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The global next-generation firewall (NGFW) market is estimated to generate revenue of $2,706.9 million in 2019 and $5,188.8 million by 2025, exhibiting a CAGR of 11.9% during the forecast period. The Asia-Pacific (APAC) region is expected to witness the fastest growth, due to the increasing number of cyber-attacks, high demand for internet of things (IoT) devices, and rising number of small- and medium-sized enterprises (SMEs) in the region.
Factors Governing Next-Generation Firewall Market
The increasing adoption of IoT is a key trend in the next-generation firewall market. Presently, businesses are embracing the IoT technology to obtain benefits of multiple enhanced business models, such as the outcome-based, asset-sharing, pay-per-usage models, and get real-time operational insights into equipment monitoring and security issue identification. The use of IoT devices enhances business productivity; however, these devices are exposed to security threats due to internet connectivity. To overcome cyber threats, businesses are adopting NGFW solutions, which are network-friendly and provide defensive competences against internet-based security threats, and various applications and protocols, such as file transfer protocol, secure shell, and internet protocol. Therefore, the rising concerns of companies related to network security and devices lead to the adoption of the NGFW technology.
Another reason for the growth of the next-generation firewall market is traditional firewall’s limitations. The traditional firewall is not able to meet the changing internet security demand of businesses, as it is followed by web protocols and is not efficient enough in distinguishing between different types of web traffic, such as legitimate business applications and inspect the network packet data. It either accepts or rejects the overall data traffic, which is why it turns out to be a non-feasible solution. In the current business scenario, the deployment of virtual machines and applications is increasing, thereby leading to the requirement for enhanced cybersecurity. All such challenges and limitations are eliminated by NGFW solutions, as these add several protection layers, such as intrusion protection and application-level inspection, and enhance the efficiency of traditional firewalls, through protocol protection. Hence, the challenges faced by traditional firewalls due to their limitations are shifting the focus of organizations toward NGFW solutions.
The increasing number of web applications is one of the major factors leading to the growth of the next-generation firewall market. Currently, end users, including the banking, financial services, and insurance (BFSI), retail, aerospace and defense, and healthcare industries, are adopting cloud platforms for data storage, which requires robust protection from cyberattacks. NGFW provides four to eight layers of security, including a network layer, transport layer, application layer, and data link layer, which block the threats through web protocols and web-specific detection engines. Therefore, the demand for new solutions and integrating enhanced security features into the existing solutions would drive the growth of the market.
Next-Generation Firewall Market Segmentation Analysis
Based on component, the services category is expected to witness the higher growth rate during the forecast period. This is attributed to the increasing adoption of IoT devices, which generates the demand for professional services.
On the basis of enterprise size, the large enterprises category would hold the higher market share in 2019. This is attributed to the rising requirement for enhanced digital security in large organizations, to secure and manage large volumes of data.
Based on industry, the BFSI sector is projected to generate the highest revenue in 2019. This is due to the adoption of digital technologies, increasing cyber threats, and growing demand for the safety of customer data.
Geographical Analysis of Next-Generation Firewall Market
Globally, North America would lead the next-generation firewall market in 2019, due to the large number of industry players, including Palo Alto Networks Inc., Dell Technologies Inc., and Cisco Systems Inc., increasing deployment of cloud computing solutions, and government initiatives for public data safety. For example, FY 2019 President’s Budget in the U.S. includes $15 billion for cyber security-related activities, in order to mitigate cyber threats.
The next-generation firewall market is expected to witness the fastest growth in the Asia-Pacific (APAC) region during the forecast period. This can be attributed to the increasing number of SMEs, rising cyber threats, and focus of the governments of regional countries on data security. For example, in 2018, the Personal Data Protection Commission of Singapore imposed penalties of around $4,200 and $5,000 on Grabcar, a carpooling firm, and Club the Chambers, a network gaming center, respectively, for two separate data breach cases, as both of them did not make reasonable security arrangements for people’s personal data.
Competitive Landscape of Next-Generation Firewall Market
The global next-generation firewall market is fragmented and highly competitive, with Cisco Systems Inc., Palo Alto Networks Inc., Dell Technologies Inc., Juniper Networks Inc., Fortinet Inc., Check Point Software Technologies Ltd., Huawei Technologies Co. Ltd., and Barracuda Networks Inc. being the key companies. These players focus on product innovations, partnerships, and mergers and acquisitions to stay ahead in the competition.
For instance, in December 2018, Fortinet Inc. partnered with Symantec Ltd.; as part of the agreement, the NGFW capabilities of Fortinet were integrated with the cloud-delivered web services of Symantec, to provide enhanced cloud security solutions to customers.
Key Questions Addressed/Answered in the Report