Confidential Computing Market Size, Share & Industry Analysis, By Component (Hardware, Software, Services), By Deployment (On-premise, Cloud), By Enterprise Type (Large Enterprises, SMEs), By Application (Privacy & Security, Blockchain, Multi-party Computing, IoT & Edge, Personal Computing Devices) By Industry (BFSI, Manufacturing, IT & Telecom, Healthcare & Life Science, Retail & Consumer Goods, Government & Public Sector, Others), and Regional Forecast, 2024-2032

The global confidential computing market size was valued at USD 7.26 billion in 2023 and is projected to grow from USD 14.14 billion in 2024 to USD 208.06 billion by 2032, exhibiting a CAGR of 39.9% during the forecast (2024-2032). North America accounted for a market value of USD 3.55 billion in 2023. Confidential computing isolates data within a secure Central Processing Unit (CPU) while processing and offers security against malicious insiders, network vulnerabilities, or any other threat to technology. It involves software as well as hardware-based protection for organizations using a cloud computing environment.

Computing technology is a new security approach that encrypts workloads during file processing, restricts access, and ensures 360-degree data protection. With the introduction of the cloud space, the importance of this technology is increasing. Key players in the market are launching new products in their confidential computing portfolios. Companies such as Microsoft and Google have launched confidential virtual machines in 2020. Amazon Web Services announced the availability of Nitro Enclaves in addition to the basic confidential computing capabilities of the Nitro System. 

In October 2022, Google Cloud introduced Confidential Space, an isolated and secure space for businesses to perform collaborative tasks. In addition, Intel has enhanced its confidential computing service through Project Amber and introduced customer pilot in 2022 to create a multi-cloud, multi-TEE service for third-party authentication. 

Security and privacy have been at the forefront since the pandemic. During the pandemic, many companies adopted work from home policies and increasingly shifted to cloud services. Increasing adoption of cloud services raised concerns related to data security while the data is being processed. However, to meet regulatory requirements, cloud providers are turning to confidential computing.

During the pandemic, around 30% of the world's digital data was generated by the healthcare industry. The healthcare industry increasingly started the use of Artificial Intelligence (AI) and ML to gain insights in the fight against pandemic. Data security concerns have arisen due to the large amount of personal data used. As a result, healthcare organizations are being forced to make cybersecurity a technical, and operational priority. As a result, there has been a surge in adoption of confidential solutions in healthcare to secure AI processing, increase stakeholder trust in further leveraging AI-driven efforts, and provide operational flexibility.

Thus, security concerns among organizations will drive market growth in the future.

Confidential Computing Market Trends

Adoption of Trusted Execution Environments (TEEs) to Boost the Market Growth

In today's world, data is ubiquitous and growing exponentially. With the rise of hackers, data breaches and regulatory policies, it becomes necessary to protect confidential data throughout its lifecycle. As such, organizations are turning to the cloud to accelerate their digital transformation efforts and process more cloud-based data. As data in the cloud grows, cloud infrastructure is no longer sufficient in protecting sensitive data. As per “The 2022 State of Cloud Security Report” by Snyk, around 80% of businesses had encountered at least one cloud security breach in 2021. Additionally, about 49% of respondents stated that security improvements in the cloud environment resulted in faster application and feature deployments.

Due to this, organizations are moving from “institutional trust” to “programmatic trust” by adopting solutions that provide end-to-end protection to their data. However, the adoption of confidential solutions increases and in particular the adoption of TEEs, which provides programmatic trust by protecting and encrypting data in use, also increases. TEEs will gain traction in the coming years, as major organizations will use TEEs for sensitive workloads and this will increase the demand for solutions.

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Confidential Computing Market Growth Factors

Increasing Incidences of Data Breach to Boost the Demand for Confidential Computing Solutions

Advances in digitization and the Internet of Things (IoT) generate massive amounts of data. The exponential growth of data being generated in key industries, such as medical records, banking, financial services, e-commerce, videos, and images, among others, required businesses to cope with data related security concerns. In recent years the number of cyberattacks and data breaches has surged and is expected to rise exponentially. According to CyberSecurity Ventures, global cybercrime is expected to cost the world around USD 10 trillion by 2025. According to data by Surfshark, cybercriminals breached around 108 million accounts in 2022, the highest since 2021. However, confidential solution adoption is increasing for securing the data.

Confidential computing is ready to become one of the essential components of cybersecurity in the coming years, especially in industries such as healthcare and BFSI. Using confidential solutions, the data and techniques used while processing are only accessible to the authorized user and it allows businesses to fully control the data even while it is running in a public environment. This technology is the solution for cloud data insecurity as it incorporates homomorphic encryption, a process which allows the users to perform computational and binary operations without revealing data to the third party. Thus, increasing incidences of data breach is driving the confidential computing market growth.

RESTRAINING FACTORS

High Implementation Cost to Hinder the Market Growth

Implementing confidential computing technology requires significant investment and due to this, SMEs are unable to adopt them. This technology requires specialized hardware including dedicated processors, secure enclaves for ensuring the security and privacy of data and computations. Further, there is a requirement of software that manages the secure data and computations and this software is licensed by vendors, which adds to the overall cost of implementation. For implementing this technology, skilled professionals with expertise in cryptography, cloud computing, and data security are required and hiring & retaining such professionals is expensive.

Thus, the high cost related to the implementation of the technology hinders the market growth.

Confidential Computing Market Segmentation Analysis

By Component Analysis

Increasing Demand for Services to the Boost the Market

By component, the market is divided into hardware, software, and services.

The services segment is projected to grow with a high CAGR during the forecast period. The services include application development services, integration services for confidential applications, third-party services to develop applications that utilize TEE, managed services for confidential applications, third-party services for management and maintenance of TEE-based applications, and middleware integration services.

The demand for services is increasing as the services help businesses to design and integrate the computing solution into their existing infrastructure and the services help businesses to identify use cases, ensuring seamless integration of TEEs or secure enclave in the overall system design and to develop architecture blueprint.

The hardware segment is expected to have steady growth due to expanding regulations, demand for compressive security postures, and increasing adoption of cloud environments. Hardware components are designed to enhance the security of sensitive data by safeguarding it during processing. As data privacy concerns continue to rise, the demand for hardware solutions is expected to further increase.

By Deployment Analysis

Shifting Data to Cloud is Fueling the Market Growth

By deployment, the market is divided into cloud and on premise.

Cloud deployment is expected to showcase a high CAGR during the forecast period as organizations are shifting their data workload on the cloud. During pandemic organizations adopted work from policies and due to this they started shifting their data on cloud. However, increasing the demand for cloud-based solutions is driving the market growth.

Enterprises still rely on on-premises deployment due to security risk surrounding data sensitivity and enterprises prefer to keep KMS control within their on-premise data centers.

By Enterprise Type Analysis

Adoption of Confidential Solution among Large Enterprises to Boost the Market Growth

By enterprise type, the market is segmented into large enterprises and SMEs.

Large enterprises segment held maximum confidential computing market share in 2022 and is estimated to grow with a high CAGR. Large enterprises rely on computing solutions as they can better guarantee that their data is protected and confidential in the cloud. It also protects data, extends the benefits of the cloud to sensitive workloads, protects intellectual property, and enables secure collaboration with partners on new cloud solutions. Moreover, it eliminates concerns about choosing a cloud provider and protects data processes at the edge.

By Application Analysis

Increasing Demand for Multi-party Computing is Driving the Market Growth

Computing solutions are used for various applications such as privacy & security, blockchain, multi-party computing, IoT & edge, and personal computing devices.

The multi-party computing segment is expected to witness significant growth in the next few years as it helps businesses reduce the risk of single points of compromise and enable compliant instant digital asset transactions. Multi-party computing has the advantage of keeping assets online for real-time transactions, allowing multiple parties to collaborate on transactions in a privacy and policy-compliant manner.  

The privacy & security segment is estimated to witness growth during the forecast period as the awareness regarding data privacy is growing and is expected to play a vital role in deciding new government regulations, which is driving the adoption of computing solutions. Various governments across the globe have initiated stringent measures regarding data privacy, which, in turn, will propel the market.

By Industry Analysis

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Growing Focus on Data Security Concern to Surge Healthcare & Life Science Segment CAGR

Confidential computing technologies are used across various industries, including BFSI, IT & telecom, manufacturing, retail & consumer goods, healthcare & life science, government & public sectors, and others.

The healthcare & life science segment is expected to witness a higher CAGR in the coming years. Adoption of confidential solutions is increasing among healthcare organizations to protect the sensitive information and the intellectual property that is in AI algorithms. This vulnerability in using data is a key issue in the secure implementation of AI modeling and often hinders progress in treating diseases. Confidential computing helps protect medical data, maintain privacy in use, and overcome these challenges.  

The retail segment is expected to witness growth in the coming years as retailers are witnessing a significant shift in customer behavior and expectations. Retailers understand the needs of modern shoppers and are making fundamental changes to be flexible and to provide the best service to their customers. However, the adoption of computing solutions is increasing in the retail segment for protecting customer data.

REGIONAL INSIGHTS

The market is geographically studied across North America, South America, Europe, the Middle East & Africa, and Asia Pacific and each region is further studied across countries.

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According to our analysis, North America generates maximum revenue share and is estimated to showcase high growth rate during the forecast period, owing to the strong presence of local cloud hyperscale providers in the U.S. Increasing demand for security and to tackle cyber threat among the countries in the region is one of the important factors for market growth in the region. The governments in the region are focusing on developing and adopting innovative cybersecurity paradigms, which is surging the demand for security solutions.

Due to increase in data breaches, the adoption of confidential solutions is increasing in this region. Approximately 817 data breaches were reported in the U.S. in 2022. The U.S. pharmaceutical company Pfizer accidentally exposed the personal data of domestic prescription drug consumers in a data breach caused by insecure cloud storage. A data breach costs about USD 9.44 in the U.S. Therefore, these factors are driving the North America market growth.

The report indicates that the market in Europe will witness high growth during the forecast period. In 2021, under the European Union's General Data Protection Regulation and Germany's IT Security Act (ITSiG), the European Union Agency for Cybersecurity (ENISA) classified confidential computing as a "State of the Art" technology with respect to protecting data. Various industries in the region are adopting computing solutions for protecting sensitive data and complying with data protection regulations. Legal requirements, authorization, and continuous monitoring for cloud products and services are increasing the demand for confidential solutions.

The market in Asia Pacific is estimated to grow in the coming years as the governments in the countries of the region are introducing and developing innovative cybersecurity paradigms. Further, countries in the region are contemplating new and strict privacy laws that define how to protect sensitive data.

The markets in the Middle East & Africa and South America are estimated to grow in the coming years due to rising concerns pertaining to data security & privacy.

List of Key Companies in Confidential Computing Market

Key Players Focus on Developing Innovative Solutions to Intensify Competition

Major players strengthen their market position by introducing products in the market. In addition, partnerships and collaboration strategies enable companies to expand their product range and achieve organizational goals. Leading companies are now deploying advanced technology solutions, such as AI, Machine Learning (ML), and cloud, to improve their products and deliver enhanced solutions. 

List of Key Companies Profiled:

• IBM Corporation (U.S.)


• Microsoft Azure (U.S.)


• Intel (U.S.)


• Google Cloud (U.S.)


• AMD (U.S.)


• Amazon Web Services (AWS)


• Arm (U.K.)


• Profian (U.S.)


• Decentriq (Switzerland)


• Swisscom (Switzerland)

KEY INDUSTRY DEVELOPMENTS:

• In November 2023, Anjuna Security, Inc. unveiled a universal confidential computing platform called “Anjuna Seaglass”, a cloud-based and server chipset agnostic platform that works across various application architectures.


• In September 2023, Intel announced the launch of an attestation service to strengthen the confidential computing portfolio of the company by offering a unified assessment of Trusted Execution Environments (TEEs) across various deployment modes.


• In May 2023, Intel released - Project Amber, a new security-as-a-service solution. The solution is designed to verify remotely if a computing facility in the cloud, network's edge, or on-premises environment is trustworthy.


• In April 2023, Fortanix entered into a partnership with Imperva and joined a strategic partner program. The partnership aims to bring together both the cybersecurity companies that focus on protecting multi-cloud data.


• In April 2023, Microsoft expanded its confidential VM family by introducing the D and E Cesv5-series in preview. These VMs that feature Intel 4^th generation Xeon Scalable processors are backed by Intel Trust Domain Extensions (TDX), a hardware-based Trusted Execution Environment.

REPORT COVERAGE

An Infographic Representation of Confidential Computing Market

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The study on the market includes prominent areas globally to gain enhanced knowledge of the industry. Moreover, the research offers insights into the most recent endeavor and industry developments, as well as an analysis of high-tech solutions that are being adopted rapidly worldwide. It also highlights some of the growth-stimulating drivers, restraints, and opportunities, allowing the reader to obtain a comprehensive understanding of the market.

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