Digital Forensics Market Size, Share & Trends Analysis Report By Type, By Component (Hardware, Software, Services), By Tool (Forensic Data Analysis, Review & Reporting), By End Use, By Region, And Segment Forecasts, 2019 - 2026

Industry Insights

The global digital forensics market size was valued at USD 1.72 billion in 2018 and is expected to expand at a CAGR of 12.3% over the forecast period. Increasing cases of sophisticated digital crime coupled with rising security concerns across various industries, such as financial institutions, IT and telecom, and retail, among others are expected to drive the market growth. Furthermore, the emergence of the Internet of Things (IoT) and increasing use of smartphones, computers, tablets, and other electronic devices is anticipated to further contribute to the growth.

Rising adoption of cloud services and devices with in-built IoT has given a leeway to cybercriminals to exploit technological limitations and gain access to customer information. Increased risk of viruses and malware, allows hackers to gain access to customer information. Rising use of electronic devices along with rising penetration of the internet gives hackers easy access to customer data, such as emails, messages, and financial transactions, among others. These factors are expected to drive demand for digital forensics to investigate financial frauds and cyberattacks.

Enterprises across the globe are focusing on the digitization of data. Sharing this large volume of data in an internal and external environment has made enterprises vulnerable to cybercrime. Cyberattacks adversely affect the enterprises in terms of data breach and revenue loss and create a dent on the brand and reputation. For instance, according to the Cyber Security Breaches Survey 2019, commissioned by Department for Digital, Culture, Media and Sport, U.K., 32% businesses and 22% charities in U.K. experience data breaches or cyber-attacks. Thus, the growing vulnerability of enterprises to cyberattacks has led to high demand for digital forensics solutions and services.

To counter rising cyberattacks, various universities and government facilities are emphasizing on organizing workshops for demonstrating digital forensics and cybercrime investigation tools. For instance, in May 2019, Cybercrime Programme Office of the Council of Europe (C-PROC) along with the University College Dublin Center for Cybersecurity and Cybercrime Investigation (UCD CCI) organized FREE TOOL Showcase Workshop in Romania. The workshop demonstrated tools for live data forensics, encryption detection, memory analysis, and open-source intelligence gathering. Such initiatives are instrumental in increasing awareness about the benefits of digital forensics.

However, significant cost incurred in installing and licensing digital forensics solutions and services is expected to pose a challenge to the market growth. Also, the rising usage of proprietary operating systems and the high level of encryption used in the new smartphone apps are other factors that may hinder the market growth. Lack of technical expertise among digital investigators and lack of pre-planning to deploy digital forensics solutions and services among the enterprises are further anticipated to thwart the market growth. Furthermore, the lack of availability of cloud forensic tools may hinder the growth of the market to investigate cloud-based frauds.

Component Insights

Based on components, the digital forensics market is segmented into hardware, software, and services. The services segment is further bifurcated into professional services and managed services. The software segment accounted for a significant market share in 2018 as it minimizes processing time and also detects fraud and theft based on evidence. Digital forensic software allows a user to understand the trends related to the relevant data, fluctuations in data, and to analyze potential risk factors.

Digital forensic software enables users to quickly search, identify, and prioritize the evidence, through mobile devices and computers. Also, the companies are focusing on developing flexible digital forensic software, which can gather data from various mobile devices. For instance, EnCase Forensic, a flexible digital forensic solution offered by OpenText Corp, can gather data from GPS, smartphones, and tablets, among other mobile devices. The development of such flexible software digital investigation is further expected to propel the segment growth.

Type Insights

The computer forensics segment dominated the market in terms of revenue with USD 555.8 million in 2018. Increasing the adoption of computer forensics in both criminal and private law investigation to inspect and recover data related to computer crime is expected to drive the segment growth. Furthermore, increased organizational spending on improving information technology for computer and network security is expected to propel the segment growth over the forecast period.

Technological advancements have strengthened the sophistication of attacks on digital devices, such as laptops and computers. The computer forensics solution deals with the collection, identification, analysis, and reporting of evidence found on such devices. Computer forensics is widely accepted as a reliable investigation tool within the European and U.S. court system to recover deleted files from the computer, live analysis, and cross-drive analysis. These solutions can extract device information, calendar events, contacts, messages, and also metadata, which is important for digital investigations.

Tool Insights

The forensics data analysis segment dominated the market in 2018 and is expected to maintain its dominance over the forecast period. This tool offers retrieval and recording competences with deep analysis competences through metadata to offer better visibility of data risks. Increasing incidences of financial crimes and rising demand to investigate structured data for financial crimes is further driving the segment growth.

The data acquisition and preservation segment are expected to witness remarkable growth over the forecast period. The primary part of a forensic investigation is to safely obtain the evidence and preserve it without making any damage to the integrity of the data. The data acquisition and preservation tool provide the functionality to preserve the obtained evidence. The tool also provides functionality to preserve digital evidence at a secure physical site so that the original data cannot be changed or modified.

End-Use Insights

The government was the leading end-use segment in 2018 accounting for a high revenue share. This dominance can be attributed to the increasing adoption of digital forensics solutions in court systems. The government vertical is the most vulnerable segment to cyberattacks. Cyberattacks on government verticals are usually for political gains, for regional rivalry, and terrorism, among others. For instance, in August 2019, The Texas Department of Information Resources (DIR) stated that 23 government agencies in Texas witnessed a cyberattack. To deal with such incidence, the government agencies are now focusing on adopting digital forensics solutions and services.

Criminals use advanced technology to attack financial institutions and steal funds. For instance, in 2018, 54% of total fraud cases registered in the U.K. were cyber-related. Increasing the incidence of breaking bank databases and stealing customer information are major factors expected to drive demand for digital forensics solutions in the BFSI segment. Furthermore, financial institutions have now digitalized their business functions, which increases the need to opt for cybersecurity. Digital forensic is one such tool BFSI prefers to avoid financial frauds and conduct a fraud investigation.

Regional Insights

North America dominated the market in 2018 and was valued at USD 667.0 million. This steady regional demand can be attributed to growing instances of cybercrimes and the need to follow various compliances proposed by the government for the protection of organizational data. Banks in the U.S. such as the Citigroup, Bank of America, Wells Fargo, and JPMorgan Chase, have confronted cyberattacks that led to exposed data of their consumers. These banks were recommended by the government authorities to screen their network activities. Such government impositions are further expected to drive regional market growth.

Presence of major market players such as FireEye Inc.; Access data; OpenText Corp; and LogRhythm Inc.; among others is expected to propel the demand for digital forensics in North America. Furthermore, increasing penetration of the internet and electronic devices in the region is anticipated to drive the growth. Rising technological advancements in the forensics department and development of advance theft mechanisms are encouraging public as well as public sectors to invest in the market, providing lucrative revenue generation opportunities for established players as well as new entrants to gain greater market share.

Digital Forensics Market Share Insights

Guidance Software Inc.; LogRhythm Inc.; Access data; Paraben Corporation; FireEye Inc.; Digital Detective Group Limited; MSAB; and Oxygen Forensics Inc.; are some of the key market players. Most players heavily invest in R&D activities to drive product innovation and boost the value of their offerings. For instance, in 2018 OpenText Corporation invested USD 926 million in R&D activities.

The market players focus on initiatives, such as product updates and new product launches, to stay competitive in the market. For instance, in November 2018, Paraben Corporation launched Version 2.0 of the E3 Platform, a digital forensic tool. The platform includes features, such as Python SDK allowing customers to develop their scripts of the E3 Platform. The developed scripts are expected to support the latest mobile operating system.

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 2026. For this study, Grand View Research has segmented the global digital forensics market report based on component, type, tool, end-use, and region:

• Component Outlook (Revenue, USD Million, 2015 - 2026)

  • Hardware

  • Software

  • Service

    • Professional Services

    • Managed Services

• Type Outlook (Revenue, USD Million, 2015 - 2026)

  • Computer Forensics

  • Network Forensics

  • Mobile Device Forensics

  • Cloud Forensics

• Tool Outlook (Revenue, USD Million, 2015 - 2026)

  • Data Acquisition & Preservation

  • Forensic Data Analysis

  • Data Recovery

  • Review & Reporting

  • Forensic Decryption

  • Others

• End-Use Outlook (Revenue, USD Million, 2015 - 2026)

  • Government

  • Banking, Financial Services, and Insurance (BFSI)

  • IT & Telecom

  • Retail

  • Healthcare

  • Others

• Regional Outlook (Revenue, USD Million, 2015 - 2026)

  • North America

    • The U.S.

    • Canada

  • Europe

    • U.K.

    • Germany

  • Asia Pacific

    • China

    • India

    • Japan

  • Latin America

    • Brazil

  • MEA