The Network Security market has shown signs of recovery in the second quarter of 2024, with a 6 percent year-over-year growth reaching $5.9 billion, according to a report from Dell’Oro Group. This growth marks a significant turnaround after six consecutive quarters of deceleration. The increased demand for cloud-native security solutions and virtual firewalls was a key driver of this growth, with a 17 percent increase in these areas. On the other hand, hardware-based solutions experienced their fourth consecutive quarter of decline, dropping by 2 percent.
Mauricio Sanchez, Sr. Director of Enterprise Security and Networking at Dell’Oro Group, commented on the market’s performance, highlighting the shift towards cloud-centric architectures. He noted that the firewall segment, in particular, reflected this transformation, with virtual firewalls experiencing a 22 percent surge while physical firewall sales struggled. This contrast underscores the preference for flexible, cloud-native security solutions among enterprises to address their evolving needs.
The Infrastructure Security market, which includes firewalls, Security Service Edge (SSE), and traditional Secure Web Gateway (SWG) appliances, achieved nearly $5 billion in revenue, showing mid-single-digit growth. The Application Security and Delivery market, encompassing Application Delivery Controllers (ADC) and Web Application Firewall (WAF) segments, also experienced high single-digit growth, reaching $1.2 billion, driven by robust WAF sales offsetting the weaknesses of ADCs.
Within the SSE segment, revenue increased to nearly $1.5 billion, with the top three vendors – Zscaler, Palo Alto Networks, and Broadcom – controlling almost 60 percent of the market. WAF revenue saw an 18 percent increase, primarily due to a 25 percent growth in SaaS-based WAF solutions. Furthermore, high-end physical firewalls showed signs of stabilization with a slight 1 percent revenue growth, potentially indicating a turning point after several quarters of decline.
The Dell’Oro Group Network Security Report covers manufacturers’ revenue across various segments, including ADC, Firewall, SSE, traditional SWG appliances, and WAF products. The report provides detailed insights into the market, breaking down SSEs into four primary functions and splitting segments by form factor: physical, virtual, and SaaS.
Dell’Oro Group focuses on strategic competitive analysis in the telecommunications, security, enterprise networks, and data center markets, offering in-depth quantitative data and qualitative analysis to support fact-based business decisions. For more information on the Network Security Report and other services, interested parties can contact Dell’Oro Group directly or visit their website.