EU Market Turns to Domestic Cybersecurity Tech - BankInfoSecurity
European cybersecurity product sales from EU-headquartered vendors have surged 35% over the past two years, outpacing overall market growth as digital sovereignty concerns reshape purchasing decisions.
European tech buyers are increasingly turning to EU-based cybersecurity products, with sales from European vendors rising 35% through distributors in Europe, the Middle East and Africa over the past two years. This growth significantly outpaces the overall market increase of 10% and the 8% sales lift for U.S. vendors during the same period.
Digital sovereignty is becoming a buying decision. As customers and resellers get clearer about what it means in practice, they're asking who holds the encryption keys, who can access sensitive logs and where that data is stored.
Market Share Disparity
Despite the growing demand, European cybersecurity vendors still lag behind their American counterparts. In the third quarter of this year, American vendors captured 62% of sales in the European market, while EU-based vendors accounted for only 15%.
European vendors do dominate certain segments, however, holding 92% of the security awareness training market and 82% of the vulnerability management sector. They also represent just over half of sales in security information and event management.
Regulatory Drivers
The shift toward domestic cybersecurity solutions is being fueled by several regulatory developments, including the Network and Information Security 2 directive and the Digital Operational Resilience Act for the finance sector. These laws mandate supply chain risk management in critical infrastructure.
Brussels may increase regulatory pressure through a revised Cybersecurity Act that would enhance supply-chain risk assessments for NIS2-designated sectors, particularly focusing on non-technical risks like third-country influence.
Future Outlook
Gartner predicts that more than 90% of EU organizations will have a digital sovereignty strategy by 2029, with every country expected to make digital sovereignty a core component of its national security strategy by 2030.
Rene Buest, Gartner's Senior Director, stated that Europe has "passed a point of no return on digital sovereignty," with dependencies now viewed as potential business continuity risks rather than efficiency drivers.
The U.K. cybersecurity market differs significantly, with EU-based vendors capturing only 5% of the market. British organizations are focusing on global platform consolidation and domestic AI innovators like Darktrace, which saw spending increase by 164% over the two-year period.
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