Cybersecurity Market to Surpass $311.4 Billion by 2031, Driven by Rising Demand in BFSI, Healthcare, and Cloud Security Segments
Meticulous Research®, a prominent global market intelligence and consulting firm, has released its latest report, Cybersecurity Market by Offering (Solutions, Services), Security Type (Network Security, Cloud Security, Endpoint Security), Organization Size, Deployment Mode, Sector (BFSI, Retail & E-commerce, Healthcare), and Geography – Global Forecast to 2031. The report reveals that the global cybersecurity market is projected to grow at a CAGR of 12.8% from 2024 to 2031, reaching $311.4 billion by the end of the forecast period. The accelerating adoption of cybersecurity solutions, fueled by rising cyber threats, government initiatives, and the increasing use of IoT and AI in defense, is expected to drive market growth, despite challenges such as talent shortages and awareness gaps.
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Factors Fueling Market Growth
The robust expansion of the cybersecurity market can be attributed to several critical factors:
- Rising Demand in Banking and Financial Services: The BFSI sector faces increasing security threats and fraudulent activities, driving substantial investments in cybersecurity solutions to safeguard sensitive data and improve customer trust.
- Increasing Cyber Threats: As data breaches and cyberattacks grow more frequent, sectors across the economy are adopting advanced cybersecurity solutions to protect their digital infrastructure.
- Expansion of IoT and Cloud-Based Security: With the increasing adoption of cloud solutions and IoT devices, industries are facing new cybersecurity challenges, heightening the demand for specialized solutions.
Despite these growth drivers, the market faces challenges due to a shortage of cybersecurity professionals and a general lack of awareness about cybersecurity solutions among smaller businesses. However, advancements in AI, machine learning, and blockchain technologies are expected to create opportunities for cybersecurity vendors, who are actively working to develop more effective and accessible solutions.
Market Segmentation Highlights
The Cybersecurity Market report segments the market based on offering, security type, organization size, deployment mode, sector, and region, providing in-depth insights into each segment’s performance and growth trajectory.
Offerings: Solutions Lead, Services Follow
In terms of offerings, the cybersecurity market is segmented into solutions and services. The solutions segment, comprising identity and access management, firewalls, data loss prevention, and more, is expected to account for over 57% of the market share in 2024. The solutions segment’s dominance is attributed to a growing need to monitor network activity, prevent unauthorized access, and secure data in transit. Solutions provide essential attributes such as high performance, reliability, comprehensive coverage, and efficiency, which are crucial in defending real-time applications.
Numerous key players are enhancing their solution portfolios to meet the evolving needs of this segment. For instance, in January 2023, VIPRE Security Group (U.S.) launched a cloud-based Endpoint Detection and Response (EDR) solution, which enables businesses to streamline their cybersecurity management through a user-friendly interface.
Security Type: Network Security and Cloud Security Propel Growth
Among security types, network security holds the largest share of the market, projected to exceed 34% in 2024. Network security solutions are increasingly crucial due to the rise in data breaches and malware attacks, and the need for solutions that monitor and filter network traffic. Industry players have been focusing on developing products that enhance network security, with Fortinet, Inc. (U.S.) launching its FortiGate Cloud-Native Firewall on Amazon Web Services (AWS) in November 2022. This firewall enables enterprises to scale and modernize their security operations with cloud-native integrations.
Meanwhile, the cloud security segment is expected to grow at the highest CAGR over the forecast period, driven by the increasing reliance on cloud services across industries and the need for advanced threat detection. This growth is further supported by notable market activities, such as Radware Ltd. (Israel) establishing a cloud security center in Italy in September 2022, aimed at expanding its cloud security offerings within the region.
Deployment Modes: Cloud-Based Solutions Gain Traction
The cybersecurity market is divided into on-premise and cloud-based deployments. In 2024, the on-premise segment is expected to lead, holding over 58% of the market share. On-premise solutions allow for greater control and customization, making them popular among large enterprises with established IT teams and infrastructure.
However, the cloud-based deployment segment is expected to witness the highest CAGR from 2024 to 2031, as businesses, especially SMEs, increasingly adopt cloud solutions for their flexibility and scalability. Cloud-based cybersecurity solutions enable companies to effectively respond to new cyber threats without substantial infrastructure investments, paving the way for broader adoption.
Organization Size: Large Enterprises Lead, SMEs See Rapid Growth
Large enterprises are anticipated to maintain the largest market share, contributing over 72% in 2024, due to their investment capabilities and skilled IT resources. Large organizations are proactive in implementing robust cybersecurity frameworks to protect critical assets, comply with regulations, and reinforce customer trust.
Small and medium-sized enterprises (SMEs), on the other hand, are expected to register a higher CAGR during the forecast period. The ongoing digital transformation among SMEs and the increasing frequency of cyberattacks on smaller businesses underscore the need for effective, scalable cybersecurity solutions, fueling market growth in this segment.
Sector Insights: BFSI Holds Strong, Healthcare and Retail to Expand
In 2024, the BFSI sector is expected to dominate, with a market share of over 22%, driven by a heightened need for fraud detection, data security, and regulatory compliance. Financial institutions face some of the highest cybersecurity risks, making advanced cybersecurity essential for risk mitigation. Industry players like Tata Communications (India) have responded to this demand with specialized solutions, such as its IZO™ Financial Cloud, launched in July 2021 to support the stringent regulatory standards for BFSI cybersecurity in India.
The healthcare sector is expected to record the highest CAGR through 2031, as the adoption of telemedicine and connected medical devices increases. The rise in cyberattacks on healthcare institutions and the need to secure sensitive patient data are driving investments in cybersecurity within the healthcare sector.
Regional Analysis: North America Leads, Asia-Pacific Surges
Geographically, North America is expected to account for the largest market share, exceeding 38% in 2024, due to its technological advancements, presence of major cybersecurity companies, and high demand across BFSI, retail, and telecommunications sectors. For instance, Digital Guardian (U.S.) launched its data loss prevention-as-a-service solution in April 2021 to meet the unique security demands of midmarket enterprises in North America.
The Asia-Pacific region is projected to register the highest CAGR at 16.0% over the forecast period. Factors such as increased connectivity, government initiatives to boost cybersecurity, and the rising number of ransomware attacks are fueling market growth in the region. The launch of cybersecurity solutions tailored to the needs of the Asia-Pacific market is further driving regional demand.
Key Players Driving Innovation
Several prominent players are shaping the cybersecurity market with innovative products and strategic partnerships. Key players highlighted in the report include:
- Cisco Systems, Inc. (U.S.)
- Fortinet, Inc. (U.S.)
- IBM Corporation (U.S.)
- Check Point Software Technologies Ltd. (Israel)
- Microsoft Corporation (U.S.)
- Palo Alto Networks, Inc. (U.S.)
- CrowdStrike Holding, Inc. (U.S.)
- Trend Micro Incorporated (Japan)
- Qualys, Inc. (U.S.)
These companies have been actively enhancing their cybersecurity portfolios to address the evolving needs of various sectors and meet regional compliance requirements.
Conclusion: Cybersecurity as a Strategic Priority
With the rise of digital transformation, the growing sophistication of cyberattacks, and the proliferation of connected devices, cybersecurity is now a strategic priority across industries. The market’s growth trajectory reflects the necessity of robust security measures in an increasingly digital world. Although challenges such as talent shortages and awareness gaps remain, the continuous innovation by key players and advancements in AI, cloud, and blockchain technologies are expected to overcome these hurdles, paving the way for sustained growth in the cybersecurity market.
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