Europe Cybersecurity Market Size, Share, Growth, and Analysis Report to 2026

Market Overview

The Europe cybersecurity market was valued at USD 81.81 Billion in 2025 and is projected to reach USD 165.73 Billion by 2034, growing at a CAGR of 8.2% during 2026-2034. The market is driven by escalating cyber threats and stringent regulatory frameworks like the NIS2 Directive and DORA, which compel compulsory cybersecurity investments. Increasing ransomware operations and AI's role in attack and defense are shaping market dynamics.

Study Assumption Years

• Base Year: 2025
• Historical Year/Period: 2020-2025
• Forecast Year/Period: 2026-2034

Europe Cybersecurity Market Key Takeaways

• The Europe cybersecurity market size was USD 81.81 Billion in 2025, growing at a CAGR of 8.2% from 2026 to 2034.
• By Component: Services dominate with a 54.08% share, driven by reliance on managed security providers and professional consulting expertise.
• By Deployment Type: On-premises leads with a 58.12% share, reflecting data sovereignty and regulatory compliance priorities.
• By User Type: Large enterprises hold the largest segment with 70.1% market share, supported by substantial budgets and regulations.
• By Industry Vertical: BFSI leads with 24.15% share, propelled by stringent financial regulations and critical infrastructure protection.
• By Country: Germany is the top segment with 22% market share due to a robust industrial base and proactive security adoption.

Market Growth Factors

Critical Infrastructure Protection and National Security Imperatives:

European nations are prioritizing cybersecurity investments to protect critical infrastructure from geopolitical factors and state-sponsored cyber threats from Russia, China, Iran, North Korea, and Russia nexus actors targeting Ukrainian infrastructure, which poses risks to European networks. In order to foster European tech sovereignty, the European Commission has allocated UR 1.3 billion of the Digital Europe Programme (2025-2027) to technology deployment.

Expansion of Cybersecurity Insurance and Risk Quantification Frameworks:

As organizations adopt risk transfer tools, and insurers demand rigorous cybersecurity policies, cybersecurity insurance is becoming more common. In 2024, Paris-based Sto Fk raised EUR 25 million in a Series B round to extend its platform across Europe, particularly serving SMEs. Insurers can encourage better cybersecurity posture by requiring security assessments and controls, enabling lower premiums.

Proliferation of Connected Devices and Internet of Things Ecosystems:

With the rapid increase of IoT, which involves specific industrial, commercial, and consumer systems requiring security, Industry 4.0 brings wide-ranging sensors and actuators to assist production while third-party risks remain. Connected health and medical devices are increased from 5G's higher device capacity. Virgin Media O2's deployment of 5G Standalone (5G SA) in 2024 across 14 towns and cities in the United Kingdom will increase connected devices and IoT applications throughput and edge computing capacity.

Market Segmentation

Component:

• Solutions: Includes Identity and Access Management (IAM), Infrastructure Security, Governance, Risk and Compliance, Unified Vulnerability Management Service Offering, Data Security and Privacy Service Offering, and Others.
• Services: Comprises Professional Services and Managed Services. Services dominate with a 54.08% market share in 2025, driven by external providers addressing cybersecurity complexity, especially among SMEs.

Deployment Type:

• Cloud-based
• On-premises: Leads with a 58.12% share in 2025. Strong demand is driven by data sovereignty and regulatory priorities, especially in defense, public sectors, and financial institutions maintaining core systems on-premises while integrating cloud threat intelligence.

User Type:

• Large Enterprises: Hold 70.1% market share in 2025. Large enterprises allocate substantial cybersecurity budgets and comply with regulations like NIS2 and DORA, investing in multi-layered defenses, zero-trust architectures, and managed security services.
• Small and Medium Enterprises

Industry Vertical:

• IT and Telecom
• Retail
• BFSI: Leads with 24.15% market share in 2025. The sector prioritizes cybersecurity investments due to regulatory mandates and critical infrastructure protection, employing advanced identity and access management and behavioral analytics.
• Healthcare
• Defense/Government
• Manufacturing
• Energy
• Others

Country:

• Germany: Leads with 22% market share in 2025. Germany’s leadership stems from a robust industrial base, proactive cybersecurity adoption, and investments driven by GDPR and early adoption of NIS2 effects on thousands of companies.
• France
• United Kingdom
• Italy
• Spain
• Others

Regional Insights

Germany dominates the Europe cybersecurity market with a 22% share in 2025, propelled by its large industrial base and proactive security adoption. Strong growth in network security expenditures and collaborative investments between public and private sectors support this leading position. Implementation of NIS2 will impact approximately thirty thousand companies, further accelerating security spending among medium enterprises previously exempt from mandatory requirements.

Recent Developments & News

In December 2025, Capgemini was selected by the European Commission’s Directorate-General for Digital Services (DIGIT) to provide extensive cybersecurity services to public entities EU-wide, alongside Airbus Protect, PwC, and NVISO. The MC17 FREIA Cyber Framework Contract is a multi-million Euro four-year deal protecting digital infrastructure for 71 European Institutions, Bodies, and Agencies.

In September 2025, Atos secured a major contract under Lot 1 of the European Commission’s CLOUD II Dynamic Purchasing System Mini-Competition 17, valued up to UR 326 million. This represents one of Europe's most significant cybersecurity service deals, emphasizing AI-driven technical operations services.

Key Players

• Microsoft
• Capgemini
• Atos
• Darktrace
• Thoma Bravo
• Airbus Protect
• PwC
• NVISO
• Sto Fk

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