A new report by Allied Market Research forecasts that the world hardware encryption market is to show a CAGR of 54.6% from 2010- 2020 and be worth just over $296 billion.

The World Hardware Encryption—Market Opportunities and Forecasts, 2014–2020 report proposes that hardware encryption is considered as the most effective form of data protection against unauthorized access, aligning with the actions of various governments across the globe who are coming out with stringent regulations pertaining to data protection. This is seen as a key development that further supplements the demand of hardware encryption as a key data security technology.

The hard disk drives (HDD) segment was found to be the highest revenue generating segment, constituting 57% of the total market revenue in 2014 and is expected to maintain its dominance throughout the analysis period. The segment of encrypted USB flash drives is forecast to grow significantly and register highest CAGR of 58.8% during the forecast period. The increasing demands of robust memory storage devices that are highly compact, offer maximum storage and render better security of data are key factors, which would drive the growth of this segment.

Looking at regions and vertical industries, Asia-Pacific was revealed to be the largest revenue generating region for hardware encryption, followed by North America and Europe, as is set to be the highest revenue generating region, constituting nearly 33.5% of the total market revenue. The region is also likely to registering a CAGR of 56.9% during the forecast period, supplemented by factors such as strong economic growth, development in enterprise IT infrastructure and the large scale outsourcing of BPO operations to China, India and Malaysia.

Among the various verticals, healthcare was the largest contributor, accounting for around 23.8% of the total market revenue in 2014. The sector is projected to continue to be the highest revenue generator throughout the analysis period. Stringent government regulations, and security standards along with the increasing use of BYOD devices, will be key factors supplementing the adoption of hardware encryption in the healthcare sector.