Increasing adoption of digital technologies, including web-based services such as online education and banking, has accelerated the use of smartphones among individuals. In turn, the demand for security of such technologies against cyberattacks has grown. Various governments across the globe have imposed stringent laws in order to ensure secure environments and maintain privacy for connected devices. In addition, several enterprises are focusing on implementation of Internet of Things (IoT)-based solutions, encouraging employees to bring their own devices for flexibility.
In its recent research, Future Market Insights (FMI) projects the global IoT security product market to register a staggering expansion of 14.9 percent CAGR through 2027. In 2017, the market accounted for revenues worth approximately $12 million, and it is further estimated to reach nearly $50 million by the end of 2027. This growth is primarily attributed to continuous launches of IoT security offerings by enterprises, the soaring number of service providers and emergence of niche players in the market.
North American Dominance
North America will remain dominant in the global IoT security product market, with revenuces estimated to reach nearly $16 million by the end of 2027. Government organizations across North America have entered partnerships with major technology companies in order to implement IoT across urban cities. These organizations are also providing funds to technology vendors for development of IoT applications. In addition, increasing smart city projects in North America has led to a significant adoption of sensor applications.
A number of government authorities have issued guidelines to be followed by IoT device manufacturers for protection against cyberattacks on IoT devices and networks. However, several device manufacturers and users are not adhering to these guidelines, ignoring precautionary measures. This has resulted in security lapses and incurring challenges for IoT security solutions providers, which is expected to restrain growth of the market in North America.
Fast Expansion in Asian Pacific
The Asian Pacific region, excluding Japan (APEJ), will continue to be the fastest growing market for IoT security products, registering a high double-digit CAGR through 2027. A growing number of connected devices is leading toward expansion of the IoT ecosystem in APEJ. This is further prompting the region’s leading companies to develop services and platforms, helping them in efficient management and analysis of real-time data streams gathered from multiple data sources. These companies are now focusing on IoT data analytics, and setting up strategies for procuring and deploying adequate tools in order to enable successful IoT adoption and real-time analysis of operations.
With rapidly changing technologies, enterprises are faced with difficulties in deploying technology-specific networks, which, in turn, is expected to impede market growth in the APEJ region. In addition, rapid adoption of IoT among enterprises has led to a surge in cyberattacks, owing to increasing internet exposure to a number of devices. This has further resulted in a higher likelihood of cyber threats, which, in turn, is estimated to inhibit growth of the IoT security product market in APEJ.
Manufacturing Remains Largest Vertical
Manufacturing is estimated to remain the largest vertical for IoT security products in the global market. Revenues amassed from sales of IoT security products in manufacturing are expected to reach about $15 million by the end of 2027. In addition, healthcare will be the fastest growing vertical in the global IoT security products market, followed by energy and utility and transportation and logistics.
Although smart grid will remain sought-after among applications, home and building automation is expected to witness the fastest market expansion through 2027. Revenues amassed from smart grid and home and building automation applications of IoT security products will collectively account for revenues worth $26.7 million by the end of 2027.
Meanwhile, network security will remain the preferred solution for IoT security products, with sales anticipated to account for nearly $15 million by the end of 2027. End-point/device security will continue to be the second-largest solution for IoT security products. In addition, vulnerability management solutions for IoT security products will register the fastest expansion through 2027.
In terms of components, software will continue to retain its dominance in the global IoT security product market, with sales expanding at 15.2 percent CAGR through 2027. In addition, sales of hardware in the market is expected to surpass revenues worth $20 million by the end of 2027.
Swapna Supekar is a senior associate consultant with Future Market Insight. FMI is headquartered in London and has delivery centers in the United States and India.