An $11 billion revenue opportunity for 5G network security solutions and services by 2026, Security

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New York: As 5G network deployment accelerates worldwide, the network security market is rapidly materializing. Global technology intelligence firm ABI Research predicts a total revenue opportunity of $11.6 billion by 2026. Initially delivered through hardware sales to telecom operators, the software and services opportunity is expected to grow significantly in the latter part of the forecast period.

Initially, capital expenditures on network security appliances generate hardware opportunities as new infrastructure is being built by communication service providers. “Communication Service Providers (CSPs) purchase the required solutions primarily from network equipment vendors and pure-play cybersecurity vendors. Over time, other specialized third parties will enter the market as cloud service providers transition to standalone 5G,” says Michela Menting, Director of Digital Security Research at ABI Research.

Over time, as CSPs begin to offer enterprise applications, these initial security investments will likely be transformed into enterprise security service offerings; an important pivot and a great new opportunity for CSPs to recoup security expenses and create new value in network services.

This pivot to a security provider will not be easy for CSPs. They will need to adapt and adjust their security posture accordingly for various business use cases and verticals, and much of this will require implementing new processes and extensive in-house security training. “For the most part, CSPs will likely obtain the required technology and skills either through acquisitions or by partnering with security-focused companies. As such, partnerships will be key for CSPs to seize the security software and services opportunity,” Menting says.

For network equipment vendors (NEPs) and other third parties, such as hyperscalers and pure-play cybersecurity vendors, there is a dynamic demand today for network security solutions to build the 5G infrastructure alongside the telecom operators. In close symbiosis with the telecommunications industry, the role of the NEPs, which position themselves as the ideal partner for this pivot, firstly because they provide the basic elements of the underlying infrastructure, but also because have a long-standing relationship with CSPs. NEPs are also likely to have a significant opportunity to directly target the corporate market; their experience with CSPs and carrier-grade offerings will be attractive from a trust perspective for enterprises.

Nevertheless, CSPs and NEPs are not the innovators or leaders in virtualization and cloud environments, and security in these contexts is at best as complex. This is to the advantage of hyperscalers and pure-play cybersecurity vendors. Hyperscalers present the biggest threats to NEPs, and not just in security software and services; they live and breathe the cloud that is at the heart of standalone 5G. “Their only limitation is their lack of traditional experience with CSPs, so they’ll have to prove they can deliver carrier-grade security. But they’re nimble, they’re competitive, and they’re very keen to commit to this The opportunity is there, and market competitors are already jostling for space,” concludes Menting.

These findings are taken from ABI Research’s 5G Network Security Market Data Report. This report is part of the company’s Digital Security Research service, which includes research, data and ABI Insights. Market data spreadsheets are comprised of in-depth data, market share analysis and highly segmented and service-specific forecasts to provide detailed opportunity insights.

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