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On May 14th, I had the opportunity to attend Fastly’s Xcelerate 2025 customer roadshow in Los Angeles. It was a full day of customer case studies, partner demonstrations, and executive briefings, all of which delivered a clear message: Fastly is admidst the transformation from being a traditional content delivery network vendor to becoming an integrated edge services vendor that aims to reduce operational friction and operating expenses, while opening new avenues for adopting AI applications.  The three most prominent themes follow.

A Software-Defined Edge Platform Enables Distributed Cloud Networking Strategies

At Dell’Oro, I’ve been championing Distributed Cloud Networking. It is an architecture that couples the user edge, the wide-area middle mile, and the application edge, using a software-defined control plane that spans multiple clouds and networks. Although still emerging, Distributed Cloud Networking aims to harmonize routing, security, and compute policies wherever applications run. Fastly’s platform vision aligns tightly with this model. Executives described a composable stack that integrates content delivery, DDoS mitigation, Web Application Firewall, bot controls, object storage, WebAssembly compute, and observability behind a single set of Terraform modules and APIs.

Customers emphasized the operational upside. For example, customers credited Fastly’s new production-equivalent “staging edge,” where they can trial configurations and code before promotion. This safeguard has virtually eliminated rollbacks, enabling WAF users to ship approximately one-third more features each year. Moreover, flexible deployment options—such as edge points of presence (POPs), Fastly-managed environments in Amazon Web Services, or on-premises agents—support data-residency mandates without disrupting toolchains.

However, risks revolve around platform dependence. Enterprises that prefer best-of-breed tools may find the breadth of APIs to be demanding and the exit costs uncertain. Competitor Akamai continues to expand into core cloud services, while Cloudflare layers networking and security features at speed. We see enterprises benchmarking onboarding friction, roadmap transparency, and contractual agility before entrusting mission-critical workloads to any single vendor.

Offloading AI Workloads Closer to Users for Better Performance and Cost

Artificial intelligence was front and center at Xcelerate—less an aspiration and more an everyday workload. In a joint demo, Google and Fastly demonstrated how a semantic-aware edge cache handles Gemini prompts, with the cached reply being returned in approximately half the time of a cold request and using noticeably fewer tokens. For enterprises, that means faster pages and smaller AI bills without involving origin GPUs.

What makes the example interesting is where it happens. By utilizing an intelligent fabric, Google and Fastly can direct traffic to the nearest inference node, then maintain popular responses in place. It is a textbook illustration of Distributed Cloud Networking’s promise: policies and data move together through a programmable cloud networking fabric, allowing application teams to gain speed while finance teams experience predictable costs.

Shutterstock, the global stock-image and media marketplace, echoed the theme on the training side. Its video-analysis pipeline streams tens of millions of clips across AWS, Azure, and Google, while keeping preprocessing and vector embedding at edge points of presence. Running the heavy lifting in Fastly’s fabric enables Shutterstock to maintain steady throughput across clouds and avoid cross-region egress surprises—a real-world proof that Distributed Cloud Networking fabrics improve both performance and cost control for data-intensive AI jobs.

Challenges remain—semantic caching is young, model versions evolve quickly, and data-residency rules vary—but the direction is clear. Vendors, including Akamai and NVIDIA, are racing to offer similar edge-GPU overlays. Therefore, enterprises should pair any rollout with tight version control, automated rollback, and transparent governance to prevent the benefits from slipping away.

Edge Caching + Integrated Storage: Controlling Spend While Powering “The Best of the Internet”

Edge caching and integrated storage may not be as eye-catching as a software-defined edge-services platform or AI offload. Yet, when traffic surges and the finance team wants lower IT spend, their combination of uptime insurance and cost control often matters most.

For many customers, one of the most significant benefits of Fastly’s integrated object storage is the cost reduction it enables while serving massive amounts of data without interruption. Keeping hot data at the edge wipes out per-gigabyte cloud egress fees and shortens time-to-first-byte:

  • Fox Sports hit a 99.97 % cache-hit ratio during Super Bowl 2025, offloading terabits from its origin and avoiding a game-day cloud-bill spike.
  • Shutterstock migrated 35 PB of images once and now serves them approximately 40% faster, while eliminating a six-figure monthly cloud egress line item.

Cost efficiency is not reserved for media giants. Wildfire-alert nonprofit Watch Duty routinely saw incident spikes, ranging from 20,000 to 100,000 requests per second, during the devastating fires in Los Angeles in early 2025. Fastly provided WatchDuty capacity at a steep discount—an embodiment of the company’s aim to “Power the best of the internet.”

Whether it’s a global streaming platform or a community-safety service, the message was clear: every byte that stays in edge storage is one less byte paid for twice—first in bandwidth and then in user patience.

Conclusion

Fastly Xcelerate 2025 reinforced its commitment to an integrated edge platform that aligns with our vision for Distributed Cloud Networking. Customers repeatedly praised Fastly’s engineers for extracting every microsecond of performance and its high-touch support teams for restoring service stability when seconds mattered most—an operational culture evident in Fox’s Super Bowl war room and WatchDuty’s wildfire surge. We will continue tracking forthcoming roadmap milestones against the backdrop of our Distributed Cloud Network report, while evaluating Fastly tactically in our application security and delivery coverage within the quarterly Network Security report. Further developments deserve close observation.

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Earlier this month, San Francisco’s Moscone Center buzzed with energy as 45,000 security professionals convened for the RSAC 2025 Conference. Across scheduled briefings, product launches, and crowded corridors, one reality became clear. Enterprises are rebuilding their cyber defenses for a cloud-first era characterized by geopolitical tension, architectural complexity, and non-stop release cycles. Attack surfaces expand while budgets tighten, making every architectural bet consequential. Drawing on my 26 analyst meetings at RSAC 2025, this post distills three key forces that are guiding investments and supplier roadmaps. The conference floor affirmed that cybersecurity strategy is now inseparable from business resilience and national policy.

Sovereignty Moving Center Stage

Data location, once ranked low on vendor scorecards, is now becoming a table stake. Multinational buyers are increasingly demanding that security controls, telemetry, and even help-desk staff remain within chosen jurisdictions. Regulators are hardening their stance. The European Union Data Act, Japan’s amended APPI, and parallel proposals in Latin America will codify expectations of sovereignty and impose meaningful penalties for non-compliance.

Vendors are responding by dual-provider architectures, modular key-management offerings, and portals that verify locality compliance in real-time. Another example is how security service edge (SSE), web application firewalls (WAF), and zero-trust services are providing or will provide options to pin policy engines to specific countries while routing inspection traffic only through approved data centers.

The net result is that we are seeing early adopter enterprises beginning to update their request-for-proposal templates. Jurisdictional flexibility will differentiate leading vendors from laggards, and late adopters’ risk costly retrofits as upcoming regulations become even stricter.

Security Becomes an Everywhere Fabric

Perimeter defense has dissolved. Protection now forms an enforcement fabric that spans top-of-rack switches, smart NICs, private cloud gateways, and microsegmentation agents embedded within every workload. We are on the verge of 800G networking systems that push line-rate policy checks into switching silicon, while lightweight software already extends native host filters for east-west inspection.

This convergence blurs product lines. The common objective is to deliver uniform policy logic at the nearest feasible hop, thereby reducing lateral movement risk without requiring expensive data center redesigns. Hardware offload further reduces latency and power consumption, enabling organizations to meet aggressive carbon reduction targets.

The rise of generative-AI workloads adds urgency. Vendors warned that 2-kilowatt GPUs, liquid cooling, and 800G links create new lateral movement paths, making switch-resident firewalls and host eBPF agents mandatory safeguards for model pipelines, vector databases, and inference gateways.

Operational complexity remains the hurdle. An everywhere fabric only works when application flows are mapped and kept up to date. Early adopters emphasized the importance of domain-specific language models and graph-based visualization in maintaining context as environments evolve. Vendors that supply open APIs, distributed telemetry lakes, and workflow integrations will win mindshare.

Consolidation and Managed Security Services Accelerate

Console fatigue is real. Chief information security officers described staff juggling dozens of dashboards, overlapping agents, and unpredictable subscription bills. With headcount flat, many organizations view platform consolidation or managed delivery as the only viable escape.

RSAC exhibitors leaned into that demand. Several vendors introduced unified licensing that bundles networking, cloud access, endpoint protection, and security operations into a single contract. Managed service providers unveiled outcome-based agreements promising defined detection times, integrated compliance reporting, and one-hour onboarding for new locations. New alliances between telecom carriers and hyperscale clouds aim to embed managed detection natively within connectivity bundles.

Economics also favors consolidation as volume commitments push scale advantages upstream into vendor roadmaps. During analyst sessions, suppliers acknowledged that cross-product telemetry lakes enhance threat-model accuracy more than isolated engines, further strengthening the business case.

Dell’Oro analysis highlights partner-delivered SASE (Secure Access Service Edge) as a key enabler for expanding the reach of SASE into smaller enterprises that lack the necessary technology expertise and personnel. Renewal cycles will prompt strategic platform pivots rather than incremental add-ons. Vendors offering transparent pricing, shared analytics, and structured migration tooling will capture a disproportionate share as enterprises rationalize portfolios.

Cellular 5G emerged as a surprise accelerant. Compact routers and slice-aware software, provided by several exhibitors, enable managed-service providers to extend SASE to pop-up branches, public safety fleets, and the long tail of small enterprises without requiring trenching of cable or fiber.

Conclusion

RSAC 2025 confirmed that the security industry stands at a strategic crossroads. Sovereign-ready architectures, AI-aware controls, 5G-enabled reach, and integrated delivery models now define a competitive advantage. Readers following these shifts should engage with Dell’Oro Group’s forthcoming Network Security, SASE/SD-WAN, and CNAPP reports and advisory services to benchmark against new imperatives and guide investment decisions.

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A Landmark Acquisition in Cybersecurity History

In one of the most significant cybersecurity acquisitions ever, Google announced its intention today to purchase Wiz, a fast-growing cloud-native security firm, for an unprecedented $32 B. This historic deal dwarfs other notable cybersecurity transactions in recent history, including Thoma Bravo’s acquisition of Proofpoint for $12.3 B in 2021 and Broadcom’s $10.7 B purchase of Symantec in 2019. Google’s aggressive move marks a strategic milestone, reinforcing its commitment to cybersecurity after entering the space significantly in 2022 with its $5.4 B acquisition of Mandiant.

Strategic Rationale: Why Wiz and Why Now?

Understanding Google’s strategic rationale behind this deal requires recognizing the surging growth of enterprise cloud investments, coupled with a notable lag in cloud security spending. According to our recent Cloud Workload Security Quarterly Report covering the CNAPP (Cloud-Native Application Protection Platform) market, enterprise cloud spending skyrocketed from approximately $81 B in 2020 to an estimated $285 B in 2024, representing an impressive 5-year compounded annual growth rate (CAGR) of 29%. However, security investments have not kept pace, presenting a significant opportunity for vendors like Wiz that provide comprehensive cloud-native security solutions.

CNAPP, as defined in our Dell’Oro Group reports, is a unified platform that combines software security, deployment security, and runtime security technologies to secure the entire lifecycle of cloud-native applications. This platform approach fosters essential collaboration among development, security, and operations teams to protect applications and data throughout their deployment cycles effectively. Wiz, an innovative pure-play vendor, exemplifies this integrated approach, rapidly capturing market share with near triple-digit revenue growth rates.

Interestingly, Palo Alto Networks’ recent decision to reboot its CNAPP strategy, shifting from Prisma Cloud to Cortex Cloud, underscores the evolving competitive landscape. As detailed in my recent blog, Palo Alto Networks’ rebranding signals a necessary pivot toward deeper integration and a more cohesive security offering that directly addresses customer challenges around fragmented security management and operational complexity. Google’s acquisition of Wiz strategically positions it to avoid similar pitfalls, acquiring a purpose-built CNAPP solution with better cohesion from day one, potentially accelerating adoption among enterprise customers.

Valuation Concerns and Regulatory Risks

Yet, at $32 B, the valuation Google placed on Wiz raises critical questions about market dynamics and valuation metrics in cybersecurity. For context, Google’s purchase price slightly surpasses Zscaler’s current market capitalization of approximately $30 B, despite Zscaler having significantly higher annual revenue of $2.4 B. Furthermore, the price represents a substantial premium compared to cybersecurity giants like Palo Alto Networks (market cap: $126 B, revenue: $8.6 B) and Fortinet (market cap: $84 B, revenue: $6.0 B). Meanwhile, we estimate Wiz’s annual revenues were between $300 and $400 million in 2024. Although Wiz’s exceptional growth rate—94% year-over-year according to our Q2 2024 CNAPP report—partially justifies the valuation premium, it inevitably raises the question: Has Google overpaid?

Additionally, regulatory scrutiny in the technology sector has intensified, exemplified by the Department of Justice’s recent blockage of HPE’s $14 B acquisition of Juniper, despite approval by other global regulatory authorities. Google’s Wiz acquisition, at over twice the value of the blocked deal, is sure to attract rigorous antitrust examination, potentially complicating or delaying the transaction. Google’s willingness to navigate this regulatory environment underscores its confidence in the strategic necessity of securing a market-leading CNAPP platform to compete head-to-head not just against cloud service providers like Microsoft and Amazon Web Services but also standalone cybersecurity leaders.

Google aims to achieve recognition as a leading security vendor and replicate Microsoft’s success, which leveraged its dominant position in endpoint via Windows to build a $20 B annual cybersecurity business across endpoints and the cloud. Google believes that a similar leadership role can now be achieved in cybersecurity purely from a cloud perspective, marking a significant strategic pivot toward securing recurring revenue from cloud workloads.

Synergies and Market Opportunities

Despite valuation concerns and regulatory risks, Google’s aggressive move could be precisely what the company needs to solidify its cybersecurity portfolio and enhance the appeal of Google Cloud. Wiz’s impressive AI-driven security features will significantly bolster Google’s capabilities, enhancing its appeal to enterprises increasingly deploying AI workloads in multi-cloud environments. Moreover, the opportunity to leverage Google’s expansive cloud infrastructure and customer base promises substantial synergies that could rapidly accelerate Wiz’s revenue growth beyond current projections.

Industry observers and participants will closely monitor how this landmark deal influences competitive dynamics, growth trajectories, and customer perceptions in the CNAPP market. I plan to publish my next CNAPP market share report covering 2024 within the next month. It has been a tight race between Palo Alto Networks, CrowdStrike, and Wiz—stay tuned!

Ultimately, Google’s Wiz acquisition underscores a pivotal moment for cybersecurity valuations and strategic priorities, reflecting an industry evolving rapidly in response to enterprise needs for robust, integrated cloud security solutions. While the road ahead is challenging—given valuation expectations and regulatory hurdles—the strategic fit between Google and Wiz is compelling. If executed well, this deal could set a new benchmark for cloud-native security, ultimately benefiting enterprises worldwide by accelerating innovation and elevating the overall security posture in the digital economy.

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Understanding CNAPP and Its Role in Cloud Security

This month, Palo Alto Networks rebooted its Cloud-Native Application Protection Platform (CNAPP) solution, introducing Cortex Cloud as the evolution of Prisma Cloud. CNAPP has emerged as the go-to solution for securing cloud environments across the entire application lifecycle. It integrates multiple security technologies—including  Cloud Workload Protection Platform (CWPP), Cloud Security Posture Management (CSPM), Cloud Infrastructure Entitlement Management (CIEM), and Data Security Posture Management (DSPM), among others—into a cohesive system designed to protect applications from development to runtime.

The rise of CNAPP is a response to the increasing complexity of cloud security, as traditional tools struggle to keep up with hybrid and multi-cloud environments. Security teams require solutions that bridge development, deployment, and runtime security while fostering collaboration between IT, DevOps, and security operations. The challenge lies in the fact that traditional cloud security tools operate in silos, leaving organizations exposed to visibility gaps, misconfigurations, and runtime threats that are unique in cloud environments.

 

The CNAPP Marketplace and Palo Alto Networks’ Position

The CNAPP market is experiencing rapid growth. According to my latest Cloud Workload Security report from 2Q24, CNAPP revenue grew 42% year-over-year in 2Q24 to nearly $700 million. While the development subsegment grew at a slower rate (21%), the deployment (62%) and runtime (37%) segments saw robust adoption as organizations prioritized compliance, visibility, and real-time threat protection.

Palo Alto Networks has been the CNAPP revenue share leader every quarter since 1Q19. However, Palo Alto Networks faces increasing competition from Wiz and CrowdStrike, which saw 94% and 78% growth, respectively, in 2Q24—multiples faster than Palo Alto Networks’ growth rate.

While Palo Alto Networks has historically led the market, it struggled with integration challenges from its acquisition-heavy approach to CNAPP. Palo Alto Networks’ Prisma Cloud amalgamated multiple acquired technologies, leading to fragmented user experiences and operational inefficiencies.

To counter these challenges, Palo Alto Networks has not just rebranded Prisma Cloud as Cortex Cloud but also spent over a year retooling the technologies into its Cortex XSIAM security operations platform. This shift is intended to consolidate disparate security tools, enhance real-time detection, and improve automation across cloud workloads. The move is a direct response to the market’s demand for seamless, deeply integrated CNAPP solutions that not only secure applications but also reduce the burden on security operations centers (SOCs).

 

The Two Vectors of CNAPP Evolution: Depth and Breadth

The evolution of CNAPP is occurring along two key dimensions: depth and breadth.

  1. Depth: Best-of-Breed Security Across the Lifecycle

Depth refers to how well CNAPP solutions address security challenges across development, deployment, and runtime using best-in-class capabilities. A strong CNAPP should:

      • Identify vulnerabilities early in the development phase, securing Infrastructure-as-Code (IaC) and third-party software components.
      • Provide deep visibility into cloud environments, enforcing compliance and identifying misconfigurations.
      • Deliver robust runtime security, detecting and mitigating real-time threats across containers, virtual machines, and serverless workloads.

Palo Alto Networks’ previous CNAPP approach faced integration challenges due to a patchwork of acquisitions. Each acquired company was best-of-breed in its domain, but its lack of seamless integration limited its overall effectiveness. Palo Alto Networks asserts that Cortex Cloud addresses these challenges by embedding CNAPP capabilities natively within the Cortex XSIAM platform. It aims to create a cohesive experience leveraging AI-driven risk prioritization and automated remediation.

  1. Breadth: Expanding CNAPP’s Role in SecOps

Breadth refers to how CNAPP fits into the broader security operations (SecOps ecosystem. Increasingly, enterprises want cloud security integrated into the totality, including endpoint, network, application, and data security, to provide a holistic view of risk.

This is where Palo Alto Networks is making a strategic play. By merging CNAPP into Cortex XSIAM, the company claims to create a centralized security hub where cloud security is not an isolated function but part of a broader SecOps workflow. According to Palo Alto Networks, the cross-pollination of security data across IT domains (e.g., correlating cloud workload vulnerabilities with endpoint threats) is designed to help security teams shorten the time to value and improve incident response.

If these claims hold, security teams could see faster detection, reduced manual workload, and better alignment between cloud security and enterprise-wide threat management.

 

Final Thoughts: The Future of CNAPP and Cortex Cloud

The rebranding of Prisma Cloud to Cortex Cloud is a necessary and strategic move for Palo Alto Networks. The company has taken its fair share of criticism in the CNAPP space for a disjointed approach that slowed adoption despite its market leadership. With Cortex Cloud, Palo Alto Networks is betting on tighter integration, automation, and real-time security to regain its competitive edge.

As the CNAPP market continues to evolve, it will be exciting to see how vendors, large and small, continue to innovate. The shift toward platform-centric, deeply integrated security is gaining momentum, and we eagerly await the market’s response to Palo Alto Networks’ new CNAPP offering.

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2024 is shaping to be a year of correction across most enterprise network markets, as indicated by a notable decline in spending among key segments. This correction follows extraordinary growth from 2021 to 2023, driven by the surge in demand caused by the pandemic. Now, as enterprises work through the backlog of pandemic-driven investments and face excess inventory, coupled with cautious spending due to ongoing economic uncertainty, the five key enterprise network markets – Network Security, Branch Routing, Campus Switching, WLAN, and Enterprise Data Center Switching – are poised for varying degrees of growth deceleration and all but one an outright contraction.

Common Trends Across Enterprise Networking Markets

Across all five segments, a significant driver of the 2024 correction is a period of “enterprise digestion,” where organizations deploy the substantial purchases made during the pandemic and subsequent supply chain recovery periods. This digestion phase is compounded by excess inventory in the channel, leading to a slowdown in new equipment deliveries.

Moreover, macroeconomic factors such as inflation and tightening IT budgets are dampening network infrastructure investments. The broader technology market faces some pullbacks as companies reevaluate spending in light of potential economic uncertainties. For many vendors, the tailwinds provided by large backlogs of orders during the pandemic have dissipated, and there is now a recalibration as the market waits for demand to return to a more normalized, pre-pandemic level​​​​.

 

Network Security: Adjusting After High Growth

The Network Security market, with firewalls as its largest segment, has faced significant headwinds in 2024 as enterprises work through existing hardware investments. The slowdown reflects a broader trend in the industry, where organizations, having invested heavily in physical firewall solutions during the pandemic, are now focused on optimizing those assets rather than purchasing new hardware. At the same time, growth in non-hardware solutions like Security Service Edge (SSE) and virtual firewalls has helped cushion the decline, but even SSE is seeing a deceleration. After years of explosive growth, SSE investments are beginning to normalize as enterprises slow their spending to integrate existing deployments fully. This shift signals a cooling from the rapid pace of adoption seen in prior years, though the demand for flexible, cloud-based security solutions remains vital for the long term​​.

 

Branch Routing (SD-WAN and Access Routers): Temporary Slowdown Amid Strategic Shifts

The Branch Routing market, which encompasses SD-WAN and traditional access routers, is experiencing a slowdown in 2024 as enterprises take a strategic pause following the rapid expansion of these technologies during the pandemic. SD-WAN saw significant growth as organizations took the opportunity to invest in branch transformation to provide a better network experience at lower TCO at the branch. Still, this surge has now led to inventory overhangs. Additionally, the ongoing integration of SD-WAN functionality into broader Secure Access Service Edge (SASE) frameworks has shifted purchasing behavior. Enterprises are focusing on consolidating and optimizing their existing deployments rather than making new investments, contributing to the temporary softness in the market​​.

 

Campus LAN (WLAN and Campus Switching): Post-Pandemic Normalization

The Campus Switching and WLAN markets are enduring a similar correction as the post-pandemic glut of equipment deliveries is digested. After enjoying strong growth from 2021 to 2023, WLAN sales have contracted in 2024 as enterprises and distributors have worked through high stock levels accumulated during the supply chain recovery.

For Campus Switching, the slowdown has also been dramatic, especially in North America, where revenues have been dropping sharply following a peak in 2023. Excessive backlogs cleared in 2023 have led to a steep decline in new orders. Still, the rise of Power over Ethernet (PoE) technology and higher-speed ports, such as 2.5 Gbps and 5 Gbps, could offer growth opportunities as organizations prepare their networks  for Wi-Fi 7, whose adoption began to accelerate in 2Q24.

 

Enterprise Data Center Switching: The Weakest Segment

The Enterprise Data Center Switching market has been hit the hardest in 2024 thus far. Despite some growth in the broader data center market due to AI-related investments, the enterprise segment has struggled as traditional front-end deployments face intense inventory challenges. The contraction is driven by prolonged backlog normalization and fewer large-scale deployments in non-cloud enterprise environments. The long upgrade cycles for enterprise data centers and a strategic pivot towards cloud and AI back-end networks have made this sector particularly vulnerable.

 

Outlook for 2025: A Return to Growth

Despite the contraction in 2024, the outlook for 2025 is brighter. The fundamental demand for digital transformation, cloud migration, and hybrid work solutions remains intact. As enterprises complete the digestion of their current investments and inventories normalize, spending is expected to rebound. The rise in adoption of AI-driven workloads, 5G, Wi-Fi 7, and advanced security frameworks like SASE will drive growth across the network infrastructure landscape. Furthermore, as inflation and interest rates decrease, enterprises will benefit from improved capital availability, providing further tailwinds for market growth.

However, the Enterprise Data Center Switch market is an exception, as it is not expected to return to growth in 2025. This segment is expected to face challenges. As enterprises continue to embrace the cloud or AI, they will increasingly be on public clouds, reducing the need to expand or refresh their on-premises data center footprint. As a result, further contraction is anticipated for enterprise data center switching, even as other markets recover and expand.

In conclusion, while 2024 is a year of necessary correction following unprecedented growth, the long-term prospects for enterprise network markets remain buoyant. Much of the industry is poised for recovery and growth in 2025, fueled by security, connectivity, and digital infrastructure innovations.