Mauricio Sanchez, Sr. Director, Enterprise Security and Networking at Dell’Oro Group.Virtual and SaaS-based network security solutions are predicted to surpass $90 billion in cumulative revenue between 2023 and 2028, according to a newly released report from Dell’Oro Group, provider of market information about the telecommunications, security, networks, and data center industries. This would indicate a significant shift in enterprise security spending patterns.
A strategic shift away from conventional physical security appliances, which are expected to expand at a more moderate 5-year revenue CAGR of 6 percent, is shown by this expenditure pattern, which indicates a 5-year revenue compound annual growth rate (CAGR) of 16 percent.
“We are witnessing a seismic shift in the network security market, propelled by the growing sophistication of cyber threats and the need for more dynamic security solutions,” said Mauricio Sanchez, Senior Director, Enterprise Security and Networking at Dell’Oro Group. “The surge in virtual and SaaS-based network security investments underscores a fundamental transition towards more flexible, cloud-centric approaches, aligning with the evolving work environments and distributed application needs of modern enterprises.”
Network Security: Firewalls, WAF, SSE, ADC, SWG
Further highlights from the January 2024 Network Security 5-Year Forecast Report are as follows:
- Firewall Market - The firewall market is expected to generate revenue close to $20 billion by 2028, with a single-digit compound annual growth rate. After a strong start, the market is predicted to expand at different rates every year due to the pandemic's lasting impact on consumer behavior and a slow transition to more flexible security measures.
- Web Application Firewalls (WAFs) - It is anticipated that the WAF segment will generate over $6 billion in sales by 2028, indicating a double-digit compound annual growth rate. This increase is a result of the growing need to defend corporate applications that are accessible via the Internet from a wide range of cyberthreats.
- Secure Service Edge (SSEs) - The SSE market is expected to grow at a double-digit compound annual growth rate to generate up to $10 billion in sales, demonstrating resilience against macroeconomic uncertainty. The shift in security perimeters from conventional on-premises solutions to cloud-based services, meeting the needs of dispersed applications and the emergence of hybrid work styles, is driving this expansion.
- Application Delivery Controllers (ADCs) - The ADC market is expected to grow at a 2 percent compound annual growth rate, which is indicative of its maturity. The market for standalone ADC solutions is being challenged by the growing integration of ADC capabilities into cloud services and software infrastructure, which is slowing down the industry’s development.
- Secure Web Gateway (SWG) Appliances - With a predicted three percent revenue compound annual growth rate over the next five years, the SWG appliance industry is on a declining trend, according to Dell’Oro Group. The primary cause of this drop is a deliberate move in business security investment toward more sophisticated and cloud-based SSE solutions.
