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, according to a newly-published report from Dell’Oro Group. Hardware revenue is expected to recover with a 5 percent rise in 2025, as enterprises balance cloud-first strategies with traditional hardware investments.
“The remarkable rise of SaaS and virtual network security solutions has fundamentally reshaped enterprise cybersecurity strategies, creating a dynamic where hardware now trails cloud-based innovation,” said Mauricio Sanchez, Sr. Director, Enterprise Security and Networking at Dell’Oro Group. “Yet, physical appliances will regain modest momentum, particularly in segments like application delivery and high-performance firewalls, as inventory levels normalize and deferred upgrades resume.”
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.