The network security market showed signs of recovery in the second quarter of 2024 – growing 6% YoY to reach $5,9-billion – and breaking a streak of six consecutive quarters of deceleration, according to Dell’Oro Group.
This growth was primarily driven by solid demand for cloud-native security solutions and virtual firewalls which saw a 17% increase. In contrast, hardware-based solutions experienced their fourth consecutive quarter of decline, dropping 2%.
“The network security market’s performance in 2Q 2024 reaffirms the enduring shift towards cloud-centric architectures,” says Mauricio Sanchez, senior director, Enterprise Security and Networking at Dell’Oro Group. “The firewall segment serves as a microcosm of this transformation. While overall firewall revenue grew modestly at 2%, virtual firewalls surged by 22% as physical firewall sales struggled. This stark contrast in growth rates within a single product category underscores how enterprises consistently favour flexible, cloud-native security solutions to address their evolving needs.
Additional highlights from the 2Q 2024 Network Security Quarterly Report include:
- The Infrastructure Security market comprising firewalls, Security Service Edge (SSE), and traditional Secure Web Gateway (SWG) appliances achieved nearly $5-billion – marking a mid-single-digit growth.
- The Application Security and Delivery market including Application Delivery Controllers (ADC) and Web Application Firewall (WAF) segments experienced high single-digit growth, reaching $1,2-billion, primarily driven by robust WAF sales that offset the weakness of ADCs.
- SSE revenue increased to nearly $1,5-billion, with the top three vendors – Zscaler, Palo Alto Networks, and Broadcom – controlling almost 60% of the market.
- WAF revenue rose 18% driven by a 25% growth in SaaS-based WAF solutions.
- High-end physical firewalls showed signs of stabilisation with a slight 1% revenue growth – potentially indicating a turning point after several quarters of decline.