Enterprises Double Down to Counter AI-centric Threats, Shrugging off Tariffs
REDWOOD CITY, Calif., June 5, 2025 -- According to a recently published report from Dell'Oro Group, the trusted source for market information about the telecommunications, security, networks, and data center industries, global Network Security revenue reached $6.2 B in 1Q 2025, expanding 12 percent year-over-year (Y/Y). The Application Security & Delivery (AS&D) submarket—encompassing Web Application Firewalls (WAF) and Application Delivery Controllers (ADCs)—grew 21 percent due to AI-centric threats compelling organizations to harden front-end services and API using a combination of virtual and SaaS-based solutions.
"The remarkable rise of SaaS and virtual network security solutions has fundamentally reshaped enterprise cybersecurity strategies, creating a dynamic where hardware now trails cloud-based innovation," said Mauricio Sanchez, Sr. Director, Enterprise Security and Networking at Dell'Oro Group. "Yet, physical appliances will regain modest momentum, particularly in Firewalls and ADCs, as inventory levels normalize and deferred upgrades resume."
Additional highlights from the 1Q 2025 Network Security Quarterly Report:
- Network Security market projected to eclipse $26 B in 2025, reflecting high single-digit growth powered by zero-trust mandates, AI workloads, and continued cloud workload expansion.
- Within AS&D, virtual ADC revenue jumped 49 percent Y/Y while SaaS WAF accelerated by 21 percent.
- Firewall revenue rebounded 8 percent Y/Y, with physical appliances up 5 percent and virtual firewalls advancing 27 percent.
- Security Service Edge (SSE) revenue climbed 15 percent Y/Y.
- Secure Web Gateway (SWG) appliance sales declined 5 percent Y/Y, underscoring migration toward SSE suites.
- Virtual and SaaS-based Network Security solutions captured 78 percent of new spend.
About the Report
The Dell'Oro Group Network Security Report includes manufacturers' revenue covering the ADC, Firewall, SSE, traditional SWG appliances, and WAF product segments. Moreover, SSEs are further broken down across four primary functions: CASB, FWaaS, SWG, and ZTNA. The report also splits many segments by form factor: physical, virtual, and SaaS. To purchase this report, please contact us at dgsales@delloro.com.
About Dell'Oro Group
Dell'Oro Group is a market research firm that specializes in strategic competitive analysis in the telecommunications, security, enterprise networks, and data center markets. Our firm provides in-depth quantitative data and qualitative analysis to facilitate critical, fact-based business decisions. For more information, contact Dell'Oro Group at +1.650.622.9400 or visit https://www.delloro.com.
This News is brought to you by Qube Mark, your trusted source for the latest updates and insights in marketing technology. Stay tuned for more groundbreaking innovations in the world of technology.
