Encrypt data in the cloud

2024: Global Cloud Encryption Market Exceeds $4 Billion for the Year

At the end of 2024, the costs of the global cloud encryption market reached 4.07 billion. About 40% of this amount was in the Asia-Pacific region. Such data are reflected in the Fortune Business Insights review published on March 27, 2025.

One of the drivers of the industry under consideration, the authors of the study call the COVID-19 pandemic, which accelerated the transition of companies and organizations around the world to cloud platforms. This model provides flexibility, scalability, and economic benefits. Moving from traditional on-premises solutions to cloud infrastructures can significantly reduce initial capital costs. These services can be accessed from anywhere in the world with an Internet connection, which is important against the background of transferring employees to remote work. Clouds allow companies to expand their IT infrastructure as needed, reducing the need for expensive local hardware. However, everywhere, the introduction of cloud services has led to various security problems, which has provoked the need for information encryption.

As of 2023, 68% of organizations used cloud platforms to store and process sensitive data, according to the Encryption Consulting Report. At the same time, 58% of enterprises have implemented one or more encryption technologies to protect information in the cloud, and another 44% of companies planned to do so within two years.

The development of the cloud encryption market, as noted, is also facilitated by the requirements of regulators regarding the protection of personal information. Attackers are constantly improving the tactics used to steal data. In particular, artificial intelligence tools are being introduced to automate cyber attacks. Leaks threaten organizations with fines and reputational damage. This forces companies to invest more in data protection tools.

At the same time, there are also certain restraining factors. One of them, analysts call the complexity of managing encryption keys in the cloud. In addition, the use of cryptographic algorithms increases computational costs. This can negatively affect the performance of applications that are highly dependent on cloud resources.

In terms of cloud encryption, the market is segmented into BFSI (banking, financial services and insurance), health care retail and e-commerce, IT and telecommunications, government sector, aerospace and defense, etc. In 2024, the largest share of revenue was provided by IT and - telecommunications 22.1%. According to the service model, services (PaaS platform as a service), (IaaS infrastructure as a service) and (SaaS as a software service) are distinguished. The PaaS sector is leading, but SaaS is showing the highest growth rate. Geographically, the largest revenue was recorded in the Asia-Pacific region - $1.65 billion at the end of 2024. Major players in the global industry are named:

• IBM;
• Sophos Group;
• Thales Group;
• Skyhigh Security;
• Microsoft;
• Netspoke;
• Cisco;
• NPE;
• Atos;
• Hitachi Solutions.

In 2025, costs in the cloud encryption market are expected to reach $5.27 billion. Fortune Business Insights analysts believe that in the future, the CAGR will be 29.8%. Thus, by 2032, spending on a global scale could rise to $32.68 billion.^[1]

2016: Gemalto and Ponemon Institute study: More than 60% of confidential company data in the cloud is not encrypted

While cloud computing remains a critical asset for many organizations, companies are not implementing appropriate policies or implementing the necessary security measures to protect sensitive data stored in the cloud infrastructure. These are just some of the findings of the Global Study on Data Security in the Cloud in ^[2]"(The 2016 Global Cloud Data Security Study), commissioned by Gemalto, a global leader in digital security, by the Ponemon Institute. The study surveyed more than 3,400 IT practitioners and information security experts around the world to gain a better understanding of key data management trends and cloud security practices.

According to 73% of respondents, cloud services and platforms are considered an important factor in the activities of their organizations, while 81% of respondents believe that in the next two years the role of cloud services in the work of companies will become even more significant. In fact, 36% of respondents said that all the IT needs of their companies, as well as data processing needs today, are fully met using cloud resources. Moreover, this figure is expected to rise to 45% over the next two years.

Although cloud resources today play an increasingly important role in solving corporate IT problems and in implementing business strategies, according to 54% of respondents, their companies lack any proactive approach to managing security and compliance with privacy and data protection requirements stored in cloud environments. And all this despite the fact that 65% of respondents stated their organizations' commitment to ensuring the protection of confidential and other critical information in the cloud. Moreover, 56% do not believe that their organizations are cautious about placing such information in a cloud environment for the access of third parties, for example, business partners, contractors or suppliers.

Key findings

The development of shadow IT poses a threat to security in the cloud

According to the survey, in about half of the cases (49%), cloud services are not implemented by corporate IT departments, but by other departments of companies, and about 47% of corporate data stored in cloud environments is not managed or controlled by IT departments. Nevertheless, there is an increase in confidence among respondents that they have complete information about the cloud computing services used in their organizations. 54% of respondents believe that their IT organizations know about all used applications, platforms and infrastructure services of cloud computing, which is nine percent higher than in 2014.

Traditional Security Practices Not Applicable in the Cloud

In 2014, 60% of respondents believed that protecting confidential or proprietary information when working with cloud services was a more difficult task. This year, 54% think so. If in 2014 48% respondents complained about the difficulties associated with controlling or restricting user access, then in 2016 53% respondents already declared such difficulties. Other major issues that make security more complex include the impossibility of using traditional information security tools in cloud environments (70% of respondents) and the inability to directly control cloud service providers for compliance with security requirements (69% of respondents).

More and more customer information is stored in the cloud, and it is this data that is considered the most at risk

According to the survey, most often such types of data as customer information, email addresses, consumer data, personal files of employees and payment information are stored in the cloud. Since 2014, the largest increase has been recorded in relation to information stored in the cloud about customers: if in 2014 the 53% of respondents claimed that their company stores such information in the cloud, then in 2016 the 62% of respondents said so. In addition, according to 53% of respondents, it is customer information that is most at risk in the cloud.

Security units remain in the dark about cloud services being purchased

Only 21% of respondents said that security officers in their companies are involved in decisions about the use of certain cloud applications or platforms. The majority of respondents (64%) also said that their organizations do not have rules or policies that require the use of security technologies, such as encryption, as a condition for using certain cloud applications.

Encryption is considered an important factor, but has not yet been ubiquitous in the cloud

72% of respondents say that an important factor for them is the ability to encrypt or tokenize confidential or service data, while 86% believe that in the next two years this opportunity will become even more relevant. For comparison, in 2014, 79% of respondents thought so. Despite the fact that more and more respondents realize the importance of encryption, this technology is not yet so widely used in the cloud. For example, for the most popular type of cloud service, SaaS, only 34% of respondents say that their organization encrypts or tokenizes confidential or service data directly in cloud applications.

Many companies still use passwords to protect user access to cloud services

According to sixty-seven percent of respondents, managing user accounts in the cloud is more difficult than managing these records in a local infrastructure. However, organizations do not take even the easiest measures to implement that would help improve security in the cloud. About half (45%) of companies do not use technology multiple-factor authentications to protect the access of their employees or third parties to cloud applications or data, which means that companies still rely only on logins and passwords for account validation. As a result, more and more data are at risk, as 58% of respondents admit that in their organizations access to corporate data and information in the cloud is also allowed for third-party users.

Cloud Security Best Practices

The new realities of cloud information technology mean that IT organizations need to develop and implement comprehensive data management and compliance policies, develop uniform principles and regulations regarding the acquisition and use of cloud services, and establish rules that regulate which data can be stored in the cloud.

IT departments will be able to fulfill their mission of protecting corporate data, while promoting the development of "shadow IT" if they implement measures to ensure data security, for example, implement encryption technologies that would allow centrally protecting data in the cloud against the background of how other departments of the company independently acquire the necessary cloud services.

As companies store more data in the cloud and increasingly use cloud services, IT organizations need to pay more attention to strengthening user access control mechanisms using multi-factor authentication. This is especially true for companies that provide access to their data in the cloud to third-party companies and suppliers.

Notes