Report Overview

The growth of Japan's cyber security market is attributable to the rising investments from the government authorities of the country. Furthermore, the growing number of data breaching incidents across Japan, and growing geopolitical tensions with China are also propelling the market forward...

Japan Cybersecurity Market - Industry Trends & Forecast Report 2030

Japan Cyber Security market is estimated to reach USD 6458.0 million in 2021 and is projected to reach USD 38.9 billion by 2030, growing at a CAGR of 22.6% during the forecast period (2022-2030). The growth of Japan's cyber security market is attributable to the rising investments from the governmental authorities of the country, the growing number of data breaching incidents across Japan, and growing geopolitical tensions with China. The country's retail industry is also registering substantial growth with the advent of POS and AI technologies, which is projected to enhance the demand for cyber security tools, thereby bolstering the growth of the Japan cyber security market. In addition, the growing number of government initiatives to integrate cloud computing into their operations will fuel the growth of the cloud security in the coming years, thereby driving the growth of Japan cybersecurity market.

Cybersecurity: A Brief Overview

Security refers to the practice of preventing unauthorized access or digital or internet-based attacks on networks, systems, and programs. Cybercrime can be tackled in a number of ways, including but not limited to critical infrastructure security, network security, application security, cloud security, disaster recovery/business continuity planning, storage security, and more. Furthermore, cybersecurity is a top priority for government agencies, businesses, military, financial, and healthcare organizations, which collect, store, and process large amounts of confidential data online. The risks of unauthorized access to such systems can compromise national security, which is why cybersecurity is so important.

Japan Cybersecurity Market Trends

Growth Drivers

Growing Data Breaching Incidents Across Japan

In recent years, Japan has grown increasingly concerned about the increasing number of cyberattacks that have been happening across the country. Recent cyberattacks at the Tokyo Olympics have demonstrated a growing trend of data breaches in the country. Additionally, an estimate suggested that more than 33 Japanese companies across varied sectors had to pay ransomware of about USD 1.18 million in 2020 to prevent any leakages of passwords and other confidential documents. The most recent ransomware attack registered in Japan was in November 2021, when a Japanese video game company registered a demand for USD 9.61 million in exchange for retrieving crucial documents. Although the company had refused to cooperate, it is believed that a Russian group named Ragnar Locker was responsible for the theft of over 350,000 documents. Accordingly, the Ministry of Defense announced they would allocate more than USD 341 million to enhance the cybersecurity capabilities of Japan's Self-Defense Forces and advance cybersecurity training and technology for 2021, which represents a 39.4% increase from 2020, indicating a healthier market for growth.

Challenge

Insufficient Investments for Cybersecurity Software

According to one estimate, the Japanese government is not allocating sufficient funds toward accommodating cybersecurity tools across the country, which is only estimated to be about 1% of the total budget allocations. Furthermore, the Ministry of Defense intends to strengthen Japan's cyber security infrastructure by eliminating C4SC (Command, Control, Communication. & Computers Systems Command) and increasing the total Cyber Defense Group to 540 personnel. Additionally, cyber personnel across other branches of Japan’s Self-Defense Forces are expected to get transferred to the Cyber Defense Group as part of the consolidation. Experts are, however, concerned about the country's plans, given their smaller funding and staffing levels. In contrast, North Korea's cyber security personnel number is about 6,800, which means that Japan has a long way to go to secure its data, which is a significant threat to the country.

Impact of COVID-19 on Japan Cybersecurity Market

More than 283 million people worldwide have been affected by COVID-19 as of December 2021. The pandemic may have negatively impacted industrial development to some degree, but it has also presented huge opportunities for software companies, indicating more benefits than impacts for the cyber security industry. In addition to this, Japan is also one of the few countries that did not emphasize the pandemic and implemented far fewer measures compared to other countries. Although Japan did not experience a month-long lockdown, some states of emergencies emphasized social distancing norms and advised some employees to work remotely. The country also experienced pandemic-related cyberattacks during the period. Numerous companies in Japan have been hit by an upsurge in ransomware attacks since the start of 2020, resulting in computer and email system failures just when businesses have begun teleworking as a defense against the COVID-19. Thus, the need for better cybersecurity has skyrocketed since the outbreak of the pandemic. Therefore, Japanese executives have expressed a commitment of 78% for the next two years, with 52% planning to use AI to enhance the country’s cybersecurity. Such initiatives will help the market grow steadily amid the pandemic.

Japan Cybersecurity Market- By Component

Based on components, Japan Cyber Security market is categorized into hardware, software, and services. Among these, the services segment held the largest market share in 2021. In contrast, the software segment is projected to grow at the fastest CAGR during the forecast period (2022-2030). In June 2021, the National Police Agency of Japan announced that they were working on developing a team of professionals to handle the growing number of cybercrimes from China. The team of 200 investigators is anticipated to become fully functional by March 2023. Such favorable initiatives shows the growing demand for services and cyber security software in the country, which in turn, will contribute to the growth of the market.

Japan Cybersecurity Market- By Security

Based on security, Japan Cyber Security market is segmented into network security, endpoint security, application security, cloud security, infrastructure protection, data security, and others. Among these, the infrastructure protection segment garnered the largest market share in 2021. On the other hand, the endpoint security segment is also projected to grow at a healthy CAGR in the coming years. Japan’s Ministry of Defense stated that they were earmarking more than USD 277,711 toward developing a Cyber Information Gathering System. It would be responsible for gathering information on Tactics, Techniques, and Procedures (TTP) associated with cyberattacks across numerous national entities, which may contribute to enhancing the number of personnel from 220 to 290 across Cyber Defense Group. These measures have been adopted in order to conduct research across network devices and contribute to network security, thereby driving the market's growth.

Japan Cybersecurity Market- Competitive Landscape

Japan cyber security market is moderately fragmented due to the presence of various domestic and international players in the domain. The key players in the market are Caulis Inc., Trend Micro Inc., Spider AF Ltd., IBM Corporation, LAC Co. Ltd., Cyber ​​Reason Japan Corporation, Cyber Security Cloud, Inc., Internet Initiative Japan, Inc., SCSK Corporation, Sumo Logic, Inc., Digital Arts Inc., Secureworks, Inc., Cisco Systems Inc., NEC Corporation, Underwriters Laboratories, LLC, Flatt Security, Keychain, Bankguard, GMO GlobalSign, Inc. and others.

Recent Developments

• In December 2021: NTT Docomo & Line Pay announced that they were launching a platform for sharing information & help prevent payment frauds, wherein Caulis Inc. stated that were playing a role of creating databases for the companies so that they can identify when an account was created with which number and share the same information with authorities.

Scope of the Report

By Component

• Hardware
• Software
  • Advanced Persistent Threat
  • Threat Intelligence
  • Security and Information Event Management
  • Security and Vulnerability Management
  • Network Access Control
  • Antivirus/Antimalware
  • Others
  • Services
  • Professional Services
  • Managed Services

By Security

• Network Security
• Endpoint Security
• Application Security
• Cloud Security
• Infrastructure Protection
• Data Security
• Others

By Deployment Mode

• On-Premises
• Cloud

By Industry Vertical

• Aerospace and Defense
• Government
• Banking, Financial Services, And Insurance (BFSI)
• IT & Telecommunication
• Healthcare
• Retail
• Manufacturing
• Others

By Organization Size

• Small and Medium-Sized Enterprises
• Large Enterprises