GLOBAL NEXT GENERATION FIREWALL MARKET SIZE AND SHARE ANALYSIS - GROWTH TRENDS AND FORECASTS (2023 - 2030)

The global Next Generation Firewall market size was valued at US$ 3.66 billion in 2023 and is expected to reach US$ 8.34 billion by 2030, grow at a compound annual growth rate (CAGR) of 12.5% from 2023 to 2030. Next generation firewalls (NGFWs) are network security devices that provide integrated and advanced security functionalities beyond traditional stateful firewalls. NGFWs offer capabilities like application control, intrusion prevention (IPS), and quality of service (QoS) to provide enhanced protection against evolving cyber threats. The key drivers of the NGFW market include rising instances of data breaches, increasing IoT connectivity, stringent regulations, and rapid urbanization.

The Global Next Generation Firewall Market is segmented by component, deployment, organization size, industry vertical, and region. By component, the market is segmented into solution and services. The services segment is further divided into managed services and professional services. The solution segment is expected to account for the largest market share during the forecast period owing to the growing need for advanced network security solutions.

Next Generation Firewall Market Regional Insights

• North America is expected to be the largest market for Global Next Generation Firewall Market during the forecast period, accounting for over 40% of the market share in 2022. The growth of the market in North America is attributed to early adoption of advanced technologies, presence of leading NGFW vendors, and stringent regulations regarding data security and privacy.
• The Asia Pacific market is expected to be the second-largest market for Global Next Generation Firewall Market, accounting for over 30% of the market share in 2022. The growth of the market in is attributed to increasing cyberattacks, rapid digital transformation, and high penetration of cloud computing in countries like China, Japan and India.
• The Middle East & Africa market is expected to be the fastest-growing market for Global Next Generation Firewall Market, with a CAGR of 15% during the forecast period. The growth of the market in Middle East & Africa is attributed to increasing data breaches, adoption of cloud-based solutions, and investments in network security infrastructure.

 Figure 1. Global Next Generation Firewall Market Share (%), by Region, 2023

Next Generation Firewall Market Drivers:

• Increasing Instances of Cyber Attacks and Data Breaches: The rising cases of cyberattacks and data breaches across enterprises are a major factor driving the growth of the global next generation firewall market. High profile data breaches resulting in loss of sensitive consumer and enterprise data have highlighted the vulnerabilities in existing network security infrastructures. NGFWs provide advanced threat protection capabilities such as intrusion prevention, malware analysis, application control and more to mitigate risks of attacks. Their integrated security functionalities offer superior protection compared to traditional firewalls. Many governments worldwide have also imposed regulations around data security and privacy which is compelling businesses to adopt NGFWs.
• Growth in BYOD and IoT trends: The growing Bring Your Own Device (BYOD) trend across enterprises is contributing to the increased adoption of next generation firewalls. NGFWs help organizations securely enable BYOD policies by providing granular visibility and control over network traffic. Their capabilities like user identity-based access control, device profiling, and malware analysis help address security risks associated with BYOD. Additionally, the exponential growth in IoT connected devices is also creating new network security challenges which NGFWs are equipped to handle through their advanced threat detection capabilities.
• Migration to Cloud Environments: The rapid migration to cloud computing platforms among enterprises is a key factor driving NGFW adoption. Traditional firewalls are unable to provide sufficient security for virtualized networks and cloud environments. NGFWs are designed to secure dynamic cloud infrastructures through capabilities like centralized policy management, automation integration, and support for virtual form factors. Leading NGFW vendors offer cloud-based and as-a-service models to secure multi-cloud environments. As cloud platforms become ubiquitous, the demand for cloud-based NGFW solutions will increase.
• Shortage of Skilled Security Professionals: The growing shortage of skilled cybersecurity professionals worldwide is making organizations more reliant on advanced network security solutions like NGFWs which provide automated threat prevention. NGFWs utilize technologies like machine learning, artificial intelligence and big data analytics to provide proactive threat monitoring and incident response capabilities while reducing the burden on security staff. Their automated features like policy recommendations and one-touch compliance reporting enable resource-constrained security teams to effectively manage network security.

Next Generation Firewall Market Opportunities:

• Adoption by Small and Medium Businesses: Widespread adoption of NGFWs in large enterprises is creating significant opportunities for next generation firewall vendors to target small and medium businesses (SMBs). SMBs largely rely on basic firewalls and have limited security staff and budgets. Scaled-down, economical NGFW solutions tailored for SMBs would allow vendors to expand their target market. Simplified cloud-based or virtual NGFW deployments requiring minimal maintenance are likely to witness increasing demand among SMBs.
• Integration of Advanced Capabilities: Integrating advanced capabilities like artificial intelligence, threat intelligence feeds, deception technology, sandboxing, SIEM, and more into NGFWs provides vendors potential opportunities to differentiate their offerings. As cyber threats become more sophisticated, customers will look for NGFWs that leverage automation, machine learning and other emerging technologies to provide superior detection and response. Vendors that continuously invest in integrating complementary security capabilities within their NGFW portfolio can gain competitive advantage.
• Addressing Industry-specific Security Needs: Developing industry-specific NGFW solutions designed to meet the unique network security requirements of verticals such as government, BFSI, healthcare, retail and energy provides product differentiation opportunities. Customized features addressing sector-specific challenges like regulatory mandates, proprietary communication protocols, specialized vulnerabilities and more allows vendors to increase their market share across industries. A more targeted approach to industry verticals can expand customer base.
• Launching Innovative Commercial Models: Launching innovative licensing options, pricing models and enterprise packages for NGFWs gives vendors opportunities to attract new customers and generate recurring revenue streams. Models like firewall-as-a-service, secure SD-WAN, malware protection as a service, unlimited log retention, and all-inclusive enterprise bundles can provide cost-effective options for organizations to modernize network security. Customizable commercial models that provide flexibility can help address affordability concerns around new NGFW purchases.

Next Generation Firewall Market Trends:

• Transition to Secure SD-WAN Environments: The adoption of SD-WAN (software-defined wide area network) architecture by enterprises is a major transition that is influencing NGFW capabilities. Leading firewall vendors are integrating SD-WAN functionalities into NGFWs to support secure SD-WAN connectivity across distributed enterprise networks and remote sites. Centralized orchestration, quality of service controls, WAN optimization, dynamic path selection, and other SD-WAN features are being combined with core NGFW security for a comprehensive solution. As SD-WAN gains traction, the demand for integrated secure SD-WAN platforms will rise.
• Cloud-Delivered and As-a-Service Models: The growing trend towards consumption-based business models is also prevalent in the NGFW market with vendors offering cloud-hosted, virtual and firewall-as-a-service solutions. Cloud-based management of NGFW capabilities provides customers with operational flexibility and hassle-free maintenance. Managed security service providers (MSSPs) are leveraging NGFW vendor platforms to deliver managed firewall services on demand. As-a-service models are key for distributed enterprises seeking to implement robust network security across on-premise and cloud environments.
• Support for Multi-Cloud Environments: As multi-cloud and hybrid cloud adoption increases, customers are looking for NGFWs that can provide unified security across diverse cloud environments and platforms. Leading firewall vendors now offer NGFW solutions tailored specifically for hybrid/multi-cloud networks, with centralized visibility, automation integration, infrastructure-independent policies, and support for major cloud platforms like AWS, Google Cloud and Azure. Cloud-native, containerized NGFWs deployed using infra-as-code templates are becoming more common.
• Integration of Artificial Intelligence and Machine Learning: Integrating artificial intelligence (AI), machine learning and advanced data analytics techniques into NGFW solutions for intelligent and automated threat detection is a growing technology trend. Top firewall vendors are incorporating unsupervised learning, neural networks, computer vision, natural language processing and more into core NGFW capabilities like malware analysis, network traffic monitoring, log correlation and behavior analytics. AI and ML enhance the insight, decision-making skills and response capabilities of NGFWs.

Next Generation Firewall Market Restraints:

• Migration Challenges in Complex Environments: Enterprises with large legacy networks, outdated security architectures and heterogeneous environments often face migration and interoperability challenges while shifting to new NGFW solutions. Integrating and replacing legacy hardware, re-architecting complex networks, changing policies and managing disrupted operations during NGFW deployment can be cumbersome. Lack of in-house technical expertise and the disruption caused hinders adoption, especially for businesses with expansive traditional networks.
• Budgetary Constraints: The high capital investment and implementation costs associated with procuring, installing and managing new NGFW solutions is a market restraint, especially from the perspective of small and resource-constrained organizations. Many companies find it difficult to justify large investments in next-gen firewalls to their management. Scaled down, lower cost NGFW offerings for SMBs and lean enterprise models are still emerging. Availability of open source and commercial basic firewall options also limits uptake.
• Performance Impact: The resource intensive threat analysis and inspection capabilities of NGFWs can degrade network performance and impair user experience if not sized and implemented properly. Introducing bottlenecks while examining traffic in detail over multi-Gbps lines hampers productivity and adoption. Striking an optimal balance between security and user experience is key for customer retention. As NGFW vendors introduce hardware and software optimizations to minimize performance lag, this restraint is expected to reduce.

Recent Developments

New product launches

• In March 2022, Fortinet launched FortiGate 4400F, a next-generation firewall with threat protection capabilities powered by AI to protect large enterprises and service providers.
• In January 2021, Palo Alto Networks introduced Okyo Garde, an enterprise-grade firewall delivered as a service to secure network traffic passing through hybrid and multi-cloud environments.
• In June 2020, Check Point launched Quantum Spark, an advanced AI-based threat prevention engine to detect known and unknown malware with high accuracy.

Acquisition and partnerships

• In October 2021, Fortinet acquired CP Secure, a SASE platform provider, to strengthen its cloud security offerings.
• In June 2020, Palo Alto Networks acquired CloudGenix to enhance its secure SD-WAN capabilities.
• In March 2019, Zscaler acquired TrustPath, a cloud security posture management company, to augment its cloud security platform.

Figure 2. Global Next Generation Firewall Market Share (%), by Deployment, 2023

Top companies in Next Generation Firewall Market

• Cisco Systems
• Juniper Networks
• Fortinet
• Palo Alto Networks
• Barracuda Networks
• Forcepoint
• Zscaler
• Watchguard Technologies
• Sophos
• Check Point Software Technologies
• Hillstone Networks
• Huawei Technologies
• Untangle
• Stormshield
• SonicWall
• NetGate
• Smoothwall
• Sangfor Technologies
• Microsoft
• VMware

*Definition: The global next generation firewall market refers to the industry surrounding advanced network security firewall appliances and services that provide integrated and cutting-edge functionalities beyond traditional stateful firewalls. Next generation firewalls combine capabilities like deep packet inspection, integrated intrusion prevention, application control, SSL/SSH inspection, website filtering, quality of service, and antivirus/antispyware to offer superior threat protection for modern networks and data centers.

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