Data Classification Market Analysis Report By Component, By Classification Type, By Application, By Vertical And Segment Forecasts From 2019 To 2025

Industry Insights

The global data classification market size was worth USD 520.2 million in the year 2018 and is predicted to grow at a CAGR of 25.7% from 2019 to 2025. The regulation for adhering to compliances, rising size of unstructured data, the requirement of data management, and concerns over cyber security are a few of the key factors driving the market growth. The solution is important in enhancing data management to determine the impact and risk of mishandled data. Furthermore, classified data is easier to safeguard, comply with, and process with data security policies.

Data classification is primarily classified as internal, private, public, and confidential. Internal, confidential, and private information like a non-disclosure agreement, memos, strategy documents, business plan, plans, internal financial report, internal employee directory information, regulatory information, merger & acquisition information, confidential customer information, insider information, and client information are prone to a higher risk of cyber attack. This information is of higher importance for enterprises and needs to be classified using tags. The tags differentiate every data type and enable Data Loss Prevention (DLP), security management, and data management software to plan for the future for each data set.

There is a rising need to change unstructured data into structured information and determining the actionable outcome. These outcomes help businesses to plan the course of action for the future and safeguard the company’s confidential information and use it for managerial and sales decisions. Additionally, rapid digitalization and globalization have led to the deployment of multiple regulations and rules regarding the consumption and distribution of information. For example, The Contract Labour (Regulation & Abolition) Act - 1970 (CLRA), Health Insurance Portability and Accountability Act (HIPAA), Foreign Account Tax Compliance Act (FATCA), Health Administration (OSHA), EU General Data Protection Regulation (GDPR), The Employees Provident Funds and Miscellaneous Provision Act - 1952 (EPF), Sarbanes-Oxley, Payment Card Industry Data Security Standard (PCI-DSS), and other banking regulations need to be adhered strictly to refrain from reputational and monetary loss. Therefore, data classification solution enhances protection and identification of sensitive data saved in the electronic document.

The introduction of machine learning and big data is likely to transform the industries. Big data needs data classification to survive and perform the delivery of quality information required for management decisions. The demand for classifying data is supported by its velocity, large volume, and various types of information stored in an unstructured or structured form. Similarly, machine learning is expected to drive the data classification market due to its ability to memorize tags for all types of information stored in the system.

The process of data classification offers the organization to differentiate the stored information based on its sensitivity and effect on the business. The differentiation helps allocate authorization and authentication to the user for data control and modification which is necessary for managing the collected information in the hyper-connected business model. However, a dearth of knowledge regarding the advantages of data classification, the use of complicated schemes and technologies, and the complexity associated with data patterns are few factors hindering the use of these solutions.

Component Insights

The solution segment held the largest share of above 69% in 2018 and is expected to maintain its lead in the future. The need to adhere to the rules and analyze previous data for potential decisions across key industries like healthcare, telecom and IT, BSFI, and government and defense is further driving the segment demand. Moreover, the vendors are constantly creating solutions to gain a competitive edge in the market. For example, MinerEye, in December 2018, was awarded the EU grant for creating a technology of the Data Tracker solution by leveraging machine learning and computer vision to automatically categorize, track, and classify large information in minimal time.

This classification solution is provided as a part of or standalone data security platform to handle and store sensitive information. The service division comprises integration, support, maintenance, and consulting for the developed solutions. The consulting services enable the business to ascertain the necessity of classifying the information and implementing the necessary controls for the organization for better operational efficiency.

Classification Type Insights

The user-based classification held the largest data classification market share exceeding 46% in 2018 owing to its features like real-time security alerts for future risk and user-friendly implementation. It can also result in a quick check in the file at the user-end. This feature is expected to accelerate the growth of this segment.

The data classification approach in user-based type provides the user to use their understanding to edit, create, disseminate, review, and flag sensitive documents. The end-user choice and manual approach of every document are mainly implemented across industry verticals. Vendors like Boldon Jamesand Symantec Corporation provide user-based data classification in their Classifier Foundation Suite and Data Loss Prevention (DLP) respectively. These advancements in the segment are likely to augment segment growth in the upcoming years.

Application Insights

The Governance, Risk, and Compliance (GRC) division held the dominant position worth USD 219.6 million in 2018 owing to the need for controlling the complexity of regulatory compliance. Large enterprises are prone to higher risks of getting trapped in non-compliance issues which can lead to heavy penalties. For example, since the mandate of the General Data Protection Regulation (GDPR) on 25^th May 2018, several companies have been imposed fines for their avoidance.

The growing number of regulations is expected to boost the demand for data classification solutions among businesses. Factors like reputational loss owing to disciplinary action from regulators negatively impact industry growth.

Vertical Insights

The Banking, Financial Services, and Insurance (BSFI) segment was worth USD 139 million in 2018 since BSFI information is important for the country’s economic security. The fragility of the BSFI industry towards data theft, strict regulation, and cyberattacks makes it the most promising vertical. The segment is highly guarded and scrutinized by regulations like EMIR, MIFID II, BASEL III, SEPA, AND Dodd-Frank Act. To adhere to these regulations and to safeguard from misuse and leakage of information, the financial institutions should precisely tag the sensitive information. Thus, classifying, protecting, and discovering the sensitive financial details at times of internal process and data sharing will surge the demand for the solution.

Moreover, the IT and telecom vertical is one of the leading adopters due to the era of large sizes of unstructured data that are needed to be analyzed in terms of their classification. Both the segments have important client information which can be misused by hackers, thereby, requiring the data classification solution.

Regional Insights

North America is anticipated to account for the largest market due to the presence of technologically advanced companies that need to use the classification solution to store and manage the information. This region is predicted to maintain its lead throughout the forecast period due to digitally procured information and the need for regulation to protect stakeholder and client interests.

Europe is expected to register a CAGR of around 25% from 2019 to 2025. The growth is attributed to the mandate of the General Data Protection Regulation (GDPR) that emphasizes the protection of the right to data privacy.

Asia Pacific is projected to register the highest CAGR from 2019 to 2025 due to rapid data-driven industrialization and the implementation of government rules for large and small businesses operating in this region. China, which is a regulated market, needs data classification solutions for foreign companies established in the country. Moreover, India is likely to observe a rising demand for these solutions owing to the rising telecom industry in the country.

Data Classification Market Share Insights

The key players include Amazon Web Services, Inc.; Covata, Boldon James, IBM Corporation, Google, Inc.; Innovative Routines International (IRI), Inc.; Open Text Corporation, Microsoft, Symantec Corporation, Handd Business Solution Ltd.; Varonis, Netwrix Corporation, and Veritas. These companies have primarily chosen organic growth strategies to gain a competitive edge in the market. For example, there has been a collaboration between McAfee and AWS, in May 2019, to launch McAfee Database Security for Amazon Relational Database Service (Amazon RDS) to offer cloud-based security solutions. The Security Suite consists of McAfee Vulnerability Manager for Database which can operate data identification and classification for authorization rights, security gap identification, and auditing.

The industry experiences moderate competition due to the existence of several large organizations and cyber security concerns, Moreover, the vendors provide advanced versions to enable users to face the updated security and compliance challenges. The eminent data security players are key contributors to market growth and will maintain their dominance in the future.

Report Scope

Segments Covered in the Report 

This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2015 to 2025. For the purpose of this study, Million Insights has segmented the global data classification market report on the basis of component, classification type, application, vertical, and region:

• Component Outlook (Revenue, USD Million, 2015 - 2025)
    • Solution
    • Services

• Classification Type Outlook (Revenue, USD Million, 2015 - 2025)
    • Content-Based Classification
    • Context-Based Classification
    • User-Based Classification

• Application Outlook (Revenue, USD Million, 2015 - 2025)
    • GRC
    • Access Control
    • Web, Mobile & Email Protection
    • Centralized Management

• Vertical Outlook (Revenue, USD Million, 2015 - 2025)
    • BFSI
    • Defense and Government
    • Healthcare and Life Sciences
    • Telecom & IT
    • Education
    • Media and Entertainment
    • Others

• Regional Outlook (Revenue, USD Million, 2015 - 2025)
    • North America
        • U.S.
        • Canada
    • Europe
        • U.K.
        • Germany
    • the Asia Pacific
        • China
        • India
        • Japan
    • Latin America
        • Brazil
        • Mexico
    • Middle East & Africa