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.
