Recent rumblings about the "data masking" market have put this concept on the radar of many, which warrants a closer look at the relevant trends and the potential of data masking. The information age has made cybersecurity a necessity and the increase of data breaches and malware attacks have started to call for greater data protection.
What is data masking?
Perhaps surprisingly, the purpose of data masking is more than just obfuscating original data in order to protect it. An additional layer is the process of creating a structurally similar, yet inauthentic version, of an organization's data that can be used for purposes such as software testing and user training. This is done to safeguard the actual data, but also have a functional substitute for occasions when the real data is not required.
Data masking maintains the format of the data, but changes the values. While several methods may be adopted to "mask" the data, such as encryption, character shuffling, and character or word substitution, the value must be changed in such a way so as to prevent detection or reverse engineering.
Why is it important?
The increasing concern for cyber attacks for enterprises have made data masking a significant asset. The data masking market size is expected to grow from USD 384.8 million in 2017 to USD 767.0 million by 2022, at a rate of 14.8%. Additionally, North America is projected to maintain its leading position during the forecast period.
Today's complex business operations, as well as rising customers and enterprise data, result in various data related threats such as cyber attacks and internal data breaches. In fact, 40% of acquiring companies that engaged in a M&A transaction said they came across a cybersecurity problem during the post-acquisition integration of the acquired company. As such, data breaches are a major concern encouraging enterprises to safeguard their data at every possible level. To do this, major vendors providing data masking solutions have formed strategic partnerships or merged with local players as a primary strategy. Essentially, acquiring smaller data masking companies means acquiring a valuable asset that will set an enterprise apart as one that likely will not fall victim to cybersecurity disasters or data breaches. This, at least in part, explains the data masking market's projected growth, and will sustain this market in the coming years.
The data masking market, and its projected exponential growth, has the ability to change the M&A landscape by creating tiers of enterprises that have data masking abilities and ones that do not. The former would, of course, be preferable. Nevertheless, the precise impact of this market and its sustainability potential is still uncertain and, therefore, requires a watchful eye.
The author would like to thank Saba Samianpour, articling student, for her assistance in preparing this blog post.
About Norton Rose Fulbright Canada LLP
Norton Rose Fulbright is a global law firm. We provide the world's preeminent corporations and financial institutions with a full business law service. We have 3800 lawyers and other legal staff based in more than 50 cities across Europe, the United States, Canada, Latin America, Asia, Australia, Africa, the Middle East and Central Asia.
Recognized for our industry focus, we are strong across all the key industry sectors: financial institutions; energy; infrastructure, mining and commodities; transport; technology and innovation; and life sciences and healthcare.
Wherever we are, we operate in accordance with our global business principles of quality, unity and integrity. We aim to provide the highest possible standard of legal service in each of our offices and to maintain that level of quality at every point of contact.
For more information about Norton Rose Fulbright, see nortonrosefulbright.com/legal-notices.
Law around the world
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.