Next-Generation Firewall Market Size & Share 2024 - 2032
Market Size by Application (Network Security, Application Control, Content Filtering, Threat Intelligence, Management and Reporting), by Component, by Organization Size, by Deployment Model, by End Use & Forecast.
Report ID: GMI8548
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Published Date: March 2024
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Report Format: PDF
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Authors:
Preeti Wadhwani, Aishvarya Ambekar
Next-Generation Firewall Market Size
Next-Generation Firewall Market size was valued at USD 4.8 billion in 2023 and is estimated to register a CAGR of over 7.5% between 2024 and 2032. Increasing digital transformation and cloud adoption is a critical driver for the market. Digital transformation projects frequently involve migrating company activities and data storage to cloud infrastructures. This eliminates the old network boundary, where data was contained entirely within a company's physical infrastructure. New-generation firewalls are easily scalable to meet the increasing demands of cloud-based applications and data storage. This reflects the changing nature of digital transformation activities.
Next-Generation Firewall Market Key Takeaways
Market Size & Growth
Key Market Drivers
Challenges
Next-generation firewall market is thriving due to the increasing adoption of Firewall as a Service (FWaaS), and cloud network security. FWaaS offers scalable cloud-based firewall solutions, while cloud network security protects cloud-native applications. In addition, enterprises invest in robust enterprise firewall solutions to fortify defenses against evolving threats and regulatory requirements. This convergence reshapes the NGFW market, enabling businesses to secure digital assets effectively.
The rise in cyberattacks and data breaches is a significant growth factor for the next-generation firewall market. Traditional firewalls are primarily concerned with blocking questionable traffic based on predefined criteria. However, attackers are continuously devising ingenious ways to circumvent these fundamental security measures. This exposes enterprises to zero-day assaults and Advanced Persistent Threats (APTs). Businesses now hold massive volumes of sensitive data, such as customer information, financial records, and intellectual property. This makes them targets for data breaches and ransomware operations.
Compared to standard firewalls, new-generation firewalls provide a more complete security posture by analyzing data packet content to identify malware, suspicious code, and unapproved applications, as well as identifying and blocking dangerous network activities in real-time. For instance, In January 2024, the UK government published a report detailing the data breaches and cyber-attacks recorded in 2023. The year witnessed numerous significant incidents globally, leading to a substantial volume of over eight million compromised records. This underscores the crucial role of next-generation firewall systems and contributes to the ongoing expansion of the market.
The high initial costs are a major challenge faced by the next-generation firewall market, potentially slowing down its growth. Next-generation firewall solutions include the cost of hardware, software licensing, installation, and ongoing maintenance. These costs can be significant, particularly for small and medium-sized enterprises with limited IT expenditures. This high upfront cost may be a barrier, preventing widespread use of next-generation firewalls in this area. When faced with restricted finances, smaller organizations may prioritize urgent operational demands over long-term cybersecurity expenditures. The apparent high cost of next-generation firewalls may cause businesses to postpone or avoid installing this critical security solution.
Next-Generation Firewall Market Trends
The next-generation firewall industry has witnessed significant technological advancements. Advancements in Artificial Intelligence (AI) and Machine Learning (ML) allow next-generation firewalls to analyze network traffic patterns, detect and block even sophisticated zero-day attacks and malware variants in real-time, and continuously learn and adapt to evolving cyber threats, resulting in effective and comprehensive security. Advancements in hardware and software enable next-generation firewalls to handle higher network traffic volumes caused by cloud adoption and the expanding number of connected devices, as well as execute complicated security tasks without sacrificing performance or introducing delay.
For instance, In November 2023, Palo Alto Networks partnered with Amazon Web Services (AWS) to launch the Palo Alto Networks Cloud Next Generation Firewall (NGFW) for AWS. This solution combines Palo Alto Networks' security with AWS's scale, offering advanced security features to organizations deploying applications on AWS. The Palo Alto Networks Cloud NGFW for AWS is a managed service that handles deployment, maintenance, availability, and scaling, allowing organizations to focus on their core business.
Next-Generation Firewall Market Analysis
Based on component, the market is divided into hardware, software, and service. The software segment dominated around USD 2 billion revenue in 2023. Software-based next-generation firewalls eliminate the requirement for specific hardware appliances, resulting in a considerable reduction in initial cost as compared to traditional hardware-based systems. Software solutions can be simply scaled up or down based on an organization's changing security requirements. This adaptability makes them ideal for enterprises with changing network traffic or limited IT resources.
Many suppliers provide subscription-based pricing, allowing organizations to spread the expense over time while avoiding a hefty initial investment. In addition to this, software next-generation firewalls are often easier to implement and handle than hardware-based systems. They may be placed on current IT infrastructure, reducing disturbance and streamlining the installation process.
Based on application, the next-generation firewall market is categorized into SME and large enterprises. The large enterprises segment is anticipated to grow at over 7% CAGR through 2032. Large firms handle massive volumes of sensitive data, such as customer information, financial records, and intellectual property. This makes them excellent targets for cyberattacks, demanding strong security measures such as next-generation firewalls.
Large organizations often have complex network setups that include several sites, cloud deployments, and a wide variety of devices. Next-generation firewalls offer centralized control and complete security throughout this complicated environment. Large corporations have greater IT expenses than smaller firms. This enables them to invest in the upfront fees and ongoing maintenance involved with next-generation firewall systems.
North America next-generation firewall market accounted for 35% of the revenue share in 2023. North American corporations are at the forefront of implementing new technologies such as cloud computing, Big Data, and the Internet of Things (IoT). North America has some of the strictest data privacy laws, such as GDPR (General Data Protection Regulation) and CCPA (California Consumer Privacy Act). Organizations rely heavily on next-generation firewalls to ensure compliance with these standards.
Along with this, North America is a major target for cyberattacks due to its concentration of essential infrastructure, financial institutions, and businesses. To counteract complex cyber-attacks, strong security measures such as next-generation firewalls are required.
Next-Generation Firewall Market Share
Palo Alto Networks and Fortinet hold a significant market share of over 10% in the next-generation firewall industry. These major companies invest heavily in research and development to create innovative solutions that address evolving customer needs. Palo Alto Networks remains at the forefront of security innovation, continually advancing its solutions with state-of-the-art features like machine learning, behavioral analytics, and seamless integration of threat intelligence. This commitment ensures proactive protection against emerging threats and the ever-evolving landscape of security challenges.
Fortinet strengthens its next-generation firewall solutions by incorporating centralized management, automation, and orchestration features. This empowers organizations to efficiently enforce policies, manage configurations, and generate compliance reports across their distributed networks.
Next-Generation Firewall Market Companies
Major players operating in the next-generation firewall industry are:
Next-Generation Firewall Industry News
The next-generation firewall market research report includes in-depth coverage of the industry with estimates & forecast in terms of revenue (USD Billion) from 2018 to 2032, for the following segments:
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Market, By Component
Market, By Deployment Model
Market, By Organization Size
Market, By Application
Market, By End Use
The above information is provided for the following regions and countries:
Research methodology, data sources & validation process
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Our 6-step research process
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4. Market sizing
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5. Forecast model & key assumptions
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✓ Restraining factors and mitigation scenarios
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✓ Technology adoption curve parameter
✓ Macroeconomic assumptions (GDP growth, inflation, currency)
✓ Competitive dynamics and market entry/exit expectations
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Verified data sources
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