Next-generation Firewall Market

Updated on : July 11, 2024

Next Generation Firewalls (NGFWs) Market Size

The Next Generation Firewalls Market size is expected to rise at a compound annual growth rate (CAGR) of 11.4%, from USD 5.0 billion to USD 8.6 billion between 2023 and 2028. The increasing emphasis on regulatory compliance in the evolving cybersecurity landscape propels NGFWs providers like Palo Alto Networks, Cisco, and Fortinet to integrate features such as application control and intrusion prevention. As global data protection laws, like GDPR and CCPA, become more stringent, the surge in demand for compliance-driven solutions places NGFWs providers at the forefront. They offer tailored solutions, addressing the complex regulatory landscape and securing enterprises against evolving cyber threats.

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Next Generation Firewall Market Dynamics

Driver: Surge in remote work drives demand for next-generation firewall solutions

The proliferation of remote work has spurred a heightened demand for advanced security solutions, particularly Next-Generation Firewalls. This shift has intensified the need for robust protection against evolving cyber threats in the decentralized workforce landscape. NGFWs, equipped with advanced threat detection and prevention mechanisms, play a pivotal role in safeguarding organizations' networks and data. With the surge in phishing attacks targeting remote employees, the imperative for sophisticated security measures has never been clearer. Notably, reports such as the March 2022 Alliance Virtual Offices report, which revealed a staggering 238% increase in cyberattacks during the COVID-19 pandemic, and a 2022 study by IBM indicating a 72% surge in cyberattacks targeting remote workers in the same year, underscore the heightened cybersecurity challenges associated with the global shift to remote work. To address these challenges, companies strategically deploy advanced NGFW solutions such as Barracuda CloudGen Firewall and Cisco Secure Firewall, ensuring secure remote access and data transmission in the evolving remote work environment.

Restraint: Traditional firewall loyalty challenges next-generation firewall adoption

In the realm of Next-Generation Firewalls, a significant barrier to widespread adoption lies in the resistance to change from conventional firewall solutions. Many organizations, deeply entrenched in familiar legacy firewall systems, exhibit hesitancy toward transitioning to newer technologies. This reluctance is fueled by concerns about potential risks, disruption to existing operations, and a lack of awareness regarding the enhanced capabilities of NGFWs in addressing modern cyber threats. For example, migrating from 'stateful' inspection firewalls to NGFWs may trigger uncertainties and reluctance due to perceived challenges in the transition process. Overcoming this resistance necessitates comprehensive education, clear demonstrations of benefits, and effective communication strategies to instill confidence in the superior efficacy of NGFWs solutions compared to traditional alternatives.

Opportunity: Cloud adoption drives demand for next-generation firewalls

The surge in cloud adoption across industries intensifies the need for Next-Generation Firewalls as organizations prioritize securing their cloud-based infrastructures. From Software as a Service (SaaS) to Infrastructure as a Service (IaaS), cloud services necessitate robust security measures to protect sensitive data and applications. NGFWs, equipped to inspect encrypted traffic, manage application usage, and identify advanced threats, emerge as vital components of cloud security strategies. Leading cloud providers like AWS and Microsoft Azure emphasize the integration of NGFWs for heightened protection. For instance, the shared responsibility model in cloud security underscores the importance of customers implementing NGFWs to fortify their security posture. As cloud adoption continues to accelerate for its efficiency and scalability, the demand for NGFWs intensifies to ensure secure and compliant cloud environments.

Challenge:Crucial Need for Robust Evaluation in Next-Generation Firewall Security

Ensuring the effectiveness of Next-Generation Firewalls (NGFWs) necessitates consistent and comprehensive testing and auditing procedures. The evolving landscape of cyber threats requires stringent evaluation protocols to ensure NGFWs can effectively counter sophisticated attacks. Without standardized testing frameworks, vulnerabilities may remain undetected, leaving organizations susceptible to breaches. For instance, while guidelines such as those provided by the OWASP exist for web application firewalls, a lack of uniform standards within the broader NGFW domain impedes the establishment of performance and security benchmarks. This absence of consistency poses risks, as organizations may deploy NGFW solutions without a clear understanding of their resilience in diverse threat scenarios.

Next Generation Firewall Market Ecosystem

By vertical, healthcare is expected to grow at the highest CAGR during the forecast period.

The healthcare segment is experiencing the fastest growth rate in the Next-Generation Firewall (NGFW) marke due to factors such as increased reliance on technology and stricter regulations. Healthcare organizations increasingly store and transmit sensitive patient data electronically, rendering them vulnerable to cyberattacks. NGFWs offer advanced security features like intrusion detection, deep packet inspection, and application control to safeguard this data. Moreover, regulations like HIPAA in the US and GDPR in Europe mandate strong data security measures, further emphasizing the need for NGFWs to ensure compliance.

With the rise of connected medical devices and wearables, more entry points for attackers emerge, underscoring the importance of NGFWs in securing these devices and associated networks. As healthcare organizations become more cognizant of cyber threats, they invest in cybersecurity solutions like NGFWs to fortify their defenses and protect patient information, thereby driving the significant growth witnessed in this sector.

By deployment mode, the cloud/virtual is expected to grow at the highest CAGR during the forecast period.

Cloud/Virtual deployment mode is poised to experience the most rapid growth, driven by its ability to address critical business needs within the next-generation firewall market. The agility and scalability offered by cloud-based NGFWs cater to dynamic environments and changing security requirements, ensuring adaptability to fluctuating network traffic. Significantly, eliminating dedicated hardware reduces upfront costs, ongoing maintenance expenses, and power consumption, enhancing affordability for organizations of all sizes. Cloud deployment's simplified management, facilitated by cloud providers, allows IT teams to focus on strategic security initiatives, streamlining deployment and configuration across distributed locations. The accessibility of cloud-based NGFWs from anywhere with an internet connection fosters secure remote access, which is particularly advantageous for organizations with dispersed workforces. Moreover, the rapid updates and threat detection capabilities delivered by cloud providers and seamless integration with other cloud-based security tools contribute to a comprehensive cybersecurity posture, making cloud/virtual deployment mode the fastest-growing segment in the NGFW market.

By region, North America accounts for the highest market size during the forecast period.

The North American region dominates the Next-Generation Firewall market, boasting the largest market share due to the presence of leading NGFW vendors, including Palo Alto Networks, Fortinet, and Check Point Software Technologies, which fosters a vibrant ecosystem for NGFW development and adoption. Moreover, stringent data security regulations such as HIPAA, GBLA, CISA, and GDPR are also driving the growth for advanced technologies like NGFWs in this region.

High IT spending capacity and mature cybersecurity awareness further contribute to the region's dominance, with businesses readily investing in sophisticated NGFW solutions to safeguard critical data against evolving cyber threats. Additionally, the high rate of cloud adoption in North America fuels the demand for cloud based NGFW deployments, solidifying the region's position as a key player in the NGFW market landscape.

The key players in the next generation firewall market are Palo Alto Networks (US), Cisco (US), Fortinet (US), Check Point (Israel), Juniper Networks (US), Barracuda Networks (US), SonicWall (US), Zscaler (US), Forcepoint (US), Hillstone Networks (US), and others.

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Scope of the Report

The study categorizes the next generation firewall market by segments - offering, application, organization size, deployment mode, vertical, and region.

By Offering:

• Hardware
• Software
• Services

By Application:

• Application Visibility and Control
• Intrusion Detection & Prevention System (IDS/IPS)
• Content Filtering
• User And Identity Awareness
• SSL/TLS Inspection
• Advanced Threat Protection
• Other Applications

By Organization Size:

• Large Enterprises
• Small and Medium Enterprises (SMEs)

By Deployment Mode:

• On-Premises
• Cloud/Virtual

Vertical:

• BFSI
• Government
• Healthcare
• Telecommunications
• IT and ITeS
• Retail and eCommerce
• Energy and Utilities
• Manufacturing
• Other Verticals

By Region:

• North America
• Europe
• Asia Pacific
• Middle East & Africa
• Latin America

Recent Developments

1. In September 2023, Cisco unveiled Secure Firewall 4200 Series appliances and Threat Defense 7.4 software, introducing cutting-edge capabilities for new-normal firewalling. Leveraging inference-based traffic classification and collaboration across the Cisco portfolio, it addresses the challenges of hybrid work and encrypted traffic profiles, offering enhanced threat visibility and streamlined operations.
2. In May 2023, Palo Alto Networks launched Cloud NGFW for Azure, integrating its ML-powered next-generation Firewall as a fully managed Azure-native ISV service. This solution brings Advanced Threat Prevention, URL Filtering, WildFire, and DNS Security powered by AI and ML. It effectively halts known, unknown, and zero-day threats, facilitating secure and accelerated application migration to Microsoft Azure.
3. In November 2022, Fortinet introduced the FortiGate 1000F series, a cutting-edge next-generation firewall (NGFW) boasting unparalleled performance and energy efficiency. Leveraging purpose-built security processing units, it offers 7.4x faster firewall throughput, 7x higher IPsec VPN performance, and advanced threat protection, ensuring robust security for enterprise data centers.
4. In January 2022, Check Point and NVIDIA partnered to integrate Quantum Lightspeed hyper-fast firewalls with NVIDIA's advanced ASIC, achieving line-rate firewall performance at network speed. This partnership introduces a significant network security revolution, offering 10x lower latency and 5x faster security throughput, with 20x better price performance than competitors.

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