In Q3 2021, SaaS-based network security generates $1.2 billion in revenue

Spikes in ransomware and malware attacks are likely keeping CISOs awake at night, but the network security market can relax because of the increased demand for cybersecurity services in Q3 2021.

According to a recent Dell’Oro Group report, revenue for software-as-a-service (SaaS)-based network security, which includes cloud-delivered email security, Secure Web Gateway (SWG), and Web Application Firewalls (WAF), increased 26 percent year-over-year to reach $1.2 billion in Q3 2021.

“This quarter’s growth reflects an uncommon alignment between enterprise IT teams asking for more security investment and business leadership willing to do so,”

Mauricio Sanchez, research director, network security at Dell’Oro Group

The potential impact of cybersecurity threats on enterprises is becoming increasingly problematic. In a recent Light Reading podcast, Bruce Snell, VP of security strategy and transformation at NTT Security, discussed the ransomware-as-a-service market.

“Year-over-year [ransomware attacks] becomes a bigger issue. The thing that worries me the most is the development of the ransomware-as-a-service market, and I think that’ll cause us the biggest trouble moving forward.”

Bruce Snell, VP of security strategy and transformation at NTT Security

According to Dell’Oro, these new security threats, enterprise cloud migration, and pent-up demand for security services are among the factors driving the SaaS-based network security market. According to the research firm, this market has “largely overcome the supply chain chaos affecting other markets, as vendors have deftly maneuvered to satisfy demand.” 

Furthermore, SaaS-based SWG revenue increased 35% year on year in Q3 and is expected to exceed $2 billion in revenue in 2021. Dell’Oro points out that SWG now uses the acronym Secure Service Edge (SSE), a shortened version of Gartner’s term Secure Access Service Edge (SASE), which defines the convergence of networking and security services.

Physical firewall appliance revenue increased 14 percent year on year in the third quarter and is expected to reach $10 billion by 2021.

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