Network security ‘shifting from hardware to SaaS model’

Pictured: Mauricio Sanchez, Research Director at Dell’Oro Group

 

The worldwide market for network security solutions that are virtual or based on a software-as-a-service (SaaS) model has hit its twentieth consecutive quarter of sequential revenue growth. The first quarter of 2023 saw the pace of year-over-year revenue for these solutions rise by over 20%, twice as strong as sales in the traditional network security hardware appliances sector, according to figures from Dell’Oro Group.

Network security solutions available in a virtual- or SaaS-based form factors span both traditional and newer product segments, such as firewalls, security service edge (SSE), secure web gateway (SWG), and web application firewalls (WAF).

“The shift to a cloud-centric IT architecture created a seismic shift in how enterprises consume network security technology with virtual- and SaaS-based network solutions grabbing the limelight,” said Mauricio Sanchez, Research Director at Dell’Oro Group. “In a world where applications, data, and users are all over the globe, the traditional approach of deploying hardware just doesn’t cut it anymore, and it’s the flexibility and agility of software and cloud-delivered form factors that are the better fit for the modern enterprise.”

Vendors Zscaler, Palo Alto Networks and Akamai owned over a third of the network security market consisting of virtual- and SaaS-based solutions, said Sanchez. Zscaler was the top vendor in the SSE market, which is entirely SaaS-based. Palo Alto Networks cracked into the top three due to its strong performance in the SSE and virtual firewall markets. Akamai was the leading vendor in the SaaS-based WAF market.

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