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Data Diode Solution Market Size, Share & COVID-19 Impact Analysis, By Type (Regular Data Diode and Ruggedized Data Diode), By Application (Government, Energy and Power, Manufacturing, Oil and Gas, Aerospace and Defense, Critical Infrastructure, and Others), and Regional Forecast, 2023-2030

Region : Global | Format: PDF | Report ID: FBI104770

 

KEY MARKET INSIGHTS

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The global data diode solution market size was valued at USD 437.1 million in 2022 and is projected to grow from USD 488.4 million in 2023 to USD 1,116.2 million by 2030, exhibiting a CAGR of 12.5% during the forecast period.


Cyber-attacks, malware, ransomware, and phishing attacks have increased substantially in recent years, necessitating the implementation of comprehensive cyber security architecture to safeguard mission-critical assets. Thus, rising trends and challenges involving critical infrastructure, cybersecurity, and industrial assets are accelerating the demand for data diode solutions.


According to research by Infosecurity Magazine, a prominent part of Infosecurity Group, a business unit owned and operated by Reed Exhibitions UK Ltd., ransomware damages were expected to exceed USD 30 billion globally in 2023. Furthermore, according to the Acronis’ report, 600 malicious email drives were launched in the first six months of 2022, 28% of which contained malware and 58% were phishing emails. In the near future, the development of Operational Technology (OT) and Industrial Control Systems (ICS) is projected to fuel the market expansion.


The market is inclusive of various data diode solutions such as X.D. Prism MPP by Owl Cyber Defense, WF-500 by Waterfall Security Solutions Ltd., 1G (TX to R.X.) by VADO Security Technologies Ltd., BLDPR469EN0918 Hirschmann Rail Data Diode by Belden Inc., among others.


COVID-19 IMPACT


Increasing Number of Cyber-attacks on Oil & Gas and Manufacturing Industries amid COVID-19 to Surge the Product Demand


The coronavirus pandemic created significant challenges as businesses shifted their working models. Businesses are accelerating their digital transitions, and cybersecurity has emerged as a top priority. The pandemic hampered the overall performance of the market, with several market players witnessing financial downturns.


Industries, such as oil & gas and manufacturing, heavily invested in strengthening enterprise cybersecurity solutions amid the rising cases of cyber-attacks during COVID-19. Attributable to recent cyber-attacks on the oil and gas industry, large oil and gas corporations have been forced to implement complete data diode solutions that allow for efficient data flow while maintaining security.


In May 2021, one of the major U.S. fuel pipeline operating companies, Colonial Pipeline, blocked its entire network after a cyber-attack caused by ransomware. The shutdown raised fear of a price spike ahead of the busy driving season and the susceptibility of the U.S. energy infrastructure vulnerable to hackers.


With the rise of digital transformation and the large volume of data processed and produced, as well as the growing demand for remote access and online services, cyber threats have become more prevalent. Over the forecast period, the long-term growth of the global market will be driven by the upfront growth of the manufacturing and oil & gas industries. Moreover, government agencies, critical infrastructure, aerospace, and defense companies are increasingly relying on data diode technology to protect their data and safeguard important assets. This, as in result, is expected to drive the market growth over the forecast period.


LATEST TRENDS


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Growing Trend of IIoT will Contribute to Market Growth


The IIoT has ushered in a digital revolution in industrial technologies. As the internet becomes more widely accessible, the cost of connectivity drops and more devices with built-in Wi-Fi and sensors become available; the industry may benefit from linking industrial devices to construct smart equipment, machines, processes, service vehicles, and more. The IIoT integrates traditional industrial infrastructure with cutting-edge technologies such as edge computing, machine learning, cloud computing, and mobility. The IIoT aids organizations in improving industrial operations to increase output and efficiency. As industries and manufacturing plants become more connected with the growth of IIoT technologies, the possibilities of data theft and cyber-attacks remain the same.


The data diode provides enhanced security for critical infrastructures that rely on sending business data over the internet, such as the chemical industry, manufacturing, oil and gas, and other industries. Employees and security teams may monitor data flow in production systems without exposing the main network to assaults.


Furthermore, electronics manufacturing companies are realizing the importance of protecting mission-critical data. Thus, the expansion of IIoT across sectors is projected to provide market participants with opportunities to improve their solution offerings and embrace a customer-centric business strategy.


DRIVING FACTORS


Rising Prevalence of Major Cyber-attacks on the Oil & Gas Industry to Drive Market Growth


The digitization and penetration of advanced technology in the oil & gas sector have exposed it to various cyber-attacks, including phishing, data breaches, DDoS, and ransomware. Connecting the oil and gas business to more technologically sophisticated solutions such as IIoT has enhanced output and reduced costs. Still, it has also exposed the industry to fatal cyber-attacks. These malicious intrusions can halt a company's operations, resulting in huge financial, reputational, and, in some cases, human life losses, as well as environmental disasters. For instance;



  • In February 2023, Encino Energy, a private oil and natural gas producer in the U.S., reported investigating and remediating a recent cyber-attack.


Such incidents have prompted oil & gas and critical infrastructure companies to strengthen cyber-security measures to safeguard their critical data from potential threats and vulnerability from third-party sources. To offer efficient solutions, key players operating in the market are taking key initiatives to serve companies from data thefts and cyber-attacks better. For instance,



  • In September 2021, Forcepoint, a global cybersecurity and technology company, launched Forcepoint Data Diode, a hardware solution that enables automated and rapid data flow while ensuring security and compliance. Forcepoint Data Diodes provide versatile, easy-to-use, and cost-effective protection for networks, devices, and other digital assets from external cyber-attacks.


Such initiatives by key players are expected to spread awareness about the advantages of data diode in various industries and drive the data diode solution market growth.


RESTRAINING FACTORS


Associated High Costs and Budget Constraints for Small & Medium-sized Enterprises to Hinder Market Growth


The industrial control system has grown over time to encompass a varied range of networked devices that help industry employees understand and analyze the operational environment. With the rise of sophisticated threats and smarter attack tools, better cyber-security solutions are necessary to combat cyber-attacks. Implementation of data diode solutions requires significant upfront investments to set up field-level devices and replace aging cyber-security infrastructure. Also, companies planning to integrate these solutions into their security infrastructure need to make sure that servers, applications, and systems are interconnected.


Cybersecurity and management authorities are particularly concerned about high post-deployment operation and maintenance costs. In addition, limited budgets make it difficult for government agencies and SMEs to deploy advanced technologies and solutions. As a result, market development is anticipated to be restrained in the coming years due to the high initial cost of adopting data diodes.


SEGMENTATION


By Type Analysis


Ruggedized Data Diode to Capture Largest Market Share owing to its Effective Operating Capabilities in Challenging Environments


Based on type, the market is classified into regular data diode and ruggedized data diode.


The ruggedized data diode segment captured the largest market share and is expected to maintain its growth rate over the forecast period. The growth of this segment would occur on account of its effective operating capabilities in challenging environments such as high temperatures and humid environments. These data diodes are expected to gain momentum as companies opt for cyber-security solutions that offer redundant power supply and uniform access over data flow.


The regular data diode segment is expected to witness significant demand. The growth of this diode will be driven by increasing demand among major oil & gas and manufacturing companies.


By Application Analysis


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Critical Infrastructural Industries to Showcase Strong Growth due to Growing Number of Cyber-attacks


Data diode solutions have applications in government, energy and power, manufacturing, oil and gas, aerospace and defense, critical infrastructure, and others.


The critical infrastructure segment captured the largest market share in 2022. Data diodes were deployed mainly across the military and governmental sectors to protect weapon systems and sensitive information. However, in recent years, their use has been extended to critical infrastructure. Data diodes/unidirectional gateways that deployed data across the critical infrastructure sector have attracted consumers globally. The shift has been pushed by the current threat landscape battered by rising hardware vulnerabilities, ransomware attacks, a delicate geopolitical scenario, and supply chain breaches. Thus, the market is expected to witness high adoption of such solutions in the coming years.


The solutions are in high demand among energy and power industries to protect mission-critical data and databases. Hackers target energy and utilities, as well as vital infrastructure, for financial gain. As cyber-attacks on critical power infrastructure become more common, combating them is becoming a concern.


REGIONAL INSIGHTS


North America Data Diode Solution Market Size, 2022 (USD Million)

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Geographically, the market is studied across five major regions, North America, Europe, Asia Pacific, the Middle East & Africa, and South America.  


North America accounted for the largest data diode solution market share and is expected to become increasingly popular due to high level of internet penetration. In addition, the data vulnerability has increased due to wireless networks, making cyber-security an essential and crucial component of companies in the region. Regional companies are constantly developing new solutions to meet the demands of advanced cyber threats. The Cyber-security and Infrastructure Security Agency (CISA) of the U.S. Department of Homeland Security (DHS) have reported a significant increase in malware and attacks using COVID-19-themed lures.


Europe is anticipated to expand at a significant CAGR during the forecast period. Cyber security initiatives and investments by major corporations in countries such as the U.K., France, Germany, Italy, Spain, and others are driving the industry ahead. Significant advances in Europe have come from the rising need for safety solutions and services in the manufacturing and oil and gas industries.


Asia Pacific is expected to grow at the highest CAGR over the forecast period. Several firms in this region focus on developing and launching novel cyber security solutions to address the growing need for security solutions and services. The market growth in Japan, India, China, Korea, and others is expected to experience an exceptional CAGR during the forecast period due to increased investments by key players, governments, and foreign investors.


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The Middle East & Africa and South American countries are expected to witness high demand for the solutions. Due to the strong presence of numerous market players, as well as recent security risks in the region, the regional market is likely to accelerate even further.


KEY INDUSTRY PLAYERS


Key Players are more Focused on Launch of Enhanced Data Diode Solutions and Acquisition Strategies


Data diode solution companies operating in the global market, such as OPSWAT, Inc., Forcepoint, BAE Systems, Siemens Mobility, Owl Cyber Defense, Advenica AB, Belden Inc., Waterfall Security Solutions Ltd., Fox-IT, Rohde & Schwarz GmbH & Co, and Garland Technology, are focused on developing and offering different types of solutions. The companies are focusing on implementing mergers and acquisition strategies to develop solutions that cater to user specific needs.


•          March 2021 - Deep Secure collaborated with Ingram Micro U.K. Ltd., headquartered in Milton Keynes, U.K. This partnership will expand Ingram’s cyber security portfolio with the help of Deep Secure’s Threat Removal Platform to exchange information with high security and provide protection from cyber-attacks.


List of Key Companies Profiled:



KEY INDUSTRY DEVELOPMENTS:



  • September 2022 – Votiro partnered with Owl Cyber Defense to integrate with the company’s hardware-enforced cross-domain and data diode solutions. With this integration, the company aims to ensure secure file transfers into isolated government ministry networks.

  • July 2021 - Knowledge Lens, based in Bengaluru, introduced the 4th Generation of the iLens Data Diode. This solution enables 100% isolation between Information Technology (IT) and Operational Technology (OT). Furthermore, it also enables unidirectional data flow.

  • June 2021 - Garland Technology partnered with Dragos, Inc., a cyber-security solution provider based in the U.S. Through this partnership, Garland Technology aims to strengthen its network TAP products to provide enhanced network security for industrial controls systems (ICS) and operational technology (O.T.) infrastructures.

  • May 2021 - Owl Cyber Defense, a leading data diode company, launched IXD, an individual data diode for critical infrastructure network cyber-security. The newly launched solution is a revolutionary milestone that will help oil & gas, manufacturing, and critical companies safeguard their data and critical assets.

  • March 2021 - Deep Secure, a security solution provider, partnered with Ingram Micro, a distributor of information technology products and services based in California. This partnership will help Deep Secure to strengthen its global footprint and better serve consumers.


REPORT COVERAGE


An Infographic Representation of Data Diode Solution Market

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The research report provides an in-depth analysis of the market. It focuses on key aspects such as leading companies, product Industry, and leading product applications. Besides this, the report offers insights into the market trends and highlights key industry developments. In addition to the factors mentioned above, the report encompasses several key factors that have contributed to the market growth in recent years.


REPORT SCOPE & SEGMENTATION


















































   ATTRIBUTE



  DETAILS



Study Period



2019-2030



Base Year



2022



Estimated Year



2023



Forecast Period



2023-2030



Historical Period



2019-2021



Unit



Value (USD Million)



Growth Rate



CAGR of 12.5% from 2023 to 2030



By Type




  • Regular Data Diode

  • Ruggedized Data Diode



By Application




  • Government

  • Energy and Power

  • Manufacturing

  • Oil and Gas

  • Aerospace and Defense

  • Critical Infrastructure

  • Others (Healthcare, and Others)



By Region




  • North America (By Type, Application, Country)

    • U.S. (By Application)

    • Canada (By Application)

    • Mexico (By Application)



  • South America (By Type, Application, Country)

    • Brazil (By Application)

    • Argentina (By Application)

    • Rest of South America



  • Europe (By Type, Application, Country)

    • U.K. (By Application)

    • Germany (By Application)

    • France (By Application)

    • Italy (By Application)

    • Spain (By Application)

    • Russia (By Application)

    • Benelux (By Application)

    • Nordics (By Application)

    • Rest of Europe



  • Middle East & Africa (By Type, Application, Country)

    • Turkey (By Application)

    • GCC (By Application)

    • Israel (By Application)

    • North Africa (By Application)

    • South Africa (By Application)

    • Rest of Middle East & Africa



  • Asia Pacific (By Type, Application, Country)

    • China (By Application)

    • India (By Application)

    • Japan (By Application)

    • South Korea (By Application)

    • ASEAN (By Application)

    • Oceania (By Application)

    • Rest of Asia Pacific





Frequently Asked Questions

The market is projected to reach USD 1,116.2 million by 2030.

In 2022, the market stood at USD 437.1 million.

The market is projected to grow at a CAGR of 12.5% over the forecast period (2023-2030).

By application, the critical infrastructure segment is likely to lead the market.

The rising prevalence of major cyber-attacks on the oil & gas industry is one of the key drivers for the market growth.

OPSWAT, Inc., Forcepoint, BAE Systems, Siemens Mobility, Owl Cyber Defense, Advenica AB, Belden Inc., Waterfall Security Solutions Ltd., Fox-IT, Rohde & Schwarz GmbH & Co, and Garland Technology are some of the top companies in the market.

North America is expected to hold the highest market share.

Ruggedized data diode segment is expected to grow with the highest CAGR over the forecast period.

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