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

The global confidential computing market size was valued at USD 7.15 billion in 2023. The market is projected to grow from USD 13.33 billion in 2024 to USD 350.04 billion by 2032, exhibiting a CAGR of 50.5% during the forecast period.

The process of confidential computing entails the segregation of data within a secure Central Processing Unit (CPU) while it is being processed, in order to offer protection against internal threats, network weaknesses, and other technological risks. It includes both software and hardware-based security measures for businesses that utilize a cloud computing infrastructure.

The use of computing technology involves a new security approach that involves encrypting workloads while processing files, restricting access, and ensuring comprehensive data protection. The importance of this technology is growing with the emergence of cloud computing. Major players in the industry are introducing new products in their confidential computing portfolios. In 2020, Microsoft and Google, launched confidential virtual machines. Additionally, Amazon Web Services announced the availability of Nitro Enclaves, expanding the basic confidential computing capabilities of the Nitro System.

• In October 2022, Google Cloud unveiled Confidential Space, a secure and isolated environment for companies to carry out collaborative activities. Furthermore, Intel upgraded its confidential computing service with Project Amber and launched a customer pilot in 2022 to establish a multi-cloud, multi-TEE service for third-party authentication.

Security and privacy have been a top priority during the COVID-19 pandemic. Many businesses implemented remote work policies and transitioned to cloud services at a growing rate. The rising usage of cloud services has sparked worries about data security during processing. However, cloud providers are embracing confidential computing to adhere to regulatory standards.

CONFIDENTIAL COMPUTING MARKET TRENDS

Expansion of Multi-Cloud and Hybrid Environments to Propel Demand for Confidential Computing Solutions

In recent years, it has been witnessed that firms are increasingly adopting multi-cloud and hybrid-cloud strategies.

• As per S&P Global Market Intelligence Analyst Guest Blog, a survey reported that a significant percentage of firms (76%) have been using two or more public clouds, with the average having 2.3 clouds in use. It was observed that large enterprises showcased even higher percentages of multi-cloud use. The revenue figures were more than USD 1 billion in revenue, which is twice as likely to be using three or more clouds as smaller companies.


• As per IDC, over 55% of the G2000 are expected to adopt multi-cloud platforms with the aim of allowing active migration between hyperscalers to minimize vendor dependencies, enhance governance, and improve costs by 2025.

This rising inclination of end-users toward adopting multi-cloud and hybrid-cloud strategies is driving the need for consistent and secure data processing across several environments. Confidential computing solutions provide secure data processing regardless of the environment.

Thus, the increasing inclination of end users to adopt hybrid and multi-cloud strategies is driving the demand for confidential computing solutions.

MARKET DYNAMICS

Market Drivers

Advancements in Secure Hardware Enclaves and Software Segmental Growth Propels Market Growth 

In addition, there are several advancements in secure hardware enclaves by companies such as Intel, Arm, and AMD, which have made it easier for businesses to implement confidential computing.

The software segment is another major factor driving the market in recent years. The software segment includes technologies that are used to manage and adopt TEEs and TEE-based use cases. In addition, the services are at their early proof of concepts and are expected to rise in the coming years, thereby significantly impacting the market. This segmental demand is accelerated due to factors such as an appetite for new revenue generators, expanding regulations, and demand for comprehensive security postures.

• As per the insights from Confidential Computing Summit 2024, three reasons that could amplify confidential computing awareness are enhancing the user experience of existing solutions, accentuating the business value of the market, and enabling developers to develop applications that leverage confidential computing.

Market Restraints

High Implementation Costs Associated with Confidential Computing Solutions Hinder Market Growth 

The market's key restraining factor includes high implementation costs associated with confidential computing solutions.

One of the primary barriers to the widespread adoption of confidential computing is the high cost associated with the technology implementation. Setting up secure hardware enclaves and maintaining a secure processing environment requires a significant investment in dedicated hardware, specialized software, and related services.

Such investments can be particularly challenging for small and medium-sized enterprises that may lack the resources to invest in such advanced security measures. Moreover, as the confidential computing market is still evolving, there is a lack of standardized frameworks and protocols. Several vendors provide their own versions of secure enclave technologies, further leading to potential compatibility concerns. This approach also raises a lack of interoperability between solutions.

Market Opportunities

Adoption of Confidential Computing Solutions across Emerging Markets and Industries Creates Lucrative Opportunities for Market Players

As digitalization is spreading across several emerging markets, the need for secure computing solutions is becoming more prevalent. In particular, for markets and industries such as manufacturing, government, and public sector, it is expected that the adoption of confidential computing will grow significantly.

• In manufacturing, confidential computing can be used for securing trade secrets in collaborative projects. Manufacturers often collaborate with partners, suppliers, and even competitors on R&D projects. This collaboration involves the sharing of sensitive data, which requires a high level of trust, and any instance of data leak can result in significant financial loss.


• In the government and public sector, there is a constant demand for sharing of sensitive and mission-critical data, which needs to be secured at all costs. To gain secure data processing between government and other agencies, government firms are expected to adopt confidential computing solutions on a larger scale.

Thus, it is expected that market players can leverage these requirements from these sectors and develop tailored solutions to enhance customer experience.

SEGMENTATION ANALYSIS

By Component Analysis

Increasing Use of Cloud Environments Boosts Demand for Hardware Components

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

The hardware segment is expected to have the highest CAGR over the forecast period, driven by the expansion of regulations, the need for comprehensive security measures, and the growing use of cloud environments. Hardware elements are developed to improve the security of sensitive data by protecting it during processing. With increasing concerns about data privacy, the demand for hardware solutions is anticipated to rise even further.

The software & services segment held the largest market share in 2023. The confidential computing software is responsible for managing memory resources within secure enclaves to ensure data isolation and protection. It offers mechanisms for allocating, managing, and encrypting memory regions associated with enclaves to prevent unauthorized access or tampering. Additionally, services assist businesses in designing and integrating computing solutions into their existing infrastructure. They also aid businesses in identifying use cases to ensure the seamless integration of TEEs or secure enclaves in the overall system design and in developing architecture blueprints.

By Deployment Analysis 

Organizations Implementing Work-from-Policies Increased Use Usage of Cloud

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

Cloud deployment is anticipated to demonstrate the highest CAGR in the forecast period, as organizations are transitioning their data workloads to the cloud. As a result of the pandemic, organizations implemented work-from-home policies, prompting them to move their data to the cloud. The increasing demand for cloud-based solutions is fueling market growth.

Enterprises continue to depend on on-premises deployment because of concerns about data sensitivity and security risks. Enterprises choose to maintain control of KMS within their on-premise data centers.

By Enterprise Type Analysis 

Large Enterprises Segment is Leading Owing to their Increasing Adoption of Confidential Solution

By enterprise type, the market is segmented into large enterprises and Small and Mid-sized Enterprises (SMEs).

Large enterprises held a maximum confidential computing market share in 2023 and is estimated to grow with the highest CAGR over the forecast period. Large corporations depend on computing solutions because they offer enhanced assurance that their data remains secure and private when stored on the cloud. This also safeguards data, extends the advantages of the cloud to sensitive workloads, secures intellectual property, and facilitates secure collaboration with partners on innovative cloud solutions. Additionally, it alleviates worries about selecting a cloud provider and safeguards data processes at the edge.

The adoption of confidential computing technology poses a challenge for SMEs due to the substantial investment required. The specialized hardware needed includes dedicated processors and secure enclaves to ensure the security and privacy of data and computations.

By Application Analysis 

Multi-party Computing Is the Leading Application Driven by their Benefits of Online Accessibility of Assets

The market is segmented on the basis of application into privacy & security, blockchain, multi-party computing, IoT & edge, and personal computing devices.

The multi-party computing application is expected to witness the highest growth in the next few years, due to its ability to assist businesses in minimizing the risk of single points of compromise and facilitating compliant instant digital asset transactions. Multi-party computing offers the benefit of keeping assets accessible online for real-time transactions, enabling multiple parties to engage in transactions while fulfilling privacy and policy mandates.

The privacy & security application held the largest market share in 2023. The increasing awareness about data privacy is expected to have a significant impact on the formulation of new government regulations, thereby driving the uptake of confidential computing solutions. Stringent measures on data privacy initiated by several governments worldwide, will, in turn, boost the market.

By Industry Analysis

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Growing Focus on Enhancing Supply Chain to Surge Adoption in Manufacturing Sector 

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

The manufacturing sector is projected to witness the highest CAGR during the forecast period. Confidential computing in manufacturing is expected to enhance the supply chain visibility and improve collaboration among stakeholders across the value chain. Manufacturing enterprises are expected to adopt confidential computing to supplement collaborative use cases such as Multi Party Computing (MPC) and real-time supply chain tracking/provenance.

The BFSI industry accounted for the largest market share in 2023. By using confidential computing, financial institutions gain the ability to work together and share their insights on money laundering and digital fraud patterns, leading to the creation of advanced algorithms for fraud detection. Banks and other financial institutions rely on the trust of their clients, which is crucial for attracting and retaining business.

• In September 2024, NTT DATA and IBM announced to enhance their collaboration by introducing SimpliZCloud, a novel hybrid cloud service designed to cater to the computational requirements of financial services firms in India. The service incorporates confidential computing capabilities to safeguard data during its usage, as well as encryption features to ensure the security of data both at rest and in transit.

CONFIDENTIAL COMPUTING MARKET REGIONAL OUTLOOK

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 various countries.

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North America

According to our analysis, North America generates a maximum revenue share and is estimated to showcase high growth rate during the forecast period. This is due to the significant presence of local cloud hyperscale providers in the U.S. One of the key drivers for market growth in the region is the increasing demand for security and efforts to address cyber threats among the countries in North America. Governments in the region are prioritizing the development and adoption of innovative cybersecurity approaches, leading to a surge in the demand for security solutions.

In 2022, there were approximately 817 documented data breaches in the U.S. For instance, a U.S. pharmaceutical company, Pfizer, accidentally exposed the personal information of American prescription drug users in a data breach linked to insecure cloud storage. The average cost of a data breach in the U.S. is around USD 9.44. Such factors are contributing to the growth of the North American market.

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The U.S. confidential computing market growth is experiencing a strong upward trajectory due to increased recognition of data privacy threats and strict regulatory standards. Businesses are progressively integrating confidential computing technologies to safeguard sensitive data at every stage, from processing to storage. This movement is stimulating the development of secure computing solutions and encouraging partnerships between major tech companies and cybersecurity firms to address the rising need for strong data protection measures.

South America

South America’s confidential computing market is estimated to witness a progressive growth during 2024 to 2032. Countries in South America have recorded some achievements over the past few years. There is also growing acceptance of digital technologies in both government and corporate sectors such as healthcare, retail and automotive. Government organizations and agencies have been at forefront in adopting confidential computing solutions. One of the most serious threats government agencies are facing today is state-sponsored cyber warfare, which is occurring against the backdrop of rising geopolitical and geo-economics tensions.

• The Brazilian Association of Software Companies (ABES) reported that in 2023, the expenditure on security solutions in Brazil amounted to approximately USD 1.3 billion, marking a 13% increase from 2022. IT and data security are expected to remain as key focal points in Brazil.

Europe

The adoption in the region is expected to be driven by European markets such as Germany, the U.K., France, Spain, and Benelux. Growth in the region will be driven by factors such as the push for regulatory compliance including GDPR, increasing privacy concerns, and the use cases for AI/ML adoption.

Data from Eurostat displays that in 2022, 22% of businesses in the EU encountered ICT security issues, leading to problems such as the unavailability of ICT services, data destruction or corruption, and exposure of confidential information. Europe is incorporating confidential computing into its cloud infrastructure as a fundamental step toward achieving technological independence, while staying true to its principles of privacy and security.

Middle East & Africa

Digital adoption is gaining momentum as the Middle East country's governments are executing multiple national initiatives. The governments are conducting digital technology adoption programs supported by technologies such as the internet of things, cloud computing, artificial intelligence, and machine learning. The UAE is focused on long-term investment in the digital economy by developing in the areas of advanced technologies such as artificial intelligence and cloud computing post-pandemic.

Asia Pacific

Numerous companies in Asia Pacific are focused on developing and launching cutting-edge cybersecurity solutions to address the growing demand for security services and solutions.

• In June 2024, there was an announcement from Amazon Web Services (AWS) about a plan to invest USD 9 billion in Singapore over the next five years. The investment aims to improve its cloud services and infrastructure and is a part of AWS' continuous expansion in Southeast Asia. In October 2022, AWS revealed a 15-year plan to invest USD 5 billion in a cloud facility in Thailand.

Thus above mentioned scenarios are likely to further propel the demand for confidential computing in the years to come.

COMPETITIVE LANDSCAPE

KEY INDUSTRY PLAYERS

Key Players Focus on Developing Innovative Solutions to Intensify Competition

The market position of key participants is reinforced through the introduction of new products. Furthermore, companies are expanding their product portfolio and accomplishing organizational objectives through partnerships and collaboration strategies. Advanced technology solutions such as AI, Machine Learning (ML), and cloud are now being utilized by top companies to enhance their products and provide improved solutions.

Major Players in the Confidential Computing Market

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The global confidential computing market is consolidated, with the top 5 players accounting for around 70% of the market share. These players sell products through their offices in these regions, while some use a multichannel distribution approach to sell their products to numerous end-user businesses.

List of Key Confidential Computing Market Players Profiled:

• Intel Corporation (U.S.)


• Microsoft Corporation (U.S.)


• IBM Corporation (U.S.)


• Alphabet Inc. (U.S.)


• Alibaba Group (China)


• Advanced Micro Devices, Inc. (U.S.)


• Arm Limited (U.K.)


• Edgeless Systemss (Germany)


• Fortanix (U.S.)


• Anjuna Security, Inc. (U.S.)


• DECENTRIQ (Switzerland)


• Profian (U.S.)


• NVIDIA Corporation (U.S.)


• phoenixNAP (U.S.)


• Evervault Inc. (U.S.)


• T-Systems International GmbH (Germany)


• Amazon Web Services, Inc. (U.S.)


• Duality Technologies (U.S.)


• Swisscom (Switzerland)


• Alpha3 Cloud (U.S.)


• OVHSAS (France)

KEY INDUSTRY DEVELOPMENTS:

• August 2024: Fortanix reported enhancements to its Data Security Manager by adding file system encryption with the aim of accelerating full-stack data security. With this, the company expects to complement full disk encryption through the capabilities of securing separate file systems on particular hosts through encryption ruled by granular decryption policies.


• April 2024: Cohesity completed its strategic collaboration with Intel with the aim of leveraging the company’s confidential computing expertise to the Cohesity Data Cloud. Cohesity’s cyber vault service, built with Fort Knox, is an advanced and first-of-its-kind in the data management ecosystem. Both companies are collaborating with the aim of reducing their end user’s risk of cyber threats. They are majorly targeting sectors such as healthcare, financial institutions, and government, where cyber security is very critical.


• November 2023: Anjuna Security, Inc. introduced a versatile confidential computing platform known as "Anjuna Seaglass". This platform is cloud-based and compatible with server chipsets, and it can operate across different application architectures.


• September 2023: Intel introduced an attestation service to enhance the company's confidential computing portfolio. This service provides a comprehensive evaluation of Trusted Execution Environments (TEEs) in different deployment modes.


• April 2023: Microsoft extended its private VM family by launching the D and E Cesv5-series in preview. These VMs, which are equipped with Intel 4th generation Xeon Scalable processors, are supported by Intel Trust Domain Extensions (TDX), a hardware-based Trusted Execution Environment.

INVESTMENT ANALYSIS AND OPPORTUNITIES

Several small-sized operating companies are securing funds in order to speed up and enhance their confidential computing ecosystem. These companies also use these funds to expand team member size and focus on innovation in relation to the market. Companies that opt for supporting businesses in the financial community bolster their efforts in developing technologically advanced solutions and a global customer base. For instance,

• In August 2023, Anjuna secured funding of around USD 25 million in a Series B2 financing round with the aim of bolstering and expanding its confidential computing solutions for AI. AI Capital Partners, M Ventures, Darmstadt, SineWave Ventures, and others, headed the round. The round also witnessed equal participation from existing investors Insight Partners, Founder Collective, and others.

REPORT COVERAGE

The report provides a detailed analysis of the market and focuses on key aspects such as leading companies, product types, and leading applications of the product. Besides, it offers insights into the market trends and highlights key industry developments. In addition to the factors above, it encompasses several factors that contributed to the growth of the market in recent years.

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REPORT SCOPE & SEGMENTATION