Thales released a 2012 survey on encryption spending trends today. In a nutshell, spending was up a modest amount for the first time in several years. From the Deep Dive post:

estimated total spending on encryption by all sectors grew by 2.5 percent from 2011 to 2012, one of the biggest jumps in the eight years the survey has been conducted. Thales released the “2012 Global Encryption Trends Study” today. The Ponemon Institute of Traverse City, Mich., surveyed 4,205 individuals on Thales’ behalf. The spending figures were particularly interesting to Thales: “This last year we saw one of the biggest hikes in budgets that we’ve seen for the last seven years or so,” said Thales e-Security’s Richard Moulds, vice president of product strategy. In 2011, businesses and governments spent 15.1 percent of their information technology security budget on encryption. The number jumped to 17.6 in 2012.

A couple things to note about this information. For security products not driven by compliance (like PCI) or vulnerabilities that totally disrupt IT (think SQL Slammer), sales typically grow at a rate of 2-3% a year. From our conversations with companies of all sizes, use of encryption is up across the board. However, adoption is mostly for new projects, rather than expansion of existing installations. And in many cases developers are the ones who select free or open source encryption products, not commercial products. They do this so the development process is not burdened by having to get budget or deal with sales droids. This means spending does not go up at the same rate that usage goes up. Still, the encryption market has not seen the sales growth we would otherwise expect – instead people invest in better key management services, or in alternatives to encryption (e.g. tokenization, masking) to protect data.

It’s a growing market, but buyers are cautious about how and where they spend their money.