Dell'Oro: Dell'Oro Group: Cloud-Friendly Network Security Grows 18% as Hardware Declines in 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 Network Security market rebounded significantly in 4Q 2024, growing 9 percent year-over-year (Y/Y). For 2024, the market eclipsed $24 B, with SaaS and virtual-based solutions achieving robust 18 percent growth, offsetting a 2 percent decline in hardware revenue. Hardware revenue is expected to recover with a 5 percent rise in 2025, as enterprises balance cloud-first strategies with traditional hardware investments. Additional highlights from the 4Q 2024 Network Security Quarterly Report: Firewall market revenue grew three percent Y/Y for the full year, propelled by the strong 22 percent growth in virtual firewall solutions amid the increasing adoption of hybrid and cloud environments. The Security Service Edge (SSE) market grew 16 percent year over year for the full year. However, its growth has been decelerating, reflecting 2023 macroeconomic pressures and increasing market maturity. Application Delivery Controllers (ADCs) grew eight percent Y/Y for the full year, bolstered by deferred physical hardware refreshes, despite an ongoing shift toward virtual and cloud-native ADC deployments. Web Application Firewall (WAF) annual revenue increased 19 percent Y/Y, driven by cloud-native deployments and the evolving threat landscape. The Network Security market is forecast to grow 11 percent in 2025, boosted by continued strength in cloud solutions and recovery in hardware spending. 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.