Global Data Center Logical Security Market: Because Physical Security Is Not Enough

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, as the term suggests, is a combination of solutions and services which protects data center infrastructure from getting hit by any attack other than physical attacks.

data center logical security market

These solutions and services have been popular among end users from a very long time and the market growth is majorly attributed to continuous expansion of the global data center network. Robust growth of communication and technology industry across all key regions worldwide has remained one of the major factors accelerating this expansion of the global data center network. 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

data center logical security market

Source: Knowledge Sourcing Intelligence Analysis

Clearly, enterprises of all sizes are pumping huge investments into their IT infrastructure. Increasing penetration of digital technologies into business functions across all major industry verticals like BFSI, Retail, and Media and Entertainment among others spanning across all key regions worldwide is adding to the already huge volumes of data generated per day. Since very high volumes of data packets travel through networks every day, demand for more storage space which can offer high degrees of data availability and security are also increasing. This is pushing enterprises to spend more on data centers. Social media giant, Facebook, for instance, owns more than 300 PB of data, which it stores in its huge data centers. As this volume of data continues to surge, on account of increasing use of social media by people of all age groups across the globe, the social media is making significant investments into data centers. Similarly, many enterprises across all major industries see investments into data centers key to business function digitization and their business growth. Continuous evolution of cyber-attacks like phishing attacks, and SQL Injection attacks among others and coming into light of many other types of attacks continue to pose a severe risk to the security data being stored in data centers. This is driving the adoption of logical security solutions and services in data centers across the globe, thus fuelling the market growth. Rapidly changing trends involving continuous drift of enterprises towards cloud are further elevating the risk of security breaches in cloud data centers.

According to estimates by Knowledge Sourcing Intelligence estimates, the global cloud storage market was valued at US$25.171 billion in 2017 and is expected to grow at an impressive CAGR of 29.73% till 2022. Increasing spread of the COVID-19 pandemic is expected to further boost this market growth as many companies are looking to minimize their costs by leveraging the flexibility and scalability offered by cloud. Security breaches in such environments can bring huge monetary losses to enterprises along with costing them bigger losses associated with erosion of customer confidence and productivity as result of the breach. One such event occurred in August, 2013, when sensitive information of around 3 billion Yahoo user got leaked as a result of a data breach. This attack costed Yahoo more than $350 million in conjunction to loss of customer trust. Many enterprises like Sony, JP Morgan and eBay among others have also suffered losses associated with security breaches and impact of these attacks reflected clearly on their business. As these incidents are being taken as lessons by many other enterprises 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.

Strict laws associated with security of data stored with enterprises are also fuelling the adoption of logical security solutions and services for data centers. European General Data Protection Regulation (GDPR), for instance, is applicable to all enterprises, irrespective of the country they are based in, which collect and store data about customers in Europe. The law has made it mandatory for all such companies to safeguard the data from any kind of attack and store every bit of information of every customer in a way which allows them to modify or remove any part of it when asked by the customer to do so. Compliance to this regulation is very critical for all enterprises falling in the scope, as non-compliance with this law can lead to a heavy penalty of €20 million or 4% of the concerned company’s annual revenue from all markets across the globe, whichever is higher. As these losses are high enough to affect the performance of a company in a market, adoption of robust logical security solutions and services for data centers is increasing, thus driving the market growth.

North America and Europe account for a significant share in the global data center logical security market and these regions are expected to continue contributing significantly to the market growth. These regions account for a major share in the global data center market, which means these regions have been lucrative for enterprises looking to set up their data centers. This is mainly because of availability of a robust technology infrastructure in these regions which adds to the reliability and security of data centers. Furthermore availability of resources required for proper working of a data center in these regions is also contributing to their lucrativeness as promising geographies for setting up data centers. In conjunction to this, these regions have been showing an impressive growth in data center colocation market. The figure given below shows the growth in European data center colocation market:

Europe Data Center Colocation Market, in US$ Billion


data center logical security market

Source: Knowledge Sourcing Intelligence Analysis

Large number of data centers present in these regions, including enterprise data centers, colocation data centers and cloud data centers, coupled with stringent enforcement of data security laws across them are pushing the adoption of advanced data center logical security solutions and services among customers, thus propelling the market growth. The Asia Pacific data center logical security market is expected to show a rapid growth till 2025. The market growth in this region will primarily be driven by rapid growth of industries and increasing digitization across them.

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.