In its latest Network Security report, Dell’Oro claims the global market hit $6.2 billion in the first quarter of 2025, a 12 per cent leap compared to the same period last year. Leading the charge was the Application Security & Delivery (AS&D) segment, which ballooned by 21 per cent as companies scrambled to harden their front ends and APIs against increasingly nasty AI-driven attacks.

The AS&D category includes Web Application Firewalls and Application Delivery Controllers, both of which are leaning more heavily on SaaS and virtual deployments, apparently because physical appliances now look about as nimble as a steam train.

Dell’Oro senior director of enterprise security and networking Mauricio Sanchez said: “The remarkable rise of SaaS and virtual network security solutions has fundamentally reshaped enterprise cybersecurity strategies, creating a dynamic where hardware now trails cloud-based innovation.”

He added that physical gear like firewalls and ADCs might claw back a bit of ground once channel stock normalises and postponed refreshes come due.

Dell’Oro reckons the overall Network Security market will surpass $26 billion in 2025, driven by zero-trust projects, more AI workloads and ongoing cloud sprawl.

Virtual ADC revenue jumped 49 per cent year over year, with SaaS WAF ticking up 21 per cent. Firewall sales bounced back too, climbing 8 per cent overall, split between a 5 per cent uptick in hardware and a hefty 27 per cent surge in virtual units.

Security Service Edge revenue rose 15 per cent while Secure Web Gateway appliances slumped five per cent, making it clear that customers are ditching the old boxes for cloud-native SSE platforms.

Virtual and SaaS solutions accounted for a whopping 78 per cent of new spending in the quarter, showing just how much the old-school appliance makers are getting left behind.