Balanced Enterprise Spending Highlights Transition Towards Cloud-Native Solutions
REDWOOD CITY, Calif. – December 11, 2024 – According to a recently published report from Dell’Oro Group, the trusted source for market information about the telecommunications, security, networks, and data center industries, the global Network Security market eclipsed over $6 B in 3Q 2024, growing 8 percent year-over-year (Y/Y). For the first time in over a year, hardware-based solutions stabilized, balancing the market alongside strong double-digit growth from SaaS and virtual solutions. This dynamic underscores the ongoing pivot toward cloud-native security architectures while maintaining a transitional equilibrium between traditional and cloud-centric approaches.
“The 3Q 2024 market highlights a pivotal moment where enterprises balance investments across physical, virtual, and SaaS security solutions,” said Mauricio Sanchez, Sr. Director, Enterprise Security and Networking at Dell’Oro Group. “However, the long-term trajectory clearly favors SaaS and virtual solutions as they align with evolving enterprise security strategies.”
Additional highlights from the 3Q 2024 Network Security Quarterly Report:
- Firewalls: Total firewall revenue remained above $3 B, growing three percent Y/Y. Virtual firewalls led the segment with 22 percent growth, while physical firewalls stabilized after several quarters of contraction, driven by midrange and low-end gains.
- SSE: The Security Service Edge (SSE) market grew 14 percent Y/Y to $1.4 B. Its growth has been on a deceleration trend as a reflection of 2023 macroeconomic pressures and increasing market maturity.
- SWG Appliances: Secure Web Gateway (SWG) appliances declined three percent Y/Y, reflecting the ongoing shift to cloud-based SSE platforms.
- ADCs: Application Delivery Controllers (ADCs) posted a 14 percent Y/Y revenue increase, driven by deferred upgrades, though long-term growth remains constrained by market maturity.
- WAFs: Web Application Firewalls (WAFs) grew 18 percent Y/Y, fueled by rising demand for API security and protection against sophisticated web-based threats.
- The Network Security market is expected to sustain moderate growth through 2025, driven by hybrid and cloud-centric investments, with quarterly growth fluctuating between 9 and 10 percent. Virtual and SaaS-based solutions will lead growth, while physical appliances stabilize.
The Dell’Oro Group Network Security Report includes manufacturers’ revenue covering the ADC, Firewall, SSE, traditional SWG appliances, and WAF product segments. Moreover, SSEs are further broken down across four primary functions: CASB, FWaaS, SWG, and ZTNA. The report also splits many segments by form factor: physical, virtual, and SaaS. To purchase this report, please contact us at dgsales@delloro.com.
Dell’Oro Group is a market research firm that specializes in strategic competitive analysis in the telecommunications, security, enterprise networks, and data center markets. Our firm provides in-depth quantitative data and qualitative analysis to facilitate critical, fact-based business decisions. For more information, contact Dell’Oro Group at +1.650.622.9400 or visit https://www.delloro.com.
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