Next-generation Firewall Market Report Scope & Overview:

Next-generation Firewall Market was valued at USD 5.22 billion in 2023 and is expected to reach USD 12.87 billion by 2032, growing at a CAGR of 10.59% from 2024-2032 

This report includes an in-depth analysis of several key factors driving market growth. Integration with other security tools enhances comprehensive protection, while the cost of deployment remains a significant consideration for businesses. Additionally, NGFWs improve operational efficiency through advanced features, reducing the need for multiple security solutions. The increasing use of Machine Learning and AI in NGFWs helps automate threat detection, strengthening security capabilities. Furthermore, these firewalls play a crucial role in reducing incident response time, ensuring swift action in case of a security breach. The NGFW market is expanding rapidly, fueled by the growing demand for robust network security.

U.S. Next-generation Firewall Market was valued at USD 1.28 billion in 2023 and is expected to reach USD 3.16 billion by 2032, growing at a CAGR of 10.52% from 2024-2032 

The growth of the U.S. Next-Generation Firewall (NGFW) Market can be attributed to the increasing need for robust network security solutions amid rising cyber threats and sophisticated attacks. As businesses expand their digital footprints, the demand for NGFWs has surged to safeguard sensitive data and ensure compliance with regulations. The integration of Machine Learning and AI technologies in NGFWs enhances threat detection and response, improving overall security. Furthermore, the rising adoption of cloud-based infrastructure and remote work models has heightened the necessity for advanced firewalls that can provide proactive, multi-layered protection, driving market growth.

Next-generation Firewall Market Dynamics

Drivers

• Increasing Network Complexity Drives the Need for Advanced Next-Generation Firewalls with Enhanced Security and Traffic Management Capabilities.

As companies increase their network infrastructures and adopt new technologies, network traffic has become much more complex. Conventional firewalls cannot handle the increasing amount and types of network traffic, hence security systems remain exposed to vulnerabilities. Next-generation firewalls (NGFWs) provide enhanced functionality such as deep packet inspection, application awareness, and the capability to detect and block advanced threats that traditional firewalls cannot detect. Their capacity to inspect traffic on a per-packet basis, including encrypted traffic, enables more precise threat detection and more effective security control. This makes it possible for companies to have secure networks in the face of the greater complexity of data flows, making NGFWs crucial to the modern cybersecurity strategy.

Restraints

• Complex Configuration and Management of Next-Generation Firewalls Pose Challenges for Organizations Lacking Dedicated Cybersecurity Expertise.

Next-generation firewalls (NGFWs) provide enhanced network security features, but their setup and management require extensive expertise. For most organizations, particularly those that do not have specialized cybersecurity teams, the technical complexity of configuring and managing NGFWs can be a major issue. The firewalls need specialized expertise in traffic analysis, threat detection, and integration with other security devices. Lacking proper resources, organizations might not be able to maximize the potential of NGFWs effectively, which results in underperformance or misconfigurations that expose networks to risks. In addition, ongoing management and adjustments of these systems need constant care and expertise, which adds a further hurdle for small enterprises or those with limited in-house technical skills.

Opportunities

• Integration of AI and Machine Learning in Next-Generation Firewalls Enhances Real-Time Threat Detection and Automated Response Capabilities.

The integration of artificial intelligence (AI) and machine learning (ML) in next-generation firewalls (NGFWs) can enhance their performance dramatically by facilitating real-time threat detection and automated action. AI and ML algorithms can process large amounts of network data, detect unusual patterns, and forecast potential security threats, enabling NGFWs to react more effectively to evolving risks. This integration improves the firewall's capability to recognize zero-day attacks, advanced persistent threats, and other complex cyber attacks that other firewalls can't. Moreover, AI-based NGFWs have the potential to learn from previous events and improve their defense strategies further. These features make it possible for businesses to provide improved security with decreased manual effort involved in monitoring and response, thus enhancing NGFWs for a broader category of organizations.

Challenges

• High Initial and Ongoing Costs of Next-Generation Firewalls Pose Challenges for Small and Medium-Sized Businesses.

Next-generation firewalls (NGFWs) demand a large upfront cost to deploy, with the acquisition of hardware, software, and licensing costs. Also, companies have to plan for recurring maintenance, updates, and support, adding to the cost of ownership. These costs prove to be a hindrance to small and medium-sized enterprises (SMBs) with minimal budgets, which might find it difficult to sanction the exorbitant initial and ongoing expenses that come with NGFWs. The cost of ongoing updates required to maintain the firewall defenses abreast of impending threats can similarly prove to be a financial disincentive for SMBs, deterring them from implementing such sophisticated security systems. Consequently, the cost aspect is a significant factor that restricts the extensive use of NGFWs in less resourceful organizations.

Next-generation Firewall Market Segment Analysis

By Component

the Next-generation Firewall (NGFW) market with a highest revenue share of approximately 66% in 2023. This is attributed mainly to the increasing requirement for sophisticated security functionalities such as deep packet inspection, intrusion prevention, and application awareness. Organizations are now opting for NGFW solutions to shield their networks against emerging cyber threats to provide overall security across network infrastructure. The integration of these solutions with other security tools and the ability they offer to provide proactive defense mechanism also make them market leaders.

The Services segment is projected to grow at the fastest CAGR of approximately 11.96% during the analysis period of 2024-2032. This growth can be linked to the rising need for installation, support, and maintenance services to make NGFW systems operate effectively. As more and more businesses adopt NGFW solutions, the demand for professional services to manage and optimize their deployment will increase. Further, as the complexity of threats increases, they need ongoing updates and professional handling, leading to increased demand for these services.

By Enterprise Size

The Large Size Enterprises segment led the Next-generation Firewall (NGFW) market with the largest revenue share of around 69% in 2023. It is because of the large-scale network infrastructures and intricate security requirements of big enterprises. They need sophisticated security solutions to shield confidential information, maintain regulatory requirements, and provide protection against intelligent cyberattacks. The high financial investment capability and requirement for adaptable, integrated security systems are driving the segment into the leading position in the market.

The Small and Medium-Sized Enterprises (SMEs) segment is projected to grow at the fastest CAGR of roughly 12.18% from 2024-2032. Since SMEs also grow increasingly aware of the need for strong cybersecurity, they are implementing NGFW solutions in order to safeguard their online assets. The reduced prices of NGFW solutions and the increased provision of less expensive yet scalable options that fit the smaller organizations are also fueling their growth. Moreover, the increasing number of cyber attacks on SMEs further speeds up their embracement of cutting-edge security solutions.

By Product Type

The Hardware segment led the Next-generation Firewall (NGFW) market with the largest revenue share of approximately 41% in 2023. This is because of the paramount requirement for specialized, high-performance physical appliances to handle high-volume network traffic, provide low latency, and ensure high availability. Large organizations and data centers favor hardware-based NGFW solutions due to their reliability, scalability, and capacity to perform intricate security functions. Moreover, the increasing demand for on-premise, high-security infrastructure has helped the hardware segment maintain a strong market position.

The Cloud segment is anticipated to expand at the fastest CAGR of approximately 12.46% during 2024-2032. This rapid growth is a result of the rising migration of companies to cloud computing environments that need scalable, flexible, and affordable security solutions. Easy deployment, smooth integration, and remote access control of cloud-based NGFWs make them perfectly suited for organizations leveraging cloud services. The ability to expand as required and manage multiple locations without the costs of more hardware contributes toward the demand for cloud-based firewalls.

By Industry Vertical

The BFSI (Banking, Financial Services, and Insurance) sector led the Next-generation Firewall (NGFW) market with the largest revenue share of approximately 23% in 2023 and is likely to expand at the highest CAGR of around 12.71% from 2024-2032. This dominance is fueled by the growing demand for sophisticated cybersecurity technologies to secure sensitive financial information, meet strict regulatory requirements, and defend against a broadening spectrum of cyber threats like fraud, hacking, and data breach. With financial institutions going digital for their services, such as mobile banking and online transactions, the call for NGFWs to offer secure access, real-time inspection, and threat blocking keeps mounting. Moreover, regulatory pressures further stimulate the adoption of NGFWs in the BFSI sector.

Regional Analysis

North America dominated the Next-generation Firewall (NGFW) market with the highest revenue share of about 34% in 2023. This dominance is primarily due to the region's early adoption of advanced cybersecurity technologies and the high demand for robust security solutions in industries such as finance, healthcare, and technology. The presence of major NGFW vendors, along with increasing cyber threats, has driven substantial investment in NGFW solutions, securing North America's leading position in the market.

Asia Pacific is expected to grow at the fastest CAGR of about 12.67% from 2024-2032. This growth is driven by the rapid digital transformation, increased internet penetration, and rising cyber threats in the region. As businesses in countries like China, India, and Japan expand their digital infrastructures, there is a growing need for advanced network security solutions like NGFWs. Additionally, the increasing adoption of cloud and IoT technologies in the region fuels this growth.

Key Players

• Cisco Systems Inc. [Cisco Firepower, Cisco Meraki MX]

• Barracuda Networks, Inc. [Barracuda CloudGen Firewall, Barracuda NextGen Firewall]

• Check Point Solution Technologies Ltd. [Check Point Quantum, Check Point ThreatCloud]

• Juniper Networks Inc. [SRX Series, Junos Space Security Director]

• Huawei Technologies Co., Ltd. [Huawei USG9500, Huawei Next-Gen Firewall]

• Palo Alto Networks. [Palo Alto PA Series, Palo Alto VM-Series]

• Fortinet, Inc. [FortiGate, FortiSandbox]

• Forcepoint LLC. [Forcepoint NGFW, Forcepoint Web Security]

• Sophos Ltd. [Sophos XG Firewall, Sophos XG Firewall Home Edition]

• Zscaler Inc. [Zscaler Internet Access, Zscaler Private Access]

• WatchGuard Technologies, Inc. [WatchGuard Firebox, WatchGuard Dimension]

• SonicWall [SonicWall TZ Series, SonicWall NSa Series]

Recent Developments:

• In March 2025, Forcepoint announced its acquisition of Getvisibility, an AI-driven data security company, to enhance its Data Security Everywhere platform, improving risk visibility, mitigation, and compliance for enterprise and government customers.

• In 2024, Palo Alto Networks introduced new innovations in ATP (Advanced Threat Protection) and Next-Generation Firewalls (NGFW), enhancing protection with advanced machine learning, threat intelligence, and cloud-native security solutions.