Sales of network security solutions are expected to surpass $150 billion over the next five years, as “security angst” drives companies to invest in better protection even at a time of inflated prices and other macroeconomic uncertainty, according to research firm Dell’Oro Group. The prediction is part of its recently released “Network Security 5-Year Forecast.”
Mauricio Sanchez, Research Director for Network Security and SASE & SD-WAN at Dell’Oro Group, told Fierce Telecom via email that while “stubbornly high inflation and a regional war in Europe” is causing near-term softer spending in the market, “what we hear is that security budgets are flush due to the massive security angst. One CISO I recently spoke with said that pre-pandemic the internet was a tough neighborhood. After the pandemic hit, they said the internet had become all out warfare as hackers launched all variety of attacks (ransomware, DDoS, etc.) on a daily basis. We foresee that security budgets may be one of the last to be touched in any enterprise budget tightening.”
Inflation is not necessarily causing enterprises to be more selective about how they invest their network security dollars, though this could happen in some cases, he added.
“A well-run enterprise should always be evaluating its security investments against its risk exposure and ensuring they are securing what actually needs to be secured irrespective of the economic climate,” he said. “For other enterprises, I can imagine any forthcoming budget belt tightening will force conversations and lead to better security investment decisions. As it is, so often enterprises get enamored by new, shiny security chrome and solutions, which leads to less than stellar investments.”
However, one new, shiny security segment that might be worth their attention is the Security Services Edge (SSE). While security has been part of the Secure Access Service Edge (SASE) since the day three years ago when another research firm–Gartner–coined the phrase, it may have appeared to be more about SD-WAN and networking.
“Up until the SSE term arrived, security vendors tried to embrace the SASE banner,” Sanchez said. “However, because SASE is both about networking and security, the term really didn’t fit them well. If anything, it confused prospective customers further, which then extended already long sales cycles even more. So, enter SSE as a term that security vendors can embrace.”
Focusing on SSE and the likelihood that many enterprises see SASE as a multi-vendor investment involving both networking and security specialists could help improve and shorten the sales cycle for network security, Sanchez said.
The SSE segment is typically viewed as a collection of technologies, namely Zero Trust Network Access (ZTNA), Firewall-as-a-Service (FaaS), Secure Web Gateway (SWG) and Cloud Access Security Broker (CASB), though the SSE umbrella can include other technologies.
According to the Dell’Oro forecast, SSE market revenue is expected to have a compound annual growth rate of nearly 30% from 2021 to 2026, with SWG and CASB anticipated to be the most significant revenue components during the period, but ZTNA and FaaS are estimated to flourish at a faster rate.
Software-as-a-service security solutions could account for $60 billion in revenue between 2021 and 2026. Meanwhile, the overall firewall market is expected to remain the largest network security segment by revenue, and is forecast to grow at an 8% CAGR over the forecast horizon, Dell’Oro said.