Global network security revenue is forecast to grow from $24 billion in 2024 to $38 billion by 2029, fuelled by three key trends: hybrid work, application migration to the cloud, and the rise of AI-enabled attacks, according to a new forecast from the Dell’Oro Group.
Dell’Oro, in its report said network security spending will remain on a steady upswing through 2029 as organisations adapt corporate defence strategies to respond to a shifting threat landscape.
Mauricio Sanchez, senior director, Enterprise Security and Networking at Dell’Oro Group, emphasised that the market’s growth is being driven by the speed at which companies need to adapt.
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“Enterprises are accelerating the move to elastic, cloud-centric security so they can adapt as quickly as the threat landscape evolves. Vendors that fuse networking and security into integrated software and SaaS-based platforms will capture the lion’s share of the $38 billion opportunity ahead,” he said.
Trend 1: Hybrid work reshaping security architectures
Dell’Oro revealed that, the widespread adoption of hybrid work has permanently altered how organisations structure their security environments. With employees connecting from multiple locations and devices, businesses are moving toward more elastic, software-driven solutions that can be scaled quickly to meet fluctuating demand, it explained.
The report said this has created a preference for virtual firewalls over physical hardware, as virtual deployments can be updated and expanded without the lengthy procurement and installation cycles required by appliances.
Sanchez noted that this shift is reflected in the firewall segment’s forecasted eight percent compound annual growth rate (CAGR) between 2024 and 2029, with virtual models leading the way.
Trend 2: Cloud migration driving SaaS and SSE adoption
Dell’Oro reported that the continued migration of enterprise applications and workloads to the cloud is fuelling strong growth in Software-as-a-Service (SaaS) security offerings and Security Service Edge (SSE) solutions. The firm projects that software and SaaS-based network security revenues will nearly double to $22 billion by 2029, significantly outpacing physical appliance growth.
The report forecasts SSE revenues will almost double to $11 billion by 2029, growing at 14 percent annually, as companies adopt cloud-delivered security frameworks to safeguard resources and users regardless of location.
Sanchez said this approach reduces reliance on physical infrastructure and enables security measures to be deployed closer to the applications and data they protect.
Trend 3: AI-enabled attacks driving API and application protection
Dell’Oro also highlighted the rise of AI-enabled cyberattacks as a catalyst for investments in application and API security. The firm projects that Web Application Firewall (WAF) revenues will grow at a 14 percent CAGR, bolstered by API security mandates and the surge in cloud-based applications.
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By contrast, traditional Secure Web Gateway (SWG) appliances are expected to see a four percent CAGR decline as enterprises pivot to SSE-based approaches. Application Delivery Controllers (ADC) are forecast to remain largely flat, with a one percent CAGR, as demand for hardware-bound solutions levels off.
Sanchez averred that the interplay of these three trends will shape security spending over the next five years. “As businesses modernise networks to handle increased cloud traffic and AI-driven workloads, the demand for elastic, integrated, and cloud-ready security will intensify. Those who can deliver these capabilities are best positioned to capitalise on the expanding market,” he said.
