A recent report from the Dell’Oro Group has found that the network security solutions market has experienced somewhat of a slowdown in growth compared to a year ago. While the global network security market still sits at $5.5 billion in revenue, the climb was marked by single digits as opposed to last year’s explosive double-digit growth.
Behind the scenes, however, Dell’Oro notes there was a significant decline in hardware-based solution sales and a contrasting surge in cloud-delivered and virtual network security solutions.
“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.”
Revenue related to the sale of firewalls has also declined for the third consecutive quarter, lowering to just shy of $3 billion. High-end firewalls declined 14% year-over-year (YoY) while virtual firewalls rose 28% YoY.
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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.
The security services edge market grew by 24% year-over-year, which, despite the sizeable increase, still represents its slowest ever growth rate and represents the first time since the market started being tracked back in 2019 that it did not grow quarter over quarter.
Despite this, Zscaler, Palo Alto Networks, and Netskope, whose aggregate revenue represented over half of the market, together saw a 38% YoY revenue rise as a reflection of the breadth of their solution and strong customer appeal.
Web application firewall revenue increased by 23% YoY, 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.
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