Campus Over Cloud: The Resurgence of On-Premises Network Security
Network security has never been more paramount in a dynamic digital transformation era. However, a fresh perspective from Dell’Oro Group suggests that the trajectory of enterprise network security investment is shifting—favoring campus, branch, and user edge deployments over traditional data center solutions.
During the height of the COVID-19 pandemic, businesses raced to fortify their digital assets. Investments poured into high-end and web application firewalls, aligning with an aggressive drive toward digital transformation. Yet, this trend is winding down, according to Mauricio Sanchez, senior director of enterprise security and networking at Dell'Oro Group.
He notes, “Spending on data center security solutions accelerated during the pandemic but is now decelerating and is expected to continue this trend for the upcoming years.”
Instead, there’s an evident pivot towards enhancing campus security infrastructure, ensuring optimum online experiences for employees, whether they are working remotely or from the office. While security service edge (SSE) remains robust for remote work, the spotlight is now on mid- and low-end firewalls installed on-premises.
Dell'Oro Group's recently published Five-Year Forecast Report for 2023 to 2027 vividly depicts the network security market's evolving dynamics. The report anticipates network security sales to reach USD144 billion, marking a slight yet significant growth from the previous USD142 billion estimate in January 2023.
However, high-end firewalls are projected to see a one percent reduction in their five-year compound annual growth rate, translating to a possible USD3 billion drop in revenue. Conversely, there's positive news, with mid- and low-end firewall revenue forecasts increasing by USD2 billion and SSE revenue predictions rising by over USD 1 billion. The Network Security market is expected to witness a low double-digit CAGR throughout the forecast period.
With a tumultuous couple of years behind them, enterprises worldwide are re-evaluating their security strategies. While the pandemic-driven rush to digitalize led to a surge in data center security investments, the rising tide of hybrid work models is steering the industry toward a new direction: safeguarding campus edges and on-premises networks. Only time will tell how this shift impacts the broader network security landscape.
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