Hardware Security Module Service Revenue by Vertical

Hardware Security Module (HSM) service revenue is forecasted to reach more than US$110 million in 2024, with the enterprise, financial, government, and healthcare sectors accounting for 88% of total revenue.

HSM service revenue is seeing stronger growth than HSM shipment revenue, in part due to the increased offering of multi-tenant service options. Service revenue is mainly being driven by demand in North America and Europe, where cloud migration is strongest and there is interest and appetite for HSM applications decoupled from the appliance.

With strong cloud-based key storage and management demand, both markets are mature for HSMaaS offerings, with all three major cloud service providers (Amazon Web Services (AWS), Azure, and Google Cloud-Platform (GCP)) offering such services in the regions.

While Asia-Pacific is seeing some growth markets, latency is a significant obstacle to HSM services, and impedes on market traction, especially in areas with poor/slow connectivity. Both the Middle East & Africa and Latin America, excepting small regional pockets, will see minimal demand and, therefore, growth in the HSM service market.

HSM vendors should focus service offerings in areas with national/regional cloud and data centers (from a sovereignty perspective) and reliable connectivity (fiber) to ensure minimal latency.