Logical Security is a cluster of software and services which work together in order to shield an enterprise’s infrastructure from security breaches. Data center logical security is a combination of solutions and services which protects data center infrastructure from any cyberattack. Continuous expansion of the global data center network is the major factor behind the growing demand for data center logical security solutions and services. As the global communication and technology industry across various regions/countries is growing at a remarkable rate with rising global IT spending, the expansion of global data center network is bolstering the market growth of data center logical security. The figure given below shows the year-on-year increase in global IT spending for years 2018 and 2019:
Global It Spending, in US$ Trillion
Source: Knowledge Sourcing Intelligence Analysis
As the penetration of digital technologies is accelerating across all major industry verticals including media and entertainment, retail, and BFSI, enterprises of all sizes are investing heavily into their IT infrastructure. This, in turn, leading to a continuous rise in the volume of big data generated per day across the globe. Since very high volumes of data packets travel through networks every day, this rise in big data volume is creating demand for more storage space which can offer high degrees of data availability and security. As a result, enterprises across the globe are increasing their spending on data centers.
With high proliferation of smartphones and better internet connectivity, number of people of all age groups using different social media platforms is also increasing, creating huge volumes of data. As a result, these social media companies are funnelling huge investments in data centers to store this massive amount of big data. Social media giant, Facebook, for instance, owns more than 300 PB of data, which it stores in its huge data centers.
However, with growing adoption of digitalization across various industries, the threat of cyber-attacks such as phishing attacks and SQL Injection attacks has also surged causing companies huge financial as well as goodwill loss. For instance, in March, 2019, Capital One, one of the key players in the BFSI sector in the United States, suffered a severe data breach as part of which, around 106 million records got compromised (Source: NortonLifeLock Inc.). As part of this breach, personal information like names, phone numbers, ZIP codes, self-reported income, credit scores, bank balance, credit limits, and transaction history among others of many customers got hacked by hackers. Although Capital One cleared that details like credit card account numbers and log-in credentials of customers were not compromised, this breach turned out to be very costly for the company. From examples of Equifax, which had to pay around $700 million to the regulators for the breach it suffered in 2017, and social media giant Facebook, which reportedly paid $5 billion to the FTC over its much talked about Cambridge Analytica scandal, it is clear that security breaches can turn out to be very shattering for enterprises. Interestingly, threats like these are witnessing a continuous increase year over year. According to the Kaspersky, its web antivirus platform identified 24,610,126 malicious objects in 2019, up from 2018 by 14 per cent. As more and more of these incidents are taking place, especially across BFSI and healthcare sector, across the globe, adoption of advanced and breach-proof logical security solutions and services for data centers is increasing among them, thus propelling the market growth.
The increasing risk of getting hit by a cyber-attack is also being contributed to by growing popularity of cloud across the globe. The figure given below shows the impressive growth we are expecting the cloud storage market to witness till the year 2022:
Global Cloud Storage Market, in US$ Billion
Source: Knowledge Sourcing Intelligence Analysis
These estimates do not include the impact of COVID-19 on the market growth. As pandemic continues to affect businesses across the globe, businesses are increasing the adoption of digital technologies which can provide them enough scalability and flexibility to survive the pandemic. Increasing adoption of cloud across the globe is increasing the risk of data on cloud getting accessed by unauthorized users. As a result, cloud growth is driving with it the adoption of robust data center logical security solutions and services by customers, thus propelling the market growth.
Geographically, the North America and Europe markets have remained key contributors to the global market and the market share these regions hold is expected to remain significant over the period 2020-2025. One of the primary reasons for the market growth is stringent regulations regarding data security in these regions and strict enforcement of these laws by enforcement bodies. Enforcement of GDPR, for instance, has remained solid till now and as its scope includes every enterprise which stores information about European customers, regardless of its country of incorporation, adoption of logical security solutions for data centers has also shown an impressive increase since this law came into effect. As many countries in these two regions have environment which is favourable for setting up data centers, they are witnessing inflow of investments into them, thus contributing to the market growth. Asia Pacific holds a lot of potential in this market and the regional market is poised to show a good growth over the medium and long term. Rapid growth of industries in this region, supported by continuous investments by enterprises which see growth potential here, coupled with increasing adoption of practices like data center colocation is increasing the need for robust logical security solutions and services for data centers. This is increasing the adoption of these solutions and services, thus fuelling the market growth.
About the Author:
Dhiraj Kumar Sharma is a Market Research Analyst at Knowledge Sourcing Intelligence. He combines his outright understanding of technologies with years of experience working in the industry to deliver actionable information to clients who span across industries and geographies. Dhiraj often works closely with clients in order to better understand their requirements and is known for the quality of market insights he delivers to them.