Software and SaaS-Based Network Security Revenue to Nearly Double by 2029 to $22 Billion, According to Dell'Oro Group

Enterprises Continue Steady March to Agile and Scalable Software-Centric, Cloud-Delivered Defenses

REDWOOD CITY, Calif., Aug. 5, 2025 /PRNewswire/ -- 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, the worldwide network security spend, including firewall, SSE, traditional SWG appliance, WAF, and ADC segments, is projected to be on a steady upswing through 2029. Total network security revenue, spanning physical appliances, software, and SaaS form factors, is projected to climb from $24 B to $38 B as hybrid work, application migration to cloud, and AI-enabled attacks recalibrate corporate defense strategies. However, the portion of the market sold as software and SaaS-based will significantly outpace physical appliance growth as enterprises appreciate greater agility and scalability, leading to almost a doubling of associated revenue to $22 B.

"Enterprises are accelerating the move to elastic, cloud-centric security so they can adapt as quickly as the threat landscape evolves," said Mauricio Sanchez, Sr. Director, Enterprise Security and Networking at Dell'Oro Group. "Vendors that fuse networking and security into integrated software and SaaS-based platforms will capture the lion's share of the $38 B opportunity ahead," added Sanchez.

Additional highlights from Network Security July 2025 Five-Year Forecast Report encompassing the years from 2024 to 2029:

• Firewalls are projected to remain the largest segment by revenue, expanding at an 8 percent CAGR as virtual firewalls outpace physical refresh cycles.
• Security Service Edge (SSE) is forecast to nearly double to $11 B, growing 14 percent annually as enterprises embrace cloud‑delivered security for users and applications everywhere.
• Web Application Firewalls (WAF) revenue is anticipated to climb at a 14 percent CAGR, lifted by API security mandates and the continued rise of cloud-based applications.
• Application Delivery Controllers (ADC) are projected to hold steady with a one percent CAGR, with software instances offsetting waning demand for hardware.
• Traditional SWG appliances are forecasted to decline at a 4 percent CAGR due to the structural pivot from appliances to SSE.

About the Report
Dell'Oro Group publishes the Network Security 5-year forecasts offering a complete overview of the industry with tables covering the same segments and metrics captured in our quarterly reports. In addition, the forecasts provide a comprehensive overview of market trends by including historical data as far back as 1998. To purchase this report, please contact us at [email protected].

About Dell'Oro Group
Dell'Oro Group is a market research firm that specializes in strategic competitive analysis in the telecommunications, security, 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. 

SOURCE Dell'Oro Group