The network security market rebounded significantly in the fourth quarter of 2024, growing 9% year-over-year, according to a recently published report from Dell’Oro Group.
In 2024 the market exceeded USD24 billion, with SaaS and virtual-based solutions achieving robust 18% growth, offsetting a 2% decline in hardware revenue. Hardware revenue is expected to recover with a 5% rise in 2025 as enterprises balance cloud-first strategies with traditional hardware investments.
Additional highlights from the 4Q 2024 Network Security Quarterly Report include:
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Firewall market revenue grew 3% year-over-year for the full year, propelled by the strong 22% growth in virtual firewall solutions amid the increasing adoption of hybrid and cloud environments;
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The security service edge market grew 16% year over year for the full year. However, its growth has been decelerating, reflecting 2023 macroeconomic pressures and increasing market maturity;
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Application delivery controllers grew eight percent year over year for the full year, bolstered by deferred physical hardware refreshes, despite an ongoing shift toward virtual and cloud-native ADC deployments;
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Web application firewall annual revenue increased 19% year over year, driven by cloud-native deployments and the evolving threat landscape; and
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The network security market is forecast to grow 11% in 2025, boosted by continued strength in cloud solutions and recovery in hardware spending.
“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 Dell’Oro Group’s Mauricio Sanchez. “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.”
