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Network Security Growth Stalls As Industry Continues Shift From Hardware to Cloud and Virtual-Based Solutions, According to Dell'Oro Group
Wednesday, June 19, 2024
Hardware-based Security Revenue Plummets 9 Percent as Virtual and SaaS Surge 24 Percent
REDWOOD CITY, Calif., June 11, 2024 /PRNewswire/ -- 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 network security market saw a modest single-digit revenue growth in 1Q 2024, reaching $5.5 billion. This muted growth, down from double-digit a year ago, was driven by a significant decline in hardware-based solutions and a contrasting surge in cloud-delivered and virtual network security solutions. The shift away from traditional hardware to more adaptable, cloud-based solutions is reshaping the industry as enterprises respond to evolving cyber threats and the need for scalable security measures.
"In a market facing economic headwinds and shifting architectural preferences, the decline in hardware-based network security solutions was expected but still notable," said Mauricio Sanchez, Sr. Director, Enterprise Security and Networking at Dell'Oro Group. "As enterprises continue to navigate the complexities of modern cyber threats, the pivot to more adaptable, cloud-centric solutions is unmistakable and essential for future resilience."
Additional highlights from the 1Q 2024 Network Security Quarterly Report:
-- Firewall Market: Overall firewall revenue declined for the third
consecutive quarter, dipping by single digits to just shy of $3
billion. On a sub-segment basis, there was significant variation in
revenue performance, ranging from a 14 percent year-on-year (Y/Y)
decline in high-end firewalls to a 28 percent Y/Y increase in virtual
firewalls.
-- The top four firewall vendors (Palo Alto Networks, Fortinet, Cisco, and
Check Point) owned 68 percent of the total market, representing an
all-time high that has been steadily increasing over time as enterprises
consolidate on a core set of vendors.
-- SSE Market: SSE revenue grew by 24 percent Y/Y, which was its
lowest-ever growth rate and the first time revenue did not rise on a
quarter-on-quarter basis since tracking began in 1Q 2019. Despite this,
Zscaler, Palo Alto Networks, and Netskope, whose aggregate revenue
represented over half of the market, together saw a 38 percent Y/Y
revenue rise as a reflection of the breadth of their solution and strong
customer appeal.
-- The top SSE vendors by revenue continued to be Zscaler,
Broadcom/Symantec, and Palo Alto Networks.
-- WAF Market: WAF revenue increased by 23 percent Y/Y, marking a
continuation of a rebound that started in 1Q 2023 as enterprises placed
renewed attention on application transformation and its security needs.
Akamai continued to be the number one vendor by revenue.
About the Report
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.
About Dell'Oro Group
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.
View original content to download multimedia:https://www.prnewswire.com/news-releases/network-security-growth-stalls-as-industry-continues-shift-from-hardware-to-cloud-and-virtual-based-solutions-according-to-delloro-group-302168920.html
SOURCE Dell'Oro Group
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