Homomorphic Encryption Market Size, Trends and Growth Analysis by 2027

The homomorphic encryption sector was valued at approximately US$ 120.12 million in 2019 and is anticipated to grow to US$ 246.29 million by 2027, reflecting a compound annual growth rate (CAGR) of 9.7% from 2020 to 2027.

As the global economy transitions from a manufacturing-centric model to one focused on knowledge and technology, the role of analytics is becoming increasingly crucial. Over the past two decades, technological advancements have led to an explosion in data generation. Consequently, businesses are increasingly relying on data-driven strategies to enhance their product offerings. Organizations across various sectors are forming collaborations and partnerships, pooling resources to strengthen their market positions. However, to comply with privacy and data protection regulations, these organizations must avoid disclosing sensitive information. In many cases, they may not wish to share critical data even when collaborating. Homomorphic encryption provides a solution by allowing organizations to share and process data while keeping sensitive information encrypted. Thus, the growing significance of data analytics, along with the rise in collaborations for product development and research, is expected to propel the homomorphic encryption market forward.

The rise of cloud computing is leading to a decline in traditional on-premises networking. The numerous advantages of cloud computing?including cost-effectiveness, flexibility, scalability, mobility, disaster recovery, and data loss prevention?combined with decreasing costs, are driving organizations to adopt cloud solutions rapidly. However, managing databases in the cloud has raised concerns. While encrypting data is a common approach, it still poses risks during computation since data must be decrypted first. Homomorphic encryption allows organizations to perform computations on encrypted data, enabling complex calculations without compromising security. As cloud computing continues to expand globally and the demand for secure cloud solutions increases, the homomorphic encryption market is poised for significant growth opportunities in the coming years.

The growing computational power of systems, coupled with the ever-increasing volume of data, is expected to enhance the adoption of artificial intelligence (AI) and machine learning (ML) technologies in the near future. AI and ML require vast amounts of data to generate insights and conclusions, which typically necessitates decryption for processing. With rising concerns regarding data privacy and breaches, along with government initiatives aimed at protecting consumer data, homomorphic encryption is likely to become essential. The integration of homomorphic encryption with AI and ML is expected to address privacy issues, allowing organizations to derive valuable insights while maintaining data confidentiality. This synergy between homomorphic encryption and AI/ML is anticipated to shape the future landscape of data processing.

The COVID-19 pandemic has significantly accelerated online shopping trends in the US and Canada, leading to a remarkable increase in B2C e-commerce sales in 2020. North America, being an early adopter of advanced technologies, has a strong digital technology penetration. The pandemic has underscored the importance of homomorphic encryption for secure business data transfers.

During the pandemic, digitization across North America surged in nearly all sectors due to the demand for remote work and monitoring solutions. Additionally, homomorphic encryption has shown promise in the healthcare sector for securing sensitive healthcare data. Companies have recognized the importance of this technology; for example, Duality Technologies has begun offering solutions based on homomorphic encryption for businesses, highlighting its potential applications in healthcare.

The overall size of the homomorphic encryption market has been determined through a combination of primary and secondary research methods. The research process commenced with extensive secondary research utilizing both internal and external sources to gather qualitative and quantitative data related to the market. This approach also aimed to provide an overview and forecast of the homomorphic encryption market across various segments and regions. Furthermore, multiple primary interviews were conducted with industry participants and experts to validate the data and gain deeper analytical insights. Participants in this process included industry professionals such as VPs, business development managers, market intelligence managers, and national sales managers, as well as external consultants like valuation experts, research analysts, and key opinion leaders specializing in homomorphic encryption.

Key players in the global homomorphic encryption market include Cosmian, Cryptoexperts SAS, Inpher, Inc., Shieldo, Inc., Zama, Microsoft, Netskope, Inc., Thales Group, IBM Corporation, and Google LLC.