecurity standards. Furthermore, encrypted cloud storage grants only limited data security which causes complexity in recovering lost data.

Emerging Opportunities

The introduction of 5G infrastructure allows high data streaming from the cloud which is projected to create lucrative opportunities in the market. The rising popularity of augmented and virtual reality increases the demand for cloud storage which results in market expansion.

Adopting a hybrid cloud model benefits the companies it allows to store confidential data on private servers for monitoring, and data that requires frequent and instant access is stored in public servers. Furthermore, new entrants in the market are likely to provide companies with some discounts in exchange for a commitment to the integration of cloud encryption services, which is further projected to create lucrative opportunities in the market.

Scope of Encrypted Cloud Storage Market Report

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

Market Segment Insights

Based on storage format, the encrypted cloud storage market is trifurcated into object storage, block storage, and file storage. The object storage segment is projected to hold a major CAGR in the coming years, as it is cost-effective and organizations only pay for what they utilize. It is highly scalable and useful for unstructured randomly accessed data.

The object storage has optimum metadata that helps in easy data access and organization. The object storage format is ideal for developing websites and applications, storing unstructured data, analyzing & managing data, and archiving data storage.

The block storage segment is expected to grow at a rapid pace during the forecast period, as it is an efficient and fast storage format. It breaks information from around 256 KB to 4MB and stores the data in blocks. Each block consists of unique identifiers to differentiate it from other blocks.

Block storage is useful for storing large randomly accessed files including databases and application logs. The lack of metadata makes it difficult to track and search data, thus block storage is beneficial and with low latency and high IOPS, block storage is ideal for high-performance applications. Block storage is highly compatible and flexible with different operating systems and file systems which makes it ideal for enterprise use.

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On the basis of data state, the global market is segregated into data in use, data at rest, and data in motion. The data in use segment is projected to register a considerable CAGR during the forecast period, as it provides real-time analysis. It is always being updated, processed, accessed, and then read by the system.

Data in use is secured by encryption & advanced authentication of users, authorized permissions for all profiles of the organization, and strong identity management. These factors are expected to boost the segment.

The data at rest segment is expected to expand at a significant rate in the coming years, as the data is stored effectively on an external or internal storage device. The information stored in this data state is considered stable compared to other states. Some examples of digital data at rest are backup data storage, corporate files, USB drive data, and file archives.

Based on algorithm type, the encrypted cloud storage market is bifurcated into symmetric encryption and asymmetric encryption. The asymmetric encryption segment is expected to register a robust growth rate during the projection period, as it offers better security.

It has two keys which are private and public authentication tokens. These keys are linked with each other, but they are not considered similar. These keys provide security where the data is not accessible unless both users are provided with public & shareable keys and personal tokens.

The symmetry encryption segment is anticipated to contribute to a considerable market share, as the implementation is faster and simpler. It is a cost-effective way to compute and has two same keys for encryption and decryption.

As symmetry encryption segment it uses the same keys for encryption and decryption, this takes less computational power, which in turn increases the speed of encryption. Advanced Encryption Standard (AES) is a symmetric encryption algorithm commonly used for data encryption. This algorithm is mainly used in bulk data encryption. These factors are likely to propel the segment.

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On the basis of organization size, the global market is bifurcated into small & medium enterprises and large enterprises. The small & medium enterprises (SMEs) segment is projected to witness considerable growth in the coming years, as it allows effective management of excessive data.

The usage of cloud storage in SMEs has benefits such as flexible work operation from independent locations. Cloud storage allows faster working by providing computing power to numerous files at a single time or many customers or employees simultaneously. This facilitates real-time file transfer to customers who have shared access to the cloud. This enhances competitiveness among many SMEs.

The end-to-end encrypted cloud storage facility is applied for collaboration in cloud-based office programs where various users can access and edit a document. Cloud encryption software provides easy backup options for SMEs, which eliminates the need for manual data backup, thus fueling the segment.

The large enterprises segment is expected to grow rapidly during the projection period, as it offers flexibility and scalability to businesses. Encrypted cloud storage offers reduced costs when compared to local storage facilities, thus large enterprises adopt them.

For instance, According to Zippia, Inc., 94% of total enterprises utilize cloud services, and 67% of enterprise infrastructure is stored on the cloud.

Based on end-use, the market is divided into information technology & telecom, banking, finance, security & insurance, healthcare, government, and others. The information technology (IT) & telecom segment is anticipated to hold a major market share during the forecast period owing to the increasing usage of encrypted cloud services by major IT & telecom companies IT companies and firms mostly prefer encrypted cloud services for data security concerns.

The IT & telecom industry integrates cloud technologies at all levels as it reduces the time and cost required for the process. Cloud storage solves the concerns of data management and help organizations to meet the requirement of regulatory standards such as FIPS, HIPAA, and PCI DSS. It also helps small telecom & IT firms to manage the operational costs which helps in the segment growth in the market.

The banking, finance, security & insurance (BFSI) segment is expected to register a robust growth rate during the projection period, as it holds the confidential data of many customers and users. BFSI has everyday operations and transactions that are highly prone to cyber-attacks while file transferring. BFSI operations contain sensitive demographic and financial data of customers and are regulated by strict standards, thus BFSI integrates with cloud storage.

In terms of region, the global encrypted cloud storage market is classified as Asia Pacific, North America, Latin America, Europe, and Middle East & Africa. North America is expected to dominate the market during the forecast period, with its well-established technical infrastructure. The presence of major tech and cloud service-providing companies in the region aids in boosting market revenue and opens up new pathways for new market players in the coming years.

Asia Pacific is projected to be a growing region for the encrypted cloud storage market in the coming years, due to the rapid infrastructural growth in countries such as India and China. The countries in the region have rapidly growing technological infrastructure and a large population that needs data security.

With the ongoing rapid industrialization in developing countries, major tech companies that provide cloud services are focusing on investing and developing new tech infrastructures in the region. This in turn helps to boost the revenue of the market in the coming years.

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