Factors such as the increasing number of cyber threats, rising adoption of the bring-your-own-device (BYOD) policy in workplaces, limitations of traditional firewall, surging implementation of the internet of things (IoT), and rising number of financial institutions across the globe are expected to drive the growth of the next-generation firewall (NGFW) market at a CAGR of 11.9% during the forecast period (2020–2025). With this growth rate, the market size will increase from $2,706.9 million in 2019 to $5,188.8 million by 2025.

One of the prime factors aiding the next-generation firewall market is the increasing number of cyber threats. For instance, about 2.9 million cases of cybercrime were reported in the U.S. in 2018. Hence, the need for cyber-attack prevention in the current business landscape is surging. NGFW is a security solution that can be easily combined with the existing technologies in a company’s network to enhance security and data breach protection and provide complete network visibility. This technology is also effective in preventing intrusion, protecting the cloud, and offering application awareness and control.

Another key factor driving the next-generation firewall market is the limitations of traditional firewall, such as ineffectiveness in meeting the changing internet security requirements and differentiating between different types of web traffic, which is why it either accepts or rejects the overall data traffic. All such limitations are eradicated by the adoption of NGFW, as it offers strong protection with several layers, including application-level inspection and intrusion protection, and improves the efficiency of conventional firewalls. Therefore, the limitations of traditional firewalls are shifting the companies’ focus toward NGFW.

The industry segment of the next-generation firewall market is categorized into banking, financial services, and insurance (BFSI); aerospace defense; government public utility; information technology (IT) telecommunication; retail; healthcare; manufacturing; and others. Among these, the BFSI industry generated the highest market revenue in 2019. This is ascribed to the surging adoption of digital technologies, rising number of financial institutions, and increasing need to prevent cyberattacks. The healthcare industry is projected to observe the highest CAGR during the forecast period, owing to the increasing cases of data breach in the sector.

Moreover, the next-generation firewall market is bifurcated into large enterprises and small and medium enterprises (SMEs), based on enterprise size. Between the two, the large enterprises category accounted for the larger share in the market in 2019, owing to the increasing requirement for enhanced digital security solutions to manage and secure vast amounts of data in big companies. The SMEs category is projected to observe the higher CAGR during the forecast period, due to the increasing focus of such companies on deploying the cost-effective NGFW solutions.

Geographically, the next-generation firewall market in the Asia-Pacific (APAC) region is expected to witness the most-rapid advance during the forecast period. This can be ascribed to the increasing number of SMEs, surging demand for IoT devices, rising number of cyber threats, and growing focus of governments on data security. North America held the largest industry share in 2019, owing to the presence of a large number of market players, rising adoption of cloud solutions, and growing initiatives of governments for the safety of public data.

Thus, the rising number of cyberattacks, surging deployment of IoT devices, and increasing number of financial institutions across the globe are expected to propel the market growth during the forecast period.