The Americas is expected to dominate the market with the largest share between 2018 and 2023. This is due to the presence of some key players such as Ciena (US), Cisco (US), Infinera (US), Arista Networks (US), and Juniper Networks (US) in the region. The high adoption of cloud-based applications in the Americas has led to a dramatic increase in the number of cyberattacks, which are also becoming more sophisticated. Also, there is increasing demand for optical encryption solutions due to the need for regulatory compliance and security concerns.
Greater than 10G and less than 40G data rate to hold largest share of optical encryption market during forecast period
The greater than 10G and less than 40G data rate is expected to hold the largest share of the market during the forecast period. This can be attributed to the large-scale adoption of the optical encryption in different verticals such as BFSI, government, healthcare, and energy and utilities where the average data rate transfer is in the range of 10G and 40G.
Optical encryption market for data center and cloud vertical to grow at highest CAGR during forecast period
The optical encryption market for the data center and cloud vertical is expected to grow at the highest CAGR during the forecast period. Data centers play a crucial role in delivering IT services and providing storage, communications, and networking to a growing number of networked devices, users, and business processes in general. The growing importance of data analytics has boosted the value and growth of data centers.
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Layer 3 encryption accounted for the largest share of the optical encryption market in 2017. Layer 3 encryption is widely used and accepted for internet-based virtual private networks (VPNs). Many large-scale IPsec deployments are currently in operation across enterprise and government networks. It provides seamless security to application and transport layers and can be applied to networks of all sizes from local area network (LAN) to wide area network (WAN). The market for Layer 1 is expected to grow at the highest CAGR during the forecast period. The reason for this growth is the advantages such as reduced cost, lower latency, high bandwidth efficiency, improved performance, and high availability, offered by Layer 1 encryption.
The greater than 10G and less than 40G data rate segment accounted for the largest share of the optical encryption market in 2017. This can be attributed to the large-scale adoption of the optical encryption in different verticals such as BFSI, government, healthcare, and energy and utilities where the average data rate transfer is in the range of 10G and 40G. The market for greater than 100G optical encryption is expected to grow at the highest CAGR during the forecast period. This growth can be attributed to the requirement for encryption rates to align at speeds beyond 100G for any packet size so as to meet the demand for increased bandwidth driven by cloud services, mobile devices, and massive increases in video traffic.
The banking, financial services, and insurance (BFSI) vertical accounted for the largest share of the market in 2017. The optical encryption is being increasingly deployed by the BFSI sector to protect their customers, meet government and industry data security compliance standards, facilitate security auditing, and avoid reputation damage caused by data breaches. The optical encryption market for the data center and cloud vertical is expected to grow at the highest CAGR during the forecast period. Data centers play a crucial role in delivering IT services and providing storage, communications, and networking to a growing number of networked devices, users, and business processes in general. The growing importance of data analytics has boosted the value and growth of data centers.
The Americas accounted for the largest share of the optical encryption market in 2017. The high adoption of cloud-based applications in the Americas has led to a dramatic increase in the number of cyberattacks, which are also becoming more sophisticated. The optical encryption market in APAC is expected to grow at the highest CAGR between 2018 and 2023 owing to the extension of the network in China, Thailand, Malaysia, South Korea, India, and other developing countries in APAC. APAC is the largest producer as well as consumer of smartphones, laptops, televisions (TVs), and various other data-generating devices across the world.
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