Application Security Market Assessment, By Type [API Security, Web Application Security, Mobile Application Security, Cloud Native Application Security], By Deployment [Cloud, On-Premises], By End-user [IT and Telecom, Banking, Financial Services and Insu

Application Security Market Assessment, By Type [API Security, Web Application Security, Mobile Application Security, Cloud Native Application Security], By Deployment [Cloud, On-Premises], By End-user [IT and Telecom, Banking, Financial Services and Insurance, Healthcare, Government, Retail and E-Commerce, Manufacturing, Others], By Region, Opportunities, and Forecast, 2017-2031F

Global application security market is projected to witness a CAGR of 16.12% during the forecast period 2024-2031, growing from USD 8.63 billion in 2023 to USD 28.53 billion in 2031. The application security market covers the sector that deals with security methods and practices to protect computer applications against external threats. This market is concerned with the identification, management, and fixation of application vulnerabilities to avoid any malicious attack or unauthorized access to software. The escalating frequency and sophistication of cyber attacks are driving the application security market. As organizations are increasingly becoming aware of the different vulnerabilities that exist in their applications, it has become essential for them to invest in robust security systems, to mitigate cyber threats.

For instances, in the first half of the 2024, India reported 593 cyberattacks, with the education, government, and technology sectors being the main targets, as outlined in the India Breach Report by FalconFeeds, a product of the Kerala-based cybersecurity company Technisanct. The incidents comprised 388 data breaches, 107 data leaks, 39 ransomware activities, and 59 instances of unauthorized access sales or leaks. The healthcare, banking, manufacturing, and consumer services sectors also experienced significant cyberattacks. Further, the Center for Internet Security (CIS) report estimated that malware threats surged 30% in the first half of 2024 compared to the same period last year. That means a drastic 92% surge in malware threats just in May 2024 alone. This heightened awareness and need for protection are propelling market growth as businesses seek to strengthen their defense capabilities against cyber threats and safeguard their information and critical assets.

The advent of Cloud-Technology is Proliferating the Market

The rapid adoption of cloud-based technologies is having a major effect on the application security market. Since organizations are moving towards cloud environments, they face different security challenges that require advanced protective measures. This shift significantly expands the attack surface, as cloud platforms often have multiple users, applications, and data sources spread across various locations and increase vulnerability to cyber threats.

Data security, access control, and compliance with regulatory requirements are all complicated in the cloud environment. These complications arise from the nature of cloud infrastructures, which are dynamic, shared between multiple tenants, and accessed remotely. The nature of cloud services makes traditional measures of security somewhat ineffective, thus encouraging businesses to pursue application security solutions designed for cloud environments. These solutions also target specific vulnerabilities of the cloud, in particular, real-time threat detection, automated security management, and full risk assessment, thereby driving the demand and growth of the application security market.

Rising Concerns for Protecting Business-Critical Applications are Driving the Market

Organizations are under growing pressure to innovate and rapidly develop new applications in conjunction with emerging technologies, such as social media, mobile platforms, analytics, cloud computing, and the IoT. This has resulted in an accelerated pace of technological changes and thereby increasing security risks for business applications and systems. Recent reports by tech giants, such as HCL Technologies Limited, indicated a sharp rise in security breaches, and the threat from hackers and criminal groups is much greater than ever. Nearly 80% of applications have at least one critical or high-level vulnerability, while with the growing use of open-source code, around 90% of applications are said to have critical vulnerabilities.

According to HCL, it is estimated that the average cost of a data breach is around USD 7.2 million, while the general time taken to detect a breach is said to take almost 80 days. The cost does not solely include lost revenues but also damage to reputation, which increases losses further due to erosion of trust. This is compounded by the rapid emergence of new applications, particularly web and mobile applications processing critical customer data like credit card information. The compulsion for speedy launches is forcing developers to launch apps with incomplete security checks, thus leaving organizations at risk of these attacks. Thereby, the demand for security in business-critical applications is increasing, accelerating the growth in the application security market.

Moreover, key players' active involvement is driving market growth and demand. For instance, in June 2024, Checkmarx Ltd., a company that provides application security testing, introduced two new products, Checkmarx Application Security Posture Management and Cloud Insights. These tools will bring more visibility and analysis of security risks to the enterprises' code-to-cloud environments and cloud-native applications. Similarly, in April 2024, Invicti Corporation, a top developer of leading solutions for testing applications, announced the availability of its latest capability: AI-powered Predictive Risk Scoring. This capability estimates risk levels associated with applications and provides organizations with a strategic overview of their overall application security risk.

Widespread Adoption of Zero-Trust Architectures is Fueling the Market Growth

The increasing demand for zero-trust architectures is one of the key factors driving the application security market. Zero trust is a security model based on the concept of no trust by default, even within internal networks, instead of constant verification of trust relationships. This makes it a strong defense against contemporary, sophisticated cyber threats. It ensures all access requests are validated, irrespective of origin, in contrast to traditional perimeter-based security, which is increasingly becoming ineffective.

Moreover, the growing attention to API security is reshaping the market. Crucial for modern applications, APIs expose new security risks since they can be an entry point for cybercriminals to access sensitive data. As organizations increasingly use APIs, guaranteeing their security has gained growing importance. In this respect, it is highly important to adopt robust authentication and authorization, encryption of data at rest and in motion, and continuous testing of APIs for vulnerabilities. Both factors thus feed into the demand for advanced application security solutions.

In March 2024, TechnoBind Solutions Pvt Ltd. announced a new partnership with AppSentinels Private Limited for application security solutions to offer a complete API Security platform that supports and secures the lifecycle of API Management. It provides functionality like discovery and cataloging APIs, sensitive data tracking, API attack mitigation, shift-left testing, and rapid response to incidents, enabling a streamlined compliance mechanism. The platform's features include discovering and cataloging APIs, sensitive data tracking, API attack mitigation, shift-left API testing, rapid incident response, and streamlining compliance.

Asia-Pacific Holds Significant Share of Application Security Market

Asia-Pacific currently accounts for a significant share of the global application security market, as it is highly exposed to cyber threats. As reported by security testing firm Cobalt Labs Inc., Asia-Pacific has been reported as the most targeted area for cyber-attacks, representing about 31% of all incidents reported in 2023. This significant percentage shows the region's high level of cyber threat activity. Moreover, these attacks have become more frequent, with an average of 1,835 per organization per week, which represents a 16% increase year over year.

This has been particularly damaging in India. With an average of 2,807 attacks every week during the first quarter of 2024, India has been hit by 33% more threats than ever before. The rapid growth in these attacks underlines the increasing question of cybersecurity and the pressing need for significant improvement of security measures in the region.

The rising collaborations between the key players operating within the region and government initiatives are further accelerating the market landscape within the region. For instance, on July 26, 2024, Google Cloud and PwC India unveiled a strengthened strategic partnership that aims to harness the potential of Generative AI (GenAI) to enhance enterprise solutions. This collaboration merges Google Cloud’s advanced AI capabilities, such as the Vertex AI platform and Gemini models, with PwC India’s extensive industry knowledge and consulting expertise. The goal is to create a range of generative AI solutions designed to revolutionize critical business operations in sectors like tax, healthcare, and legal services.

Lack of Skilled Professionals Restraining the Application Security Market

Despite the number of applications or opportunities, the market is experiencing several challenges, such as the need for more skilled professionals. As per GuardRails Pte. Ltd., the application security field is experiencing a dramatic increase in demand for skilled professionals, with job postings for application security roles rising by 74% over the past five years. However, the supply of qualified candidates has only increased by 13%, leading to a substantial gap in available talent. There is a requirement for 2.16 million additional cybersecurity professionals globally, with 60% of organizations reporting a significant shortage of software security expertise, which negatively impacts the application security market growth.

Future Market Scenario (2024-2031F)

Regulatory changes are expected to transform the landscape of the application security market in the coming years. With the increasing cyber threats, governments across various countries are implementing robust regulatory frameworks, emphasizing user consent and data transparency, thereby driving market growth and demand.

The future of the application security market is leaning towards addressing the increasing threat of supply chain attacks, for which the market heavily depends on third-party vendors. Therefore, businesses will need to invest in robust security measures. Further, well-managed and secure chains are anticipated to become critical factors for driving market security resilience.

The expansion of the identity and access management (IAM) market is anticipated to drive the application security market. Integrating biometric technologies and artificial intelligence is expected to enhance security protocols, resulting in improved user authentication and anomaly detection.

Key Players Landscape and Outlook

The application security market is highly fragmented, with key players being very active. The market players are continuously investing in developing and launching new products to increase their presence in the market. For instance, in June 2024, Mend.io, a global application security player, announced Mend AI, a new tool specifically designed to identify, track and secure AI models and AI-generated code. In response to the direction and pace at which AI is rewriting software development, ensuring that AI will be used responsively and securely, it is rapidly rising to the top of both government and enterprise priority lists.

The market players are also entering into strategic alliances and partnerships to strengthen their competitive positions and accelerate growth. For instance, in July 2024, TechBridge Distribution MEA, one of the prominent channel value-added distributors serving the Middle East and Africa (MEA) region, announced the signing of a strategic distribution agreement with renowned application security solution provider DerSecur Ltd., widely recognized for its innovative DerScanner solution. The new collaboration aims to shape the face of cybersecurity for TechBridge's widespread network of channel partners and their individual customers across the MEA region.