The global optical encryption market is estimated to witness a strong growth rate of around 8.2% over the period of 2019–2028. The market is expected to grow at a significant pace owing to the increasing internet penetration, rising focus on cybersecurity, and growing smart city projects across the globe. The increasing internet penetration has increased the concerns associated with data traffic and data security, which in turn, is expected to drive the adoption of optical encryption technology across the globe.
Optical encryption is an emerging medium to protect data with high capacity, as it crosses cities, countries, and borders. As a means of securing in-flight data, optical encryption has remarkable benefits compared to conventional encryption solutions that operate at higher layers of the network. As a result, optical encryption techniques will be increasingly adopted to provide an exceptionally secure connection to the infrastructure by protecting data from theft.
IPsec or Layer 3 accounted for the largest share in the global market
Based on the encryption layer, the global optical encryption market is segmented into OTN or layer 1, MACsec or layer 2, and IPsec or layer 3. IPsec or Layer 3 is dominating the global market in 2022 and is further estimated to continue its dominating nature over the forecast period. Internet-based virtual private networks (VPNs) extensively use and accept layer 3 encryption as it provides seamless security to application and transport layers and can be applied to all-sized networks such as local area networks (LAN), wide area networks (WAN), and others.
Additionally, there are several large-scale IPsec deployments in operation in current years across a variety of enterprise and government networks. Whereas, OTN or layer 1 is expected to witness the highest CAGR during the forecast period on account of the advantages offered by it including reduced cost, lower latency, high bandwidth efficiency, improved performance, and high availability.
The Asia Pacific is expected to gain the fastest momentum globally
The Asia Pacific is expected to observe the fastest growth rate over the forecast period due to extent of networks such as telecom (including 5G), consumer electronics, data centers, and smart city initiatives in China, India, Malaysia, and Thailand among others. Increasing internet penetration also remains one of the factors that is augmenting the regional growth of the optical encryption market. Internet penetration in emerging economies has been rising owing to the cohesive government initiatives to promote digitalization.
For instance, in 2015, the Indian government launched the Digital India campaign to promote digitalization, increase internet connectivity and improve online infrastructure within the country. This, in turn, is supporting the rising number of internet users in the country. As per the International Telecommunication Union (ITU), the percentage of the population using the internet in the country has increased from 20.08% in 2018 to 43.00% in 2020, representing an increase of over 140%.
Market Structure and Competition Landscape
The global optical encryption market consists of various players operating in the market. Some of the prominent players that contribute significantly to the market growth include Nokia Corp., Cisco Systems Inc., Huawei Technologies Co. Ltd., Broadcom Inc., Juniper Networks Inc., Ciena Corp., ECI Telecom Ltd., Microsemi Corp., Arista Networks Inc., Crown Castle International Corp., ADVA Optical Networking SE, Microchip Technology Inc., and Thales Group, among others.
These players adopt various strategies in order to reinforce their market share and gain a competitive edge over other competitors in the market. Mergers & acquisitions, partnerships and collaborations, and product launches are some of the strategies followed by industry players. Some of the key developments in the global optical encryption market include,
- In March 2021, Cisco Systems Inc. announced the acquisition of Acacia Communications Inc., a Massachusetts-based company that designs, manufactures, and sells a complete portfolio of high-speed optical interconnect technologies addressing a range of applications across datacenter, metro, regional, long-haul, and undersea networks. The acquisition has strengthened Cisco’s routing and optical networking portfolio.
- In April 2020, Tasmanian Network Pty Ltd. selected Ciena’s Wavelogic Ai coherent optical solution. This was done to address rising bandwidth requirements driven by IoT, 5G, and data center services to cater to its end users with mission-critical tasks. Wavelogic Ai is a coherent optical solution that provides Tasmanian Networks’ with 42-24 enhanced capacity and efficiency in the network.
Key Market Segmentation
RationalStat has segmented the global optical encryption market on the basis of encryption layer, data rate, end-user, and region.
- By Encryption Layer
- OTN or Layer 1
- MACsec or Layer 2
- IPsec or Layer 3
- By Data Rate
- Less than 10 G
- 10 G to 40 G
- 40 G to 100 G
- More than 100 G
- By End-User
- IT & Telecom
- Retail & E-Commerce
- Data Center & Cloud
- Government & Defense
- Others (Manufacturing, Energy & Utilities, Education, etc.)
- By Region
- North America
- Latin America
- Rest of Latin America
- Western Europe
- Rest of Western Europe
- Eastern Europe
- Rest of Eastern Europe
- Asia Pacific
- South Korea
- ASEAN (Indonesia, Vietnam, Malaysia, etc.)
- Rest of Asia Pacific
- Middle East & Africa
- South Africa
- Rest of the Middle East & Africa
- North America
RationalStat has developed a state-of-the-art research methodology to crunch numbers and provide the best possible real-time insights to clients. We combine a varied range of industry experience, data analytics, and experts’ viewpoint to create a research methodology for market sizing and forecasting.
RationalStat combines a mix of secondary sources as well as primary research to assess the market size and develop a forecast. Key steps involved in accurately deriving the market numbers are:
- Defining the problem by understanding the type of market and data required by the client.
- Data gathering and collection through relevant paid databases, publicly available sources, company reports, annual reports, surveys, and interviews.
- Formulating a hypothesis to create market numbers, forecast, influencing factors, and their relevance.
- Evaluating and analyzing the data by referring to data sources utilized and leveraged.
- Validating, interpreting, and finalizing the data by combining the details gathered from primary and secondary sources with the help of experienced analysts.
- Annual reports, company filings, investor presentations, product catalogs, and company documents
- Industry and market-related documents available in the public domain
- Paid database including Bloomberg, Factiva, S&P Capital IQ, FactSet, Refinitiv Eikon, ICIS, EUWID, Thomson Reuters, among others
- Whitepapers, research papers, and industry blogs.
Why Buy this Report?
The report is intended for optical encryption providers, investment firms, government organizations, manufacturing firms, healthcare facilities, educational organizations, regulatory agencies, research organizations, and market research firms, among others. The report provides an in-depth analysis of market size, consumption pattern, ongoing market trends and challenges, and future market opportunities. The report will serve as a source for a 360-degree analysis of the market thoroughly delivering insights to clients to find the right answers to their business questions.
Frequently Asked Questions (FAQs)
The Global Optical Encryption market is expected to grow at a CAGR of over 8.2% during the forecast period 2022-2028.
North America is dominating the Global Optical Encryption market in 2021.
The Global Optical Encryption market is expected to reach around US$ 5.5 billion by 2026.
Rising focus on cyber cities and smart cities are the key drivers in the Global Optical Encryption market.
Major companies operating in the Global Optical Encryption market include Nokia Corp., Cisco Systems Inc., Huawei Technologies Co. Ltd., Broadcom Inc., Juniper Networks Inc., Ciena Corp., ECI Telecom Ltd, etc.