The secure access service edge (SASE) market hit 23% revenue growth in the first quarter of 2024, with Zscaler, Cisco and Palo Alto Networks leading the charge, according to Dell’Oro Group.
The market research report revealed global SASE market, which combines SD-WAN and security service edge (SSE) technologies, has again surpassed the $2 billion mark for the fourth consecutive quarter. Q1 2024 was the 17th consecutive quarter of over 20% growth for the market.
The growth is propelled by more than 20% revenue increases in both the SSE and SD-WAN segments.
“Enterprises worldwide are increasingly leaning toward comprehensive SASE solutions to address the complexities of remote work and cloud integration,” Mauricio Sanchez, senior research director for enterprise networking and security at Dell’Oro Group, said in a statement.
North America continues to lead as the largest revenue contributor, accounting for over half of the global market. However, regions like Europe, the Middle East, and Africa (EMEA) and Asia-Pacific (APAC) have shown faster growth rates, indicating a widening adoption of SASE solutions on a global scale.
Single-vendor SASE dominances the market as Zscaler shifts
One notable trend in the SASE market is the dominance of single-vendor solutions, which represented 80% of the total SASE revenue in Q1 2024, according to the report.
This is attributed to Zscaler’s recent entry into the SD-WAN market and Dell’Oro Group changed its classification from multivendor to a single-vendor SASE solution.
The addition of the SD-WAN solution helped Zscaler keep customers during the current renewal cycle who were being tempted by single-vendor solutions, Sanchez told SDxCentral in response to questions. “So more so a defensive move than offensive.”
“The general trend remains for vendors to expand SAM [serviceable addressable market] by adding either SD-WAN or SSE to become single-vendor SASE vendors,” he said.
In Q1, Zscaler remained the overall leader in the SASE market, extending its market share to become only the second vendor, after Cisco in 3Q 2019, to achieve a 20% or more revenue share.
Top 3 vendors for overall, single-vendor and unified SASE markets
Of the 21 SASE vendors Dell’Oro Group researched for this report, Zscaler, Cisco and Palo Alto Networks are the leading players in the overall SASE market, with Zscaler taking the No.1 spot from Cisco due to the introduction of SD-WAN, according to Sanchez.
These companies are also the top three in the single-vendor SASE market, with Cisco leading the SD-WAN market. “Cisco is swaying the growth in the SD-WAN market because of its forced transition from the ISR 4k access routers to Catalyst 8k SD-WAN appliances. As customers transition, spending on access routing decreases and up on SD-WAN,” he said.
On the other hand, the unified SASE market continues to appeal to the midmarket with its simplified networking and security integration.
Broadcom/VMware took the No. 1 spot in this market. However, Sanchez noted that VMware announced the discontinuation of its unified SASE solution after being acquired by Broadcom, moving customers to the Symantec SSE.
That means those customers will be consuming a single-vendor SASE, but no longer a unified one, he added. “We expect a new unified SASE leader to emerge as VMware continues to transition customers.”
Cato Networks posted 48% revenue growth in the first quarter to take the No. 2 spot in unified SASE, followed by Versa Networks.
SSE revenue growth slows down
SSE revenue grew by 24% year-over-year in Q1 2024, marking its lowest-ever growth rate and the first time it did not rise quarter-over-quarter since Dell’Oro Group’s tracking began in Q1 2019.
Despite this slowdown, key players like Zscaler, Palo Alto Networks, and Netskope saw a combined revenue increase of 38% year over year, reflecting the strong customer demand and the breadth of their solutions, according to the firm’s Market Research Reports on Network Security.
Top SSE vendors — Zscaler, Symantec/Broadcom, Palo Alto Networks, Cisco and Netskope—controlled nearly three-quarters of the market. Notably, Zscaler, Palo Alto Networks, and Netskope gained over five percentage points in cumulative market share, while Symantec/Broadcom and Cisco saw a nearly five percentage point decline.
“In 2023, enterprises began to worry about the macroeconomy, leading to more prudent spending and lengthier decision-making processes,” Sanchez said. “This conservative approach resulted in reduced billings, now manifesting as lower revenue in 2024.”
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