Serverless Security Market Insights, Outlook and Forecast 2024 – 2032

The serverless security market is experiencing robust growth, driven primarily by the increasing adoption of serverless computing models, which offer scalability, cost efficiency, and reduced infrastructure management. As businesses migrate their workloads to serverless architectures, concerns over security have grown, particularly due to the dynamic and distributed nature of serverless environments. One of the key drivers is the rise in cyberattacks and data breaches, which has spurred demand for advanced security solutions that can safeguard applications and data in a serverless framework. According to the National Institute of Standards and Technology (NIST), ensuring secure cloud-based environments has become a top priority for organizations, which has led to a surge in investment in security tools designed specifically for serverless applications.

Another growth factor is the rapid expansion of DevOps and agile development practices. Serverless computing enables developers to deploy code faster, but this also increases the potential for misconfigurations and vulnerabilities, prompting a need for robust security solutions that can be integrated early in the development pipeline. Additionally, government regulations such as the General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA) are pushing enterprises to adopt comprehensive security measures for serverless applications to maintain compliance. According to a report by the U.S. Department of Homeland Security, cloud security, including serverless environments, is a critical area for development, as over 85% of organizations have reported increasing cloud workloads, further driving the need for enhanced serverless security solutions.

The global serverless security market size was USD 1.82 Billion in 2022 and is expected to register a steady revenue CAGR of 29.9% during the forecast period. Rising adoption of serverless computing and security concerns and proliferation of microservices in serverless and function-as-a-service are key factors driving market revenue growth. Serverless computing is an execution method of cloud computing, which provides blackened services on as pay-as-you-go basis. It helps to increase cost-effectiveness of organizations while improving reliability, scalability, and time-to-market, while reducing operational expenditure. In addition, increasing ?adoption of cloud-based applications and rising initiations and investments of IT companies in cloud services are other key factors driving revenue growth of the market.

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The growth of microservices architectures is also contributing to the demand for serverless security, as these architectures rely heavily on serverless platforms, making them susceptible to security risks such as insecure APIs and privilege escalation. To mitigate these risks, organizations are investing in serverless security tools that can monitor, detect, and respond to threats in real-time. As serverless adoption grows, particularly among small and medium-sized enterprises (SMEs), the market is expected to see a compound annual growth rate (CAGR) exceeding 20% in the coming years, according to industry estimates.

Some major companies in the global market report include Amazon Web Services, Inc., RACKSPACE TECHNOLOGY, Open Text, Google LLC., Microsoft, IBM, Lumingo, Oracle, Imperva, and Sophos Ltd.

The serverless security market is segmented based on security type, service model, deployment type, organization size, and end-use. Each of these categories plays a crucial role in shaping the market landscape, with certain sub-segments expected to register the largest revenue share and the fastest CAGR growth in the global market. The increasing adoption of serverless computing has made security a paramount concern, leading to significant investments across these segments.

In terms of security type, the application security sub-segment is projected to capture the largest revenue share in the global market. With the shift towards serverless architectures, the need for robust application security has intensified, as businesses look to secure their code and runtime environments from various threats, including vulnerabilities in APIs and functions. The demand for application security is being driven by the rising number of cyberattacks, which target serverless applications to exploit weaknesses during execution. The rapid growth of serverless frameworks has further propelled the need for end-to-end security across the application lifecycle, contributing to this sub-segment’s dominance.

Meanwhile, network security is expected to register the fastest CAGR over the forecast period. As serverless architectures decentralize resources, network security becomes more complex, prompting organizations to adopt advanced solutions to manage data flow and access control across distributed infrastructures. This growing complexity has led to increased demand for network security tools that can provide visibility, traffic monitoring, and threat prevention within the dynamic, scalable environments of serverless architectures.

When looking at the service model, the infrastructure-as-a-service (IaaS) segment is anticipated to hold the largest share of the market. IaaS solutions offer scalability and flexibility, which are essential for organizations adopting serverless computing, making security within this layer critical. As organizations increasingly deploy workloads on cloud infrastructures like AWS, Azure, and Google Cloud, securing the IaaS environments against unauthorized access, data breaches, and other threats becomes vital. Moreover, as enterprises migrate their traditional infrastructures to serverless models, security solutions tailored for IaaS platforms are in high demand, reinforcing the revenue potential of this sub-segment.

On the other hand, platform-as-a-service (PaaS) security solutions are expected to experience the fastest CAGR growth in the global market. PaaS environments offer significant advantages, including faster development cycles and ease of deployment, but they also introduce unique security challenges such as ensuring secure APIs, managing permissions, and protecting sensitive data. The growing adoption of PaaS services among developers and businesses is driving the need for enhanced security solutions, particularly those focused on monitoring, logging, and vulnerability management, contributing to this sub-segment’s rapid expansion.

In terms of deployment type, the cloud-based deployment segment dominates the market in terms of revenue. Cloud deployment offers the scalability, flexibility, and cost-effectiveness required by businesses leveraging serverless architectures, making security for cloud environments a top priority. With the growing reliance on cloud infrastructures by businesses of all sizes, the need to ensure data security, privacy, and regulatory compliance has led to a significant demand for cloud-specific serverless security solutions, driving the revenue growth of this segment.

The on-premises deployment sub-segment, however, is projected to witness the fastest CAGR. Although serverless computing is predominantly associated with cloud environments, certain industries, especially those dealing with highly sensitive data, such as finance and healthcare, prefer on-premises deployments for greater control and security. As organizations in these sectors continue to adopt serverless models, the demand for on-premises security solutions tailored for their specific requirements is expected to surge, fueling this segment’s growth.

When examining organization size, the large enterprises sub-segment is likely to account for the largest share of the serverless security market. Large organizations, especially those in industries such as banking, financial services, and retail, are early adopters of serverless computing and are investing heavily in advanced security solutions to protect their vast infrastructure. These enterprises require robust security to protect sensitive data and ensure compliance with regulatory standards, which drives the significant revenue contribution of this sub-segment.

The SMEs segment, however, is poised to register the fastest CAGR. Small and medium-sized enterprises are increasingly adopting serverless computing due to its cost-efficiency and scalability, but they also face heightened security risks due to limited resources for in-house security management. As a result, SMEs are turning to specialized serverless security solutions to protect their assets, making this segment one of the fastest-growing in the market.

In terms of end-use, the IT and telecommunications industry is expected to hold the largest market share. This sector’s heavy reliance on cloud computing and serverless architectures has made security a key focus, particularly in securing data transmission, application development, and network infrastructure. Furthermore, the industry’s rapid digitization has increased the risk of cyberattacks, further driving demand for advanced serverless security solutions.

On the other hand, the healthcare sector is anticipated to grow at the fastest CAGR over the forecast period. The healthcare industry’s adoption of serverless computing is being driven by the need for scalable and secure solutions to manage vast amounts of patient data. With stringent regulatory requirements, such as HIPAA in the U.S., healthcare providers are increasingly investing in serverless security to ensure the privacy and security of sensitive information, contributing to the rapid growth of this sub-segment.