SASE Market Shows Strength with SD-WAN Recovery as 2024 Wraps Up
In a recent report published by the Dell'Oro Group, the SASE (Secure Access Service Edge) market demonstrated remarkable growth in the fourth quarter of 2024, reaching a noteworthy $2.6 billion. This represents a 14% increase year-over-year (Y/Y), showcasing a strong resurgence especially in the SD-WAN (Software-Defined Wide Area Network) segment. The recovery was driven primarily by a rebound following inventory corrections that had plagued companies due to pandemic-induced overbuying.
The report highlights that the growth of SASE coincided with robust sales from Cisco, a significant player in the telecommunications space, indicating a positive shift towards recovery as we head into the year 2025. Mauricio Sanchez, Sr. Director of Enterprise Security and Networking at Dell'Oro, emphasized the enduring demand for integrated security and networking solutions, despite a broader recalibration of the market. He observed that enterprises are moving from rapid expansion strategies towards optimization, consolidating their investments around select, strategic vendors. This realignment signifies a desire for long-term stability and sustained market growth.
The report also provided several key insights on the SASE and SD-WAN landscape as follows:
1. Single-Vendor Solutions: SASE solutions offered by a single vendor experienced exponential growth, soaring by 77% Y/Y, while multi-vendor solutions saw a sharp decline of 56%. Notably, four out of the top ten vendors maintaining at least a 70% split in revenue between SD-WAN and Security Service Edge (SSE) are Broadcom, Cato Networks, Cisco, and Palo Alto Networks. This indicates the challenges vendors face in penetrating both the networking and security aspects of customer spending.
2. SD-WAN Recovery: SD-WAN revenues grew by 17% in the fourth quarter, marking a critical turnaround after several quarters of slow growth. This revitalization in revenues hints at increasing enterprise confidence in their networking strategies as they adjust to post-pandemic realities.
3. SSE Growth: The SSE segment observed a 16% increase in revenue in 2024, showcasing continuous investment by enterprises in cloud security solutions, even while navigating through tough macroeconomic challenges.
4. Branch Networking Spending: Total spending on branch networking, which includes SD-WAN and access routers, rose by 9% in the fourth quarter of 2024, reversing previous quarterly declines and reflecting improved enterprise confidence.
5. Vendor Consolidation: The report further indicates continued consolidation among top vendors, with the leading six companies, including Zscaler, Cisco, and Palo Alto Networks, capturing 71% of the market in 2024, an increase from 64% in 2023. This trend highlights a growing preference among enterprises for fewer, but more trusted vendors.
Overall, the Dell'Oro Group's report illustrates a stabilized yet optimistic outlook for the SASE market as enterprises recalibrate their strategies. The consistent demand for security and networking integration underscores the importance of these solutions as critical components of modern enterprise infrastructure. As companies gear up for the future, the insights from this report may guide them in making more informed, strategic decisions regarding their networking and security investments.
With the continuous evolution of technology and the shifting dynamics of the global market, businesses that embrace these insights will likely position themselves favorably in the competitive landscape ahead. For those interested in a deeper dive into the findings, Dell'Oro Group’s comprehensive report can be requested directly from their team.
The report highlights that the growth of SASE coincided with robust sales from Cisco, a significant player in the telecommunications space, indicating a positive shift towards recovery as we head into the year 2025. Mauricio Sanchez, Sr. Director of Enterprise Security and Networking at Dell'Oro, emphasized the enduring demand for integrated security and networking solutions, despite a broader recalibration of the market. He observed that enterprises are moving from rapid expansion strategies towards optimization, consolidating their investments around select, strategic vendors. This realignment signifies a desire for long-term stability and sustained market growth.
The report also provided several key insights on the SASE and SD-WAN landscape as follows:
1. Single-Vendor Solutions: SASE solutions offered by a single vendor experienced exponential growth, soaring by 77% Y/Y, while multi-vendor solutions saw a sharp decline of 56%. Notably, four out of the top ten vendors maintaining at least a 70% split in revenue between SD-WAN and Security Service Edge (SSE) are Broadcom, Cato Networks, Cisco, and Palo Alto Networks. This indicates the challenges vendors face in penetrating both the networking and security aspects of customer spending.
2. SD-WAN Recovery: SD-WAN revenues grew by 17% in the fourth quarter, marking a critical turnaround after several quarters of slow growth. This revitalization in revenues hints at increasing enterprise confidence in their networking strategies as they adjust to post-pandemic realities.
3. SSE Growth: The SSE segment observed a 16% increase in revenue in 2024, showcasing continuous investment by enterprises in cloud security solutions, even while navigating through tough macroeconomic challenges.
4. Branch Networking Spending: Total spending on branch networking, which includes SD-WAN and access routers, rose by 9% in the fourth quarter of 2024, reversing previous quarterly declines and reflecting improved enterprise confidence.
5. Vendor Consolidation: The report further indicates continued consolidation among top vendors, with the leading six companies, including Zscaler, Cisco, and Palo Alto Networks, capturing 71% of the market in 2024, an increase from 64% in 2023. This trend highlights a growing preference among enterprises for fewer, but more trusted vendors.
Overall, the Dell'Oro Group's report illustrates a stabilized yet optimistic outlook for the SASE market as enterprises recalibrate their strategies. The consistent demand for security and networking integration underscores the importance of these solutions as critical components of modern enterprise infrastructure. As companies gear up for the future, the insights from this report may guide them in making more informed, strategic decisions regarding their networking and security investments.
With the continuous evolution of technology and the shifting dynamics of the global market, businesses that embrace these insights will likely position themselves favorably in the competitive landscape ahead. For those interested in a deeper dive into the findings, Dell'Oro Group’s comprehensive report can be requested directly from their team.
Topics Business Technology）
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