Next-Generation Firewall (NGFW) Market Size, Share, Growth, and Industry Analysis, By Type (Hardware-Based NGFWs, Software-Based NGFWs, Cloud-Based NGFWs; Unified Threat Management and Application Awareness), By Application (Large Enterprises, Small and Medium Enterprises (SMEs); BFSI, IT & Telecom, Government & Defense, Healthcare and Retail & eCommerce), and Regional Forecast to 2034

NEXT-GENERATION FIREWALL (NGFW) MARKET OVERVIEW

The global Next-Generation Firewall (NGFW) market size was USD 6.33 billion in 2025 and is projected to touch USD 14.01 billion by 2034, exhibiting a CAGR of 9.23% during the forecast period.

The Next-Generation Firewalls (NGFWs) are a dramatic improvement upon conventional firewalls with the support of sophisticated security functionality within an integrated solution. Unlike legacy firewalls that are more concerned with basic filtering and NAT, the NGFWs provide deep packet inspection (DPI), intrusion prevention systems (IPS), application control, and encrypted traffic inspection. DPI enables inspection of application-layer packets to derive signatures of malware and attacks, whereas IPS prevents threats on the fly. By decrypting and then re-encrypting SSL/SSH traffic, NGFWs can also unmask latent threats to more effectively guard against emerging threats to network security and safeguard network access and usage within contemporary IT systems.

The application of granular control provided by NGFW enables application, user and behaviour-based network application control, without simply checking ports or IPs. This allows administrators to deny unnecessary or dangerous applications such as social media, but enable essential business operations. When incorporated into LDAP or Active Directory, NGFWs can incorporate user-specific security policies, which are more precise. They also enjoy the benefit of real-time threat intelligence and strong malware protection in the detection and prevention of threats automatically. All this connected, intelligent approach to security reduces the complexity of security tasks as well as enabling regulatory needs and the possibility to protect hybrid or even cloud environments dynamically and proactively against advanced and intelligent threats.

GLOBAL CRISES IMPACTING NEXT-GENERATION FIREWALL (NGFW) MARKETCOVID-19 IMPACT

Pandemic boosted remote security needs making it essential and accelerating the market

The global COVID-19 pandemic has been unprecedented and staggering, with the market experiencing higher-than-anticipated demand across all regions compared to pre-pandemic levels. The sudden market growth reflected by the rise in CAGR is attributable to the market’s growth and demand returning to pre-pandemic levels.

Pandemic-induced changes accelerated the adoption of Next-Generation Firewalls (NGFWs) as organisations rapidly transitioned to remote work and cloud-based operations. As the employees started using home networks to access sensitive data, there was a need to have effective, dynamic and intelligent security tools all-time. NGFWs will be critical in endpoint protection when remote workers connect over an encrypted VPN, and against an increase in phishing, malware and ransomware attacks. They have been able to inspect encrypted communication traffic, apply policies based on users, and offer precise time safeguards against threats, which has contributed to business continuity. Due to this, NGFWs were noted as an important feature of contemporary cybersecurity infrastructure that emerged during the pandemic and expanded its market to a widespread level.

LATEST TRENDS

Adoption of cloud-based solutions to drive the market

Cloud-based NGFWs are growing in popularity due to the increased frequency of focused attention on the scalability, flexibility, and ease of management of cybersecurity by the organisation. These solutions enable the control to be centralised and the policy to be enforced in real-time across geographically distributed networks, which is why they are popular among hybrid and remote work settings. The cloud-based NGFWs integrate seamlessly into the cloud-based environments and provide centralised security protection, tailored to the location or device of the users. They support them to scale dynamically to meet their rising traffic demands, and they are quite economical compared to hardware firewalls in terms of implementation. The cloud-integration intrinsic in these NGFWs that provides an improved threat inference and responsibilities, allows the organisation to mitigate an adaptable security in the current world of evolving digitalisation.

NEXT-GENERATION FIREWALL (NGFW) MARKET SEGMENTATION

BY TYPE

Based on type, the global market can be categorized into Hardware-Based NGFWs, Software-Based NGFWs, Cloud-Based NGFWs; Unified Threat Management and Application Awareness

• Hardware-Based NGFWs: Hardware-based NGFWs are physical equipment located on premises and they provide powerful network security. They provide high processing power for deep packet inspection and can manage heavy traffic volumes. Commonly used at critical points such as data centers, they secure vital infrastructure. Their architecture enables advanced threat detection across multiple protocol layers. They allow in-depth policy control and direct updating, since they are managed directly by in-house teams and thus enable policies to be controlled and updated in real-time.
• Software-Based NGFWs: Software-based NGFWs are firewall solutions deployed on standard servers or virtual environments. They are compatible with the multi-cloud, on-premises or data-centre configurations. Such firewalls provide policy enforcement that is dynamic and responds to any upcoming attacks. Ideal when businesses work on an agile basis, they bring swift expansion capabilities, as well as centralised control. The fact that they are virtual makes them cheaper and faster in deployment and efficiency.
• Cloud-Based NGFWs: Cloud-based NGFWs secure cloud-native environments with centralised control and scalable protection. Unified Threat Management, a single solution has been developed comprising various features such as antivirus and content filtering. Application awareness provides application-level visibility and control through app characteristics rather than ports. These features minimise IT load and maximise streamlining real-time threat identification and response. When combined, they provide modern organisations with streamlined, adaptive and robust network security.

BY APPLICATION

Based on application, the global market can be categorized into Large Enterprises, Small and Medium Enterprises (SMEs); BFSI, IT & Telecom, Government & Defense, Healthcare and Retail & eCommerce

• Large Enterprises: Large enterprises use NGFWs to secure complex networks spanning global sites and data centers. They are utilised to combat advanced cyber threats based on features such as threat intelligence, deep packet inspection and application control. Such priorities include regulatory assurance and protection of sensitive information. They have large budgets, through which they adopt personalised and company-wide security measures. Through centralised management and automation, policy enforcement and swift incident response can be done.
• Small and Medium Enterprises (SMEs): Small and Medium Enterprises (SMEs) use NGFWs to access enterprise-grade security affordably and efficiently. Inherent danger identification, intrusion prevention, and other easy interfaces are a suitable fit for low IT capabilities. NGFWs make SMEs compliance-friendly and safeguard business life cycles. They are designed to be scalable to accommodate business growth and changing business demands. Cybersecurity allows remote work and cloud adoption by means of identity-based controls and application awareness.
• BFSI: BFSI sectors deploy NGFWs to safeguard sensitive financial data and transactions with multilayered protection. Functionalities, such as traffic analysis, session inspection with encryption, and threat intelligence, can address fraud and ransomware. Regulatory controls are backed by robust controls and comprehensive audit trails. NGFWs provide the visibility and control to avert insider threats as well as information leaks. They play a critical role in online banking, mobile applications and the digital financial services that need protection.
• IT & Telecom: IT & telecom companies use NGFWs to offer real-time control and deep visibility over large traffic on the network. Notable characteristics are automated response to threats, cloud support and application-level policy enforcement. Telecom operators use NGFWs to ensure service continuity and combat DDoS attacks. Pairing with threat intelligence systems enhances both speed of response and accuracy. The centralised administration enables flexible policy changes and identical protection in worldwide networks.
• Government & Defense: Government & defense agencies use NGFWs to secure the mission-critical infrastructure and sensitive information against cyber-espionage and nation-state attacks. They are based on deep packet inspection, automated response and multi-factor identity enforcement for control and compliance. NGFWs meet stringent regulatory standards with robust, standards-based security. Multi-layered defence and zero trust support ensure protection across distributed networks. Their flexibility supports the changing requirements of smart cities and their emergency services and defense systems.
• Healthcare: Healthcare organisations use NGFWs to secure patient data, medical equipment and vital systems. They ensure compliance by access control, encrypted traffic inspection and audit logging. Network segmentation isolates sensitive records from general systems to reduce risk. Real-time traffic analysis and malware protection help detect threats early. Consistent security management supports reliable care and trust in digital healthcare platforms.
• Retail & eCommerce: Retail & e-commerce businesses use NGFWs to educate POS systems, online payments and in-store networks. Centralised management helps in fast growth and integration into cloud-based retail tools. Card skimming, ransomware, and supply chain attacks are prevented by real-time threat intelligence. NGFWs guarantee customer privacy and compliance in transaction-intensive environments. Their extensibility enables integrated digital and physical retail security.

MARKET DYNAMICS

Market dynamics include driving and restraining factors, opportunities and challenges stating the market conditions.

DRIVING FACTORS

Rising cybersecurity threats to fueled the market

Rising cybersecurity threats such as malware and ransomware attacks and an Advanced Persistent Threat (APT) make it imperative to provide a more advanced network protection. As attacks get even more complex and evasive, more organisations are turning to highly advanced security solutions that can detect and thwart attacks in real-time. NGFWs support this demand by encompassing deep packet inspection, behaviour analytics and the latest threat intelligence sources, which enable malicious activities to be identified and countered ahead of time. They are also able to scan encrypted traffic and apply policies based on the application, thus enhancing organisational protection. This expanding threat profile has highly contributed to the Next-Generation Firewall (NGFW) market growth, as enterprises in all sectors focus on security spending for protecting digital resources, sustaining operations continuity and compliance with related regulations.

Increasing BYOD adoption to expand the market

Increasing BYOD adoption has created new security issues, with personal smartphones, tablets and laptops being used by employees to access corporate resources. This tendency increases the number of network perimeters requiring old-fashioned security measures to adequately control possible weaknesses and unauthorised intrusion. NGFWs do this by providing a more localised access control that is made possible by identifying users by their identity, device and application and user behaviours. They are capable of implementing very strict policies to enable only valid devices and users to access sensitive services and data. NGFWs decrease the chances of data exposure, virus infections, and unauthorised intrusion with benefits such as SSL examination, identity-based solidification and live surveillance. This ability renders them critical to the BYOD-related mobile-first workplace environment security.

RESTRAINING FACTOR

High implementation costs to hinder the market

High implementation costs remain a significant barrier to the adoption of NGFWs, particularly for small and medium-sized enterprises (SMEs) with limited financial resources. Upfront cost pressure is created by the hardware or licensed software cost, plus the cost of employing skilled personnel to configure and maintain the system may stretch the budgets. Furthermore, regular costs such as subscriptions to receive threat intelligence updates, technical support and advanced options make it more expensive to use threat intelligence. In many smaller organisations, the perceived benefits can be outweighed by the ongoing costs, resulting in underinvestment in the necessary infrastructure to ensure security. Such financial strain may also make SMEs more susceptible to cyber-attacks as they may be using less advanced or dated security systems.

OPPORTUNITY

Integration with Artificial Intelligence (AI) and Machine Learning (ML) to create an opportunity for the market

Integration with Artificial Intelligence (AI) and Machine Learning (ML) is transforming how network security is managed, significantly boosting the capabilities of NGFWs. The technologies support smart processing of huge streams of network traffic in real time, allowing for identifying anomalous trends and behaviours that can be the sign of cyber threats. The benefits of AI and ML projects are that they will always be learning with all the new methods that attacks are types, so the NGFWs are able to predict effects and prevent them prior to any damage. It is a proactive defence system that lowers the dependency on manual intervention and speeds up the response. With the increasing complexity of cyberattacks, AI-enhanced NGFWs can provide dynamic defence that adapts to emerging threats, and thus, they become an essential tool and organisations should have to remain a step ahead of any possible intrusion.

CHALLENGE

Complexity of integration is a major challenge for the market

Complexity of integration has been cited as a significant challenge in the implementation of NGFWs, particularly in environments that rely on older network infrastructures. Compatibility with older systems, making configurations align, and not causing distractions during installation, requires extensive time, skills, and resources. Lack of proper integration may result in network bottlenecks, inappropriate configuration of policies or lack of security coverage. Firms that lack specific IT departments can find the experience too extreme and risk making mistakes during the implementation or when trying to use all of its functionalities. The learning experience and 'high skill level required' can also be slowing down the rollouts, making the solution less effective at the time of deployment. Such complexity discourages most businesses and would reduce the adoption of NGFWs despite the identifiable security they offer.

NEXT-GENERATION FIREWALL (NGFW) MARKET REGIONAL INSIGHTS

• NORTH AMERICA

The North America region dominates the global Next-Generation Firewall (NGFW) market share, due to a high level of maturity in the digital infrastructure, coupled with early adoption of the advanced cybersecurity technology contributed majorly to its domination. The United States Next-Generation Firewall (NGFW) market, specifically, is ahead of the region, as the demands of major industries such as BFSI, healthcare and government to obtain high levels of data protection and regulatory compliance are great. Other large players, such as Palo Alto Networks, Cisco and Fortinet, contribute in making the market a stronger. Stringent regulatory standards such as HIPAA and NIST require organisations to use powerful NGFWs. The ongoing digitalisation process and smart city projects keep driving the adoption of NGFWs into critical infrastructure and enterprise networks.

• EUROPE

Europe possesses a high market position in the global NGFW market, with stringent data protection laws such as GDPR and the NIS2 Directive. Germany, the U.K., and France are among the countries that have embraced it due to the rising cases of cyberattacks against critical infrastructure and industries. Digital transformation, the proliferation of cloud computing, and IoT devices nonstop increase the attack surface, which further drives the demand in the NGFW marketplace. The increase in the level of cybersecurity awareness, coupled with legislation enforcement support systems, persists to feed investments in highly advanced, AI-based firewall solutions that will provide better data privacy and operational resilience.

• ASIA

The Asia Pacific region is the NGFW market's fastest-growing region and this is due to fast digitalisation rates, the large use of IoT, and increased cybersecurity awareness. Demands have mostly been dominated by countries such as China, India, Japan and South Korea because they have been involved in carrying out a mass adoption of digital technology coupled with the modernisation of businesses. Governments, such as Cyber Surakshit Bharat in India and sovereign cloud requirements, promote expansion of the market. The momentous economic growth and increased investments in managed security services and IT infrastructure further drive the use of NGFW in various industries and companies.

KEY INDUSTRY PLAYERS

Key industry players are heavily investing in research and development to enhance market expansion

Key industry players are heavily investing in research and development to effectively develop their products to provide increased capacity and capabilities of their NGFW offering, therefore, bringing product innovation to the cybersecurity arena. Such companies are combining the newest technologies, including artificial intelligence (AI) and machine learning (ML), to allow real-time identification of threats, predictive analytics and automatic response abilities. Cloud-native architectures are also emerging, in which it is possible to deploy systems that are scalable and flexible to deploy and are aligned with modern IT environments. Moreover, vendors are engaged in making management interfaces easier to deal with, and attempt to ensure that to reduce operational complexity. This innovation-led strategy will keep NGFWs relevant in dealing with emerging threats and address the pressure of the hybrid networks, teleworking populations, and compliance-based industries.

LIST OF TOP NEXT-GENERATION FIREWALL (NGFW) COMPANIES

• Cisco Systems Inc. (U.S.)
• Palo Alto Networks Inc. (U.S.)
• Fortinet Inc. (U.S.)
• Check Point Software Technologies Ltd. (Israel)
• Juniper Networks Inc. (U.S.)
• Barracuda Networks Inc. (U.S.)
• SonicWall (U.S.)
• Zscaler Inc. (U.S.)
• Forcepoint LLC (U.S.)
• Sophos Ltd. (U.K.)

KEY INDUSTRY DEVELOPMENT

April 2025: Versa Next-Generation Firewall (NGFW) received a 'Recommended' rating and a score of 99.90% in terms of security effectiveness in the report by cyberRatings.org on Q1. Versa NGFW was the fastest (2,000 Mbps throughput), highest capacity (HTTPS 1,585 Mbps), and cheapest (USD 1.27 per Mbps) in 10 leading vendor NGFWs, obtained the fastest and highest HTTPS, and the cheapest NGFW, in actual performance in real-world networks.

REPORT COVERAGE

The study encompasses a comprehensive SWOT analysis and provides insights into future developments within the market. It examines various factors that contribute to the growth of the market, exploring a wide range of market categories and potential applications that may impact its trajectory in the coming years. The analysis takes into account both current trends and historical turning points, providing a holistic understanding of the market's components and identifying potential areas for growth.

Next-Generation Firewall (NGFW) market is witnessing rapid evolution driven by continuous investments in research and development by key industry players. Vendors are integrating advanced technologies such as artificial intelligence (AI) and machine learning (ML) to deliver real-time threat detection, predictive analytics, and automated responses. These innovations significantly enhance NGFW performance and responsiveness against sophisticated cyber threats. Additionally, the adoption of cloud-native architectures enables scalable, flexible deployments suited for hybrid IT environments. Simplified management interfaces are also being introduced to reduce operational complexity, making security more accessible and efficient. These innovation-driven developments position NGFWs as essential tools for protecting modern, dynamic network infrastructures.