Confidential computing is a cutting-edge technology that protects the most sensitive information by focusing on data protection with hardware-based trusted execution environments. This emerging security model is in high demand today as more data-driven businesses migrate to the cloud, particularly in highly regulated industries such as banking, which deal with large volumes of extremely confidential data. Due to the excellent outlook for this sector, investors may see it as an attractive investment opportunity.
Demand for cybersecurity services is rising
In the last few years, critical data breaches have become more frequent in the unstable global political situation. Misuse of a nation's critical data as warfare is becoming increasingly common because it can easily damage government and civilian infrastructure and disrupt critical systems, causing severe harm to the state and its citizens. During the Russo-Georgian War in 2008, for instance, Russia used a series of cyberattacks to disable various websites, including the Georgian Parliament website. The National Bank of Georgia suspended all electronic operations for 12 days due to the large-scale cyberattack.
Moreover, in recent years, life has become more digitized. In particular, due to Covid-19, the hybrid work culture has spread worldwide and has supported the growing need for confidential computing. Many have started adopting a hybrid model, from large corporations to startups, increasing demand for cybersecurity solutions and services that address the security challenges of distributed workforces. Because of the remote work trend, 64 billion information of things devices are expected to be installed globally by 2026.
The evolving security architecture is critical for businesses, particularly critical infrastructure suppliers, and its importance is growing as political conflicts between nations escalate. As a result, governments are investing more money in protecting their critical data, driving the growth of the confidential computing market. ÂÂAccording to Research and Markets, the global confidential computing market was estimated to be worth $2.19 billion in 2021 and is projected to expand at a compounded annual growth rate of 24.46% through 2027.
The concept of confidential computing
Encryption is an essential component of today's technical infrastructure for privacy protection, as it allows data to remain private even as it travels across the internet. The cybersecurity market has already discovered a way to encrypt data at rest in storage as well as data in transit across the network. But encryptions fail to protect data and code currently in use in memory because computing hardware requires them to be decrypted and exposed before using encryption keys. Unfortunately, this situation leaves sensitive information at risk in the cloud.
Confidential computing addresses this issue with a new concept. It allows running data and applications in secure enclaves and ensures data integrity, confidentiality and code integrity. This hardware-backed technique for code execution and data protection prevents unauthorized access even if the compute infrastructure is interrupted.
Confidential computing companies worth following
With increasing demand for advanced, automated security systems and threat detection, few companies have developed or are researching a possible solution to thwart cybercriminals' threats with government investments or in collaboration with major corporations.
Applied Blockchain Inc. (APLD, Financial) creates, develops and operates data centers to provide digital infrastructure solutions to the high-performance computing industry. The company has developed confidential computing solutions to prevent unauthorized access to sensitive data using cutting-edge platforms such as Intel SGX, R3 Conclave and Microsoft Azure. Applied Blockchain is also a member of the Confidential Computing Consortium, a platform whose mission is to define and accelerate the commercial acceptance and use of confidential computing.
Microsoft Corp.'s (MSFT, Financial) Azure confidential computing is also driving transformation. The platform enables multiparty data analytics and machine learning that combine datasets while keeping data private among participants and provides hardware, services, SDKs and deployment tools. The company also offers confidential VMs, which enable the deployment of confidential workloads without needing to change existing applications or code, and confidential containers, which enable the deployment of containerized applications with a fully managed Kubernetes service.
Alphabet Inc.'s (GOOG, Financial)(GOOGL, Financial) Google also announced its confidential virtual machines cloud security program. Google worked with Advanced Micro Devices (AMD, Financial) on the secure encrypted virtualization technology, which is hardware-accelerated memory encryption for data-in-use protection to ensure high performance for various workloads. Third generation AMD EPYC processors power the virtual machines.
With several existing tech giants gradually introducing new ways of securing data and applications, there are also emerging players to consider that provide a great entry point for investors looking to profit from the rapidly growing confidential computing market.
CrowdStrike Holding Inc. (CRWD, Financial) is one company redefining the security market by providing advanced cloud-native platforms for endpoint, cloud workload, identity and data protection. Its Falcon platform, a SaaS subscription-based model, is designed to stop breaches through a unified set of cloud-delivered technologies that prevent attacks. The company provides threat intelligence, managed security, information technology operations management, Zero Trust identity protection and log management services.
Hub Cyber Security Ltd. (XTAE:HUB, Financial) is another emerging player with a first-mover advantage in this market, intending to reinvent cybersecurity through quantum-powered confidential computing. The company was founded in 2017 by veterans of Israel's elite intelligence units to protect sensitive commercial and government information. Hub developed a revolutionary set of data theft protection technologies that provide end-to-end data protection across the data lifecycle and a sophisticated encrypted computing solution designed to prevent hostile attacks at the hardware level. The company also received FIPS 140-2 Level 3 certification, the highest level of security for cryptographic modules in the U.S., for its powerful and groundbreaking technologies.
Hub, along with Applied Blockchain, Microsoft and Google, is a member of the Confidential Computing Consortium. Overall, these companies offer investors an exceptional outlook for cybersecurity as well as confidential computing.
