Network Security Market

Market Overview

The global network security market size was worth at USD 25,196 million in 2021, which is expected to grow to USD 86,676 million with a CAGR of 16.7% during the forecast period.

Network security encompasses a vast array of technology, equipment, and procedures. Digital technologies have taken over every part of daily life, from simple smartphones used for connectivity to complicated software and electronics implemented in applications requiring the highest level of security. For instance, a recent technology defined as "Edge computing" is gaining significant interest in the commercial sectors since it minimizes the overall latency of acquiring data from various servers.

In addition, it is anticipated that edge computing would raise demand for similar technologies such as the Internet of Things (IoT) and cloud computing. Network security is a collection of technology that safeguards the usefulness and integrity of an organization's architecture by preventing the transmission or spread of several potential dangers within a network. A network security structure comprises technologies that safeguard the network and its applications. Optimal network security strategies involve diverse, scalable, and automated lines of defense. Each defensive layer implements a set of administrator-defined security regulations. Regardless of size, industry, or infrastructure, every company needs network security solutions to protect it from the ever-expanding landscape of cyber threats in the wild today.

With the increase in cyber-incidents, consumer data security is at significant risk, driving the expansion of network security solutions. The European Union has implemented the General Data Protection Regulation (GDPR), which enforces seven principles: fairness, openness, legality, purpose limitation, reliability, storage limitation, data minimization, integrity and confidentiality, and accountability. GDPR aims for responsible personal data handling. Personal data is processed by collecting, organizing, structuring, storing, modifying, informing, utilizing, interacting, combining, limiting, eliminating, or destroying it. Compliance laws such as the General Data Protection Regulation (GDPR) and other comparable legislation require businesses to implement network security solutions into their network architecture. Adopting effective security measures supported by mandated government policies has created a lucrative market for network security solutions. Massive emphasis on data security and privacy has emerged as one of the most notable factors driving the global network security market expansion. In addition, the escalation of cybercrimes accompanied by enormous losses has necessitated the implementation of comprehensive network security solutions.

Market Dynamics

Market Driving Factors

• Growing Concerns Regarding Data Security and Privacy to Drive Market

Global demand for security solutions has increased tremendously over the past few decades. Cyber and network security have gained immense popularity and demand due to increased government policies for the safety and privacy of user data, increased cyber and network attacks, and the importance of corporate data. The security of client data is one of the primary development drivers for the global network security market. The European Union has implemented the General Data Protection Regulation (GDPR), which enforces seven principles of fairness, openness, legality, purpose limitation, accuracy, storage limitation, data minimization, integrity & confidentiality, and accountability. GDPR aims for responsible personal data handling. Personal data is processed by collecting, organizing, structuring, storing, modifying, informing, utilizing, interacting, combining, limiting, eliminating, or destroying it. Compliance requirements such as the General Data Protection Regulation (GDPR) and other comparable regulations compel businesses to implement network security solutions into their network infrastructure, driving end users' adoption of these solutions.

Market Restraining Factors

• High Cost of Set-up to Hinder Market Growth to Restrict Market Growth

The cost of installation, configuration, and maintenance is one of the most significant obstacles when deploying network security solutions in an organization's infrastructure. It is projected that digital security relies significantly on data-driven technologies and requires very complex and costly tools with high running costs that will hinder the growth of the global network security market. Nevertheless, the need and relevance of a robust internet security infrastructure in a modern business environment outweigh the high initial cost of equipment for network security solutions. Organizations are observed opting for advanced network security equipment despite their high costs due to the increased security threats in the modern corporate world.

Key Market Opportunities

• Transformation Towards Digitalization Trend Worldwide to Spur Market Opportunities to Boost Market Opportunities

The adoption of network security solutions is necessitated by the significant shift of organizations toward digital trends in the modern world and the increasing reliance of organizations and their activities on digital technologies for various reasons, including data storage and payments running the entire business online. Corporations invest in the Internet of Things to operate their operations (IoT). This increase in popularity and penetration of smartphones, smart cars, smart homes, and cloud services provides cybercriminals with fertile ground. Strengthening the network security of businesses, public spaces, and private and public assets is vital to combat this issue in the current digital environment. Various organizations have increased security budgets and expenditures in response to such issues. Consequently, organizations and corporations are raising their security budgets to ensure the safety of their digital infrastructure. This portends future growth potential for the global network security market.

Regional Analysis

The regional segmentation of the global network security market includes North America, Europe, Asia-Pacific, and LAMEA.

North America and Asia-Pacific are expected to dominate the regional market

North America is estimated to command the regional market with a CAGR of 15.8% during the forecast period. The market for network security is expanding fast in the United States due to the widespread adoption of network solutions among organizations. In addition, an increase in data breaches and a rise in cyberattacks with a financial focus have prompted firms to seek pre-network security solutions. In addition, the leading providers of Internet security solutions are located in North America, offering a strong development potential for users in this industry. The timely implementation of network security software solutions and several manufacturers offering Distributed Denial of Service (DDoS) protection is anticipated to stimulate regional market growth. Aerospace, defense, and intelligence industries also expand the North American market. The area has made substantial investments in cyber security solutions to prevent the theft of smart assets and compromise systems used to monitor and operate security systems and the state.

Asia-Pacific is expected to grow at a higher CAGR of 18.7% and hold the second largest share of USD 34,734 million during the forecast period. As enterprises in the Asia-Pacific region have begun to embrace the digital revolution, increasing the number of current threats could threaten their cyber security. Organizations are increasingly selecting cyber security solutions that provide complete visibility at each stage of the attack lifecycle to effectively manage cyber security threats, including attack forecasting, detection, prevention, mitigation, and response. The region's majority of governments have adopted data security, residential, or privacy rules and legislation requiring firms to monitor IT and OT security status. Regulating the General Data Protection Regulation in 2018 has prompted regional firms to increase their security spending. Strict cyber rules and enforcement measures compelled businesses to invest in cybersecurity to comply with regulations.

Segmental Analysis

The global network security market is segmented based on component, deployment mode, organization size, industry vertical, and region.

By Components

Based on components, the market classification is done into solution and service.

The solution is estimated to hold the share with a CAGR of 16.6% during the forecast period. A robust network security system reduces the likelihood of data loss, theft, and damage. The advent of virtualization technology and the increase in web-based applications are two aspects that contribute to the expansion of the market for network security solutions. Network security protects enterprises' communications against illegal access and data exploitation. To lower the danger of cyber-attacks, there is a growing demand for enhanced security services and the integration of network security solutions with other security services. The rising demand for cloud-based security solutions is a significant driver driving the expansion of the market for network security solutions. In addition, an increase in the number of DDoS assaults, mergers, and acquisitions is also anticipated to contribute to the expansion of the market. Network security software solutions include,

• Firewall
• Antivirus/Antimalware
• Network Access Control (NAC)
• Data Loss Prevention (DLP)
• Intrusion Detection System (IDS) 
• Intrusion Prevention System (IPS)
• Secure Web Gateways
• Distributed Denial of Service (DDoS) Mitigation
• Unified Threat Management (UTM)
• Vulnerability Scanning
• Sandboxing
• Others (Compliance Management, Uniform Resource Locator [URL] Filtering, and Network and Software Auditing).

Network security consists of services and solutions to prevent malfunction, exploitation, and unauthorized access. In recent years, the importance of network security has increased due to the proliferation of hackers. Network security market services are crucial for security maintenance and upgrading security services, strengthening protection, and deterring cyberattacks. Services can be bifurcated into

• Professional services
• Managed services

The network security market is classified as on-premise and cloud-based on the deployment model.

Cloud deployment is estimated to hold the largest share and grow with the highest CAGR of 17.5% during the forecast period. Cloud or cloud computing security involves collecting methods, technologies, rules, and controls to safeguard data on cloud-based servers. Cost-effectiveness, the significance of cyber security, and the highly automated nature of cloud security drive cloud deployment network security market expansion. In addition, the evolution of advanced technology and the intense competition among third-party suppliers create ample chances for network security market expansion. Cost-effectiveness and the availability of quick services are the primary elements driving this model's adoption. This deployment type is anticipated to expand rapidly and surpass on-premise deployment models.

On-premise network security refers to security measures physically located in the business's facilities. On-premises security refers to the policies and mechanisms designed to safeguard the security and efficiency of computer networks, both hardware, and software. Firewalls, VPNs, and antivirus software are examples and physical security measures.

By Organization Size

Based on organization size, the market classification includes small & medium enterprises and large enterprises.

Small & medium enterprises are estimated to generate the largest share, with a CAGR of 16.6%. Normal-sized or small & medium-sized businesses have a smaller budget for security analysis, indicating the necessity for comprehensive security solutions to monitor system design and prevent massive attacks. Increased cyber threats at the network point and BYOD (bring your own device) rules contribute to expanding the network security market. Increased server visibility results in adopting new and creative network security solutions, causing the global network security industry to expand indefinitely.

Large enterprises contain a vast quantity of sensitive data. There has been an increase in the need for robust network security devices due to the colossal threat posed by cyberattacks to these massive businesses. These businesses are frequently targeted by hackers and others who attempt to access their data and other initiatives. Therefore, they require robust network security against cyber-attacks and end-to-end protection. Continuous cyber-attacks and data security are the primary development factors for network security solutions in large enterprises.

By Industry Vertical

Based on industry vertical, the market is bifurcated into Aerospace & Defence, Government, Banking, Financial Services, And Insurance (BFSI), Information Technology (IT), Telecommunication, Healthcare, Retail, Manufacturing, Energy & Utilities, and Others.

The IT & telecom sector is envisioned to project at a CAGR of 12.8% and amount to the largest market share by 2030. Cyber communication security consists of tools and procedures for detecting, analyzing, and mitigating potential cyber risks in the telecommunications business. Due to sensitive data, telecom sectors are more vulnerable to cyberattacks and security risks than ever. These businesses operate on sensitive infrastructure, most of which keep track of their clients' addresses and financial information. In addition, government agencies frequently order the surveillance of these businesses. Consequently, these phone companies require cyber security solutions to protect their organization and customer data.

The second-largest share is expected to be held by the BFSI by 2030. BFSI encompasses the areas of Banking, Finance, Labor, and Insurance, which include commercial banks, insurance businesses, non-bank financial companies, co-operatives, joint ventures, and retail organizations, among others. In information technology, the increased use of cloud-based systems has increased the risk of data loss. In addition to the adoption of Internet-based security solutions, this characteristic is expected to propel the expansion of the BFSI industry. In addition, rising worries about the security of sensitive data, such as personal banking details, private corporate information, commercial banking details, and personally identifiable information, are anticipated to fuel the network security market's expansion.

Recent Developments

• In 2022, Cisco Systems released its new strategic vision of a unified platform for end-to-end security across hybrid multi-cloud environments. The cloud strategy is named Cisco Security Cloud.
• In 2022, Cisco Systems made their Cisco Cloud Controls Framework (CCF) available to the public.
• In 2022, Cisco Systems plans to launch Cisco Predictive Network to help networks evolve by predicting application issues before they happen.
• In 2022, SolarWinds launched SolarWindsÒ' Hybrid Cloud Observability to accelerate digital transformation.