Recent findings from the Dell’Oro Group, a reputable source for market intelligence across sectors such as telecommunications, security, networks, and data centers, reveal a significant surge in global spending on network security. This includes domains such as firewalls, Security Service Edge (SSE), traditional Secure Web Gateway (SWG) appliances, Web Application Firewalls (WAF), and Application Delivery Controllers (ADC).
By 2029, total network security revenue—encompassing both physical appliances and versatile software and SaaS models—is forecasted to escalate from $24 billion to an astounding $38 billion. This growth is attributed to several factors, including the rise of hybrid work environments, the migration of applications to the cloud, and the evolving landscape of AI-enabled threats that are reshaping corporate defense mechanisms.
Notably, revenue from software and SaaS solutions is poised to nearly double—forecasted to reach $22 billion—reflected in enterprises’ growing preference for agility and scalability over traditional physical appliances.
“Enterprises are accelerating their shift towards elastic, cloud-centric security, allowing them to swiftly respond to the fast-evolving threat landscape,” remarked Mauricio Sanchez, Senior Director of Enterprise Security and Networking at Dell’Oro Group. “Those vendors that successfully integrate networking and security into cohesive software and SaaS-based platforms will dominate the lucrative $38 billion opportunity that lies ahead,” he added.
Key insights from the Network Security July 2025 Five-Year Forecast Report, covering the years from 2024 to 2029, include the following:
- Firewalls: Anticipated to maintain its position as the largest revenue segment, with a projected Compound Annual Growth Rate (CAGR) of 8 percent, driven by the prioritization of virtual firewalls over traditional physical refresh cycles.
- Security Service Edge (SSE): Expected to nearly double to $11 billion, experiencing a robust annual growth rate of 14 percent as businesses increasingly adopt cloud-delivered security for users and applications regardless of location.
- Web Application Firewalls (WAF): Revenue growth is forecasted at a 14 percent CAGR, propelled by mandates concerning API security and the growing prevalence of cloud-based applications.
- Application Delivery Controllers (ADC): Anticipated to remain stable, with a modest CAGR of 1 percent, as the demand for software instances compensates for the declining need for hardware.
- Traditional SWG Appliances: Projected to see a decline at a 4 percent CAGR, reflecting the structural transition from hardware-based solutions towards SSE.
For a comprehensive analysis, including tables detailing various segments and metrics akin to those found in Dell’Oro’s quarterly reports, refer to the Network Security 5-year forecasts. This report provides a holistic overview of industry trends, incorporating historical data dating back to 1998.
About Dell’Oro Group
Dell’Oro Group is a distinguished market research firm that specializes in strategic competitive intelligence across telecommunications, security, networks, and data center domains. The firm offers in-depth quantitative data and qualitative insights to support critical, fact-based business decisions. For more information, please contact Dell’Oro Group at +1.650.622.9400 or visit Dell’Oro Group’s official website.
For original content and multimedia resources, please refer to the following link: Dell’Oro Group Press Release.
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