Market Overview:

Global Optical Encryption Market size was valued at USD 3.64 billion in 2022 and is projected to reach USD 7.01 billion by 2030, growing at a CAGR of 8.54% from 2023 to 2030.

The main things that are making the optical encryption market grow are the rise in cyberattacks, the rise in worries about data safety and security, and the rise in investments in smart city projects by different governments. Effective security of a network depends on multiple levels of defense along the path of the network as well as at the core and edge of the network. However, most organizations focus most of their security on the user and application ends, which are the most important parts of protection. Data that is moving through the network.

Also, the widespread use of cloud computing apps for hosting, processing, and storing data has made it more likely that sensitive data will be sent over networks, which adds to the costs of data loss. The market is growing because the number of data leaks is going up. For instance, in 2019, 218 million data records from Zynga, Facebook, Adobe Creative Cloud, and Capital One Financial Corporation were said to have been exposed because their data had leaked.

Also, the rise of the optical encryption market is fueled by the many benefits of optical encryption, such as more people using the internet, more data traffic, lower costs, less latency, high bandwidth efficiency, better performance, and high availability. Also, the fact that more data is being sent over longer lengths via radio waves, like 10G, 40G, and 100G, has led to the use of optical encryption to protect large amounts of data that are traveling between countries. For instance, in January 2020, BGN Technology, which used to be a company run by Ben-Gurion University of Negev, released an all-optical stealth encryption technology that it says makes network communication in data centers and cloud computing much safer and more private.

Recent Development

• In May 2018, ADVA said that its optical encryption technology, ConnectGuardTM, had been used by a number of large Swedish banking companies to protect data and provide strong security.
• In December 2018, Infinera, a company known for making smart transport networks, revealed that its universal switching platform, mTera®, now has the new layer 1 Optical Transport Network (OTN) data encryption capabilities. With this new method, the communication networks should be safer and customer data should be safe from cybercrime, which is a global danger.

Key Market Updates:

• In January 2021, Cisco Systems Inc. and Acacia Communications will merge. This will help Cisco's "Internet for the Future" plan to provide world-class coherent optical solutions.
• In April 2020 Tasmanian Network Pty Ltd. chose the Wavelogic Ai coherent optical system from Ciena. This was done to meet the growing need for bandwidth caused by IoT, 5G, and data center services, so that end users could complete mission-critical jobs. Wavelogic Ai is a coherent optical system that increases the capacity and efficiency of Tasmanian Networks' network by 42 to 24.
• In December 2019, Acacia Communications, a major provider of high-speed coherent optical interconnect products, said that a pluggable coherent CFP2-DCO module that can send data at speeds between 100 Gbps and 200 Gbps was now available to everyone. Acacia made this module to help cloud and communications companies lower operational and capital costs, expand their reach, and get high-capacity solutions to market faster.

By 2030, the market for optical encryption will be worth $9.1 trillion.

In the changed business environment after COVID-19, the global market for optical encryption, which was estimated to be worth US$4.4 Trillion in 2022, is expected to reach a revised size of US$9.1 Trillion by 2030, growing at a compound annual growth rate (CAGR) of 9.6% over the analysis period of 2022-2030. One of the segments looked at in the report, Layer 1 (OTN), is expected to grow at a CAGR of 10.8% and hit US$2.1 Trillion by the end of the analysis period. Taking into account the continuing recovery from the pandemic, the CAGR for the next 8 years for the Layer 2 (macsec) segment has been changed to 9.7%.

The U.S. market is estimated to be worth $1.4 trillion, while China is expected to grow at 11.2% CAGR.

In the U.S., the optical encryption market is expected to be worth US$1.4 Trillion in 2022. The second biggest economy in the world, China, is expected to have a market size of US$1.5 Trillion by 2030. This is based on a CAGR of 11.2% from 2022 to 2030. Japan and Canada are two other important geographic areas. Each is expected to grow by 7.1% and 8.4% between 2022 and 2030. Germany is expected to grow at a CAGR of about 9.9% within Europe.

Market Dynamics:

 What Drives the Market

With the improvements in optical networking technology that make it possible to send a lot of data, a lot of data quickly, and with a high bandwidth, the risk of data leaks and breach has also become a major problem. Optical networking companies have added end-to-end encryption features to make their networks safer. The global market for optical encryption is likely to be driven by the growing need for security. Optical encryption uses new technology to encrypt users' data as it moves from one endpoint to another. This is approved by the Federal Information Processing Standards (FIPS). The system encrypts all in-flight data for all users at the optical level, which gives the most security and throughput and can be easily put into place to cut down on latency. These changes in technology tend to make the market grow.

The market for light encryption in IoT and mobile devices is likely to grow as the government works to build smart towns in key parts of the country. The goal of transferring a lot of data, high bandwidth, and quickly was also a big deal, as was the risk of data leaks and breaches. Ciena Corporation, a major provider of communications networking equipment and software in the United States, has made WaveLogic Encryption, a programmable 100G/200G optical encryption solution, available. This is in addition to building smart cities with the latest technology. It uses years of experience in both coherent optics and transport layer cryptography to make a solution that is easy to put into place. Customers can now set up 10G, 100G, or 200G encryption services across their entire system more easily than ever before. This means they no longer need to buy expensive encryption boxes for each application. Your own program over the network. The optical encryption market tends to grow because of these changes.

Market Challenges

Lack of network reliability is one of the biggest problems in the world market for optical encryption. Even though there have been improvements in solutions for encrypting data in flight, network infrastructures are still not very stable, and network-based access is still restricted. As the number of networking rules grows, it gets harder for users to run their networks. This has made it hard for people to use optical encryption solutions, which is likely to slow the growth of the optical encryption market over the next few years. Also, changes in how governments protect data in different parts of the world tend to limit their use and make it hard for the optical encryption market to grow.

Acquisitions, new tech releases, and partnerships

• Cisco Systems Inc. and Acacia Communications merged in January 2021. This will help Cisco's "Internet for the Future" plan offer world-class coherent optical solutions.
• In December 2019, Acacia Communications, a top maker of high-speed coherent optical interconnect products, made its pluggable coherent CFP2-DCO module available to everyone. This module can send data at speeds between 100 Gbps and 200 Gbps. This module was made by Acacia to help cloud and telecommunications providers lower their operational and capital costs, expand their reach, and speed up the time it takes to get high-capacity options on the market.

Market Segments:

By layer:

• OTN or Layer1

Layer-One, which stands for Optical Transport Network, is a type of medium that uses light to send data. It is used in communication networks that span long distances, like those between cities or across countries. Its major benefit is that it can carry a lot of data at a fast speed because it has a high bandwidth. Layer-One optical encryption uses this feature of light to encode information in a way that makes it hard for people who aren't supposed to be able to read it to get it. Because of this, it is an important tool for keeping private information safe in communication networks.

• MACsec or Layer 2

MACsec or Layer is a type of optical encryption that uses the media access control layer of the OSI model to secure data communications. MACsec encrypts and authenticates all packets at the MAC layer, ensuring that only authorized devices can access the network. MACsec is often used in conjunction with other security measures, such as firewalls and intrusion detection systems, to provide a comprehensive defense against threats.

• IPsec or Layer 3

IPsec, also known as Layer, is an industry-standard system that makes it possible to talk securely over an IP network. It encrypts and verifies data bits to make sure that only people with permission can access the information. IPsec also lets businesses connect remote locations and mobile workers to the company network in a safe way.

By Type:

Less than 10G, Greater than 10G and less than 40G, Greater than 40G and less than 100G, and Greater than 100G are the market segments based on Data Rate. In 2017, the greater than 10G and less than 40G data rate segment held the largest market share in optical encryption. This is due to the widespread adoption of optical encryption in industries such as BFSI, government, healthcare, and energy and utilities, where the average data transit rate is between 10G and 40G.

The market for optical encryption greater than 100G is anticipated to grow at the highest CAGR during the forecast period. This expansion can be ascribed to the need for encryption rates to align at speeds greater than 100G for all packet sizes in order to meet the demand for increased bandwidth brought on by cloud services, mobile devices, and massive increases in video traffic.

By Application:

In 2017, the banking, financial services, and insurance (BFSI) vertical held the greatest market share. Increasingly, the BFSI sector is deploying optical encryption to defend their customers, meet government and industry data security compliance standards, facilitate security auditing, and prevent reputational harm from data breaches. During the forecast period, the data center and cloud market for optical encryption is expected to grow at the maximum CAGR. A growing number of networked devices, consumers, and business processes in general rely on data centers for storage, communications, and networking. The increasing significance of data analytics has increased the worth and expansion of data centers.

By Region:

Asia Pacific held the highest market share with 33.1% in 2020. Market growth in this region is mainly driven by major economies such as China, India, Japan and others. According to the Indian Brand Equity Foundation (IBEF), India is the world's second largest telecommunications market with a subscriber base of 1.16 billion and has recorded strong growth over the past decade.


In response to user needs, such as the high adoption rate of wireless communication and the development of the Internet of Things (IoT) field, the demand for high data security measures on the Internet is increasing. This increases the demand for end-to-end encryption systems that provide security for confidential data by preventing data exfiltration. Increasing government regulation on data security in these economies fuels the demand for optical encryption systems driving the growth of the optical encryption market. Network coverage such as 5G, telecommunications, consumer electronics, data centers, and smart city initiatives in China, India, Japan, and other developing countries in the region boost the optical encryption market growth significantly.

Scope of Report:

Market Key Players:

• Cisco
• ADVA
• Micro semi
• Time Warner Cable
• China Mobile
• Ericson
• ATandT
• Nokia
• Telefonica
• Century link
• Vodafone
• Juniper nertworks
• Huawei
• Packelight network
• Orange
• Broadcom
• Facebook
• Infinera
• Google
• Ciena
• Masergy
• Arista network
• Acacia Communications
• Deutsche Telekom
• Microsoft
• ECI Telecom

• Cisco

Cisco Systems, Inc., commonly known as Cisco, is an American-based multinational digital communications technology conglomerate corporation headquartered in San Jose, California A modest group of computer scientists from Stanford University founded Cisco in 1984. Cisco engineers have been pioneers in the development of Internet Protocol (IP)-based networking technologies since the company's inception. Today, with more than 71,000 employees worldwide, this tradition of innovation continues with industry-leading products and solutions in the company's core development areas of routing and switching, as well as in advanced technologies such as home networking, IP telephony, optical networking, security, storage area networking, and wireless technology. In addition to its products, Cisco offers an extensive selection of services, such as technical support and advanced services.

Their services are Networking, Wireless, Security, Unified Communication, Cloud, Collaboration, Data Center, Virtualization, and Unified Computing Systems.

• Nokia

Nokia Corporation was founded in 1865 as a Finnish multinational telecommunication, information technology, and consumer electronics company. Nokia's primary facilities are located in Espoo, Finland, within the greater Helsinki metropolitan area, but the company's origins can be traced to the Tampere region of Pirkanmaa.

Their services are Telecommunications and Software and Services

• Google

Google LLC is an American multinational technology corporation that specializes in online advertising, search engine technology, cloud computing, computer software, quantum computing, e-commerce, artificial intelligence, and consumer electronics.

Their services are search, ads, mobile, android, online video, apps, machine learning, virtual reality, cloud, hardware, artificial intelligence, youtube, and software.

• Microsoft

Microsoft Corporation is a multinational American technology company based in Redmond, Washington, United States. The Windows line of operating systems, the Microsoft Office suite, and the Internet Explorer and Edge web browsers are Microsoft's most well-known software products.

Their services are Business Software, Developer Tools, Home & Educational Software, Tablets, Search, Advertising, Machine Learning, Laptops, Mixed Reality,  Servers, Cloud Computing, Quantum Computing, Future of Work,  Windows Operating System, Productivity, AI, Windows Applications & Platforms, Smartphones, Artificial Intelligence, Virtual Reality, Gaming, Developers, and IT Professional

• Facebook

Meta Platforms, Inc., doing business as Meta and formerly known as Facebook, Inc. and TheFacebook, Inc., is a Menlo Park, California-based American multinational technology conglomerate. Facebook, Instagram, and WhatsApp are among the products and services owned by the company.

Their services are Connectivity, Artificial Intelligence, Virtual Reality, Machine Learning, Social Media, Augmented Reality, Marketing Science, Mobile Connectivity, Open Compute, and Metaverse.

Market Segmentation

By layer:

• OTN or Layer1
• MACsec or Layer 2
• IPsec or Layer 3

By Type:

• Less than 10G
• Greater than 10G and less than 40G
• Greater than 40G and less than 100G
• Greater than 100G

By Application:

• Bank, financial and insurance service
• Government
• Healthcare
• Data centre & cloud
• Energy & Utilities

By Region:

• North America
• US
• Canada
• Mexico
• Rest of North America
• Europe
  • Denmark
  • Finland
  • Iceland
  • Sweden
  • Norway
  • Belgium
  • The Netherlands
  • Luxembourg
• Germany
• France
• Italy
• Spain
• UK
• Nordic Countries
• Benelux Union
• Rest of Europe
• Asia-Pacific
  • Indonesia
  • Thailand
  • Malaysia
  • Singapore
  • Rest of Southeast Asia
• Japan
• China
• India
• Australia
• South Korea
• Southeast Asia
• Rest of Asia-Pacific
• The Middle East & Africa
• Saudi Arabia
• UAE
• Egypt
• South Africa
• Rest of the Middle East & Africa
• Latin America
• Brazil
• Argentina
• Rest of Latin America

Conclusion: 

The market for optical encryption is anticipated to expand rapidly over the next several years due to the wide range of potential applications. Data security is becoming more and more important, and businesses and individuals are prepared to spend money on solutions that can safeguard their data. A key component of the data security environment, optical encryption is a potent technique that helps keep information secure. The Global Optical Encryption Market size was valued at USD 3.09 Billion in 2020 and is projected to reach USD 5.96 Billion by 2028, growing at a CAGR of 8.54% from 2021 to 2030.

The main things that are making the optical encryption market grow are the rise in cyberattacks, the rise in worries about data safety and security, and the rise in investments in smart city projects by different governments. Effective security of a network depends on multiple levels of defense along the path of the network as well as at the core and edge of the network. However, most organizations focus most of their security on the user and application ends, which are the most important parts of protection. Data that is moving through the network.