European OT security market accelerates as regulations and digitalisation reshape industry resilience

The European operational technology security market is experiencing rapid growth driven by new regulations, digital industrial adoption, and the need for enhanced cyber resilience, transforming it from a compliance tool into a vital element of industrial and national safety.

According to the original report, the Europe operational technology (OT) security market is transitioning from a niche compliance play to a core pillar of industrial continuity and national resilien...

ce, with market size estimated at USD 5.79 billion in 2024 and projected to reach USD 18.07 billion by 2033 at a compound annual growth rate of 13.49%. This growth reflects a confluence of regulatory pressure, rapid IT–OT convergence and widening adoption of digital industrial technologies that together expand both the attack surface and the commercial opportunity for OT‑focused defences.

Regulation is the structural accelerator. The report highlights the NIS2 Directive and the EU Cyber Resilience Act as primary catalysts: according to Council press material, NIS2 broadens the scope of entities obliged to adopt robust cybersecurity measures across energy, transport, water and other sectors, while commentary from industry legal analysts stresses the Cyber Resilience Act’s requirement that manufacturers secure products with digital elements. These rules do more than set standards , they create recurring, procurement‑linked demand for asset discovery, network segmentation, protocol‑aware monitoring and third‑party validation services as organisations prioritise compliance to avoid heavy fines and operational sanctions.

Operational realities are compounding the regulatory push. Industry data cited in the report shows widespread deployment of industrial IoT and cloud connectivity , notably smart grid and predictive‑maintenance sensors , often without adequate segmentation from corporate networks. European agencies have documented rising OT‑targeted malware and cross‑domain incidents, underscoring how IT‑borne threats such as ransomware can quickly cascade into safety‑critical control environments. As a result, buyers are prioritising OT‑aware intrusion detection, secure remote access, passive monitoring and anomaly detection tuned to industrial protocols.

Yet market traction is uneven. The report emphasises two persistent constraints. First, the longevity of legacy industrial control systems , many RTUs and PLCs pre‑dating 2010 and protocols that transmit in clear text , limits the extent to which vendors can retrofit modern cryptographic and telemetry controls, forcing asset owners to rely on compensating measures that raise complexity and cost. Second, a shortage of cross‑domain expertise hampers deployment and incident response: vocational and academic pipelines have not kept pace with demand, producing a dependence on external consultancies and managed services.

Those constraints shape the market structure described in the report. Solutions , principally network monitoring appliances, protocol‑aware firewalls and asset‑discovery tools , accounted for around two‑thirds of market value in 2024, while services are the fastest growing segment as firms buy audits, integration and managed detection to bridge skills gaps. On‑premise deployments dominate on sovereignty and latency grounds, but cloud offerings , increasingly provided via sovereign cloud initiatives and federated architectures , are forecast to grow rapidly where cross‑facility correlation and advanced analytics add value.

Sector and regional nuances matter. Power utilities captured the largest slice of spend in 2024 driven by systemic risk and early regulatory focus; transportation, logistics and ports are among the fastest growing end‑markets as signalling and automation projects embed security‑by‑design requirements. Germany, France, the UK, Italy and the Netherlands are singled out as leading national markets because of dense industrial bases, proactive regulators and public‑private programmes that tie OT security to industry modernisation schemes.

The landscape also offers tangible opportunities. The report points to EU digitalisation and green industrial programmes , including digital twin and smart‑infrastructure initiatives , as accelerants for OT security sales, because these initiatives increase telemetry flows and make device authentication and encrypted pipelines necessary. Likewise, the growth of sovereign testing and certification frameworks, and procurement rules that prioritise demonstrable conformity with NIS2 and national guidance, favour vendors that can present auditable, locality‑aware offerings.

Nonetheless, the path to a mature European OT security market is not frictionless. The report warns of fragmented national transpositions of EU directives, which create inconsistent obligations and audit burdens for cross‑border operators, and of gaps in coordinated incident response where national CERTs and sectoral responders lack specialised ICS capabilities. These weaknesses raise the risk of prolonged dwell times and cascading operational impacts during complex attacks.

Market incumbents and challengers are reacting in predictable ways. According to the report, major global cybersecurity firms and industrial vendors are embedding NIS2 and Cyber Resilience Act requirements into product architectures, expanding on‑the‑ground professional services and investing in sovereign cloud and compliance certifications. Niche vendors are differentiating through protocol‑specific detection, lightweight solutions for SMEs and partnerships with national testbeds.

In short, the European OT security market is expanding rapidly under regulatory, technological and operational pressures, but its ultimate durability will depend on three linked outcomes: measurable progress replacing or compensating for legacy assets; scaling of cross‑domain skills and incident‑response capabilities; and clearer, more harmonised national implementations of EU cybersecurity legislation that reduce fragmentation for multi‑jurisdictional operators. According to the original report, these dynamics together justify continuing high investment in OT solutions and services as critical infrastructure operators reframe cybersecurity as a matter of industrial sovereignty and public safety.

Source: Noah Wire Services