Application Gateway Market By Component (Hardware, Software), Organization Size (Large Enterprises, Small and Medium-sized Enterprises (SMEs), Industry Verticals (BFSI, IT & Telecom, Manufacturing), & Region for 2024-2031

Application Gateway Market Valuation - 2024-2031

The demand for application gateways has steadily increased in recent years due to a variety of reasons. The rising complexity of modern applications, as well as the volume of network traffic, necessitate the need for enterprises to have a reliable and effective method of managing and securing their application infrastructure. Application gateways offer a centralized point of control for managing traffic flow, load balancing, and security policies, assisting enterprises in improving application performance and availability. The market size surpass USD 2.3 Billion valued in 2024 to reach a valuation of around USD 4.89 Billion by 2031.

The development of cloud computing and the use of hybrid IT infrastructures has created a demand for application delivery solutions that are both flexible and scalable. Application gateways can be installed in a variety of contexts, including on-premises, cloud-based, and hybrid, giving enterprises the flexibility to meet changing requirements. The growing emphasis on cybersecurity and data privacy has fueled demand for application gateways that include advanced security capabilities like intrusion detection, DDoS protection, and web application firewalls. The rising demand for cost-effective and efficient application gateway is enabling the market grow at a CAGR of 9.90% from 2024 to 2031.

Application Gateway Market: Definition/ Overview

An Application Gateway, referred to as an application proxy or application-layer firewall, is a specialized network device or service that manages and secures traffic between users and applications. It acts at the OSI model's application layer (Layer 7), evaluating and filtering traffic based on protocol and data particular to the application. This allows it to enforce security policies, such as access control and threat detection, by evaluating and controlling request and response data. The application gateway often serves as a bridge between client devices and backend servers, providing security against a wide range of cyber threats, including denial-of-service attacks and application-layer vulnerabilities.

Gateways are predicted to develop dramatically as cloud computing, mobile applications, and enterprise IT infrastructures become more complicated. As more enterprises use cloud services and multi-cloud strategies, application gateways will grow to provide more complex traffic management, integration capabilities, and security features. Future enhancements could include advanced AI-powered threat detection, seamless integration with other security solutions, and better support for new protocols and applications. The integration of application gateways with other network security solutions, such as unified threat management (UTM) systems and security information and event management (SIEM) platforms, will improve their ability to secure current IT infrastructures.

How Does the Growth of Cloud Adoption Drive the Application Gateway Market?

The development of cloud adoption will have a substantial impact on the application gateway market. As the number of cloud-based apps and services grows, so does the demand for enhanced application gateways to meet these environments' complex security and administration requirements. According to Gartner, global end-user spending on public cloud services is predicted to increase by 20.7%, reaching $591.8 billion in 2024. This increase in cloud investment underscores the need for robust systems capable of handling high levels of traffic, enforcing security regulations, and ensuring smooth integration across several cloud platforms. Application gateways are vital in this environment, performing essential tasks like traffic management, threat detection, and access control, hence supporting their rising market.

Growing cybersecurity issues will drive the application gateway market. The growing sophistication of cyber-attacks, as shown by the FBI's Internet Crime Report 2023, which showed a 37% increase in reported cybercrime occurrences and financial losses reaching $10.2 billion, is driving up need for resilient application gateway solutions. These gateways play an important role in protecting against complex cyber threats by providing advanced security capabilities such as traffic filtering, threat detection, and access control. As cyber-attacks become more common and damaging, firms prioritize the adoption of application gateways to protect their networks and data, driving market growth.

How will the Rapid Technological Advancements Impact the Growth of the Application Gateway Market?

Rapid technological improvements will have a substantial impact on the growth of the application gateway market. As technologies like artificial intelligence, machine learning, and 5G evolve, application gateways' capabilities expand, allowing them to provide more complex security measures, faster data processing, and better traffic management. These innovations enable application gateways to more effectively respond to emerging risks and manage the rising complexity of modern IT infrastructures. The incorporation of these advanced technologies into application gateways can simplify deployment and operation, making them more accessible and appealing to enterprises, resulting in market growth.

Competition from alternative solutions may pose a hurdle to the application gateway market's growth. As enterprises consider various security options such as next-generation firewalls (NGFWs), cloud-native security solutions, and software-defined networking (SDN), they may choose alternatives that provide identical functionality with greater flexibility or cost savings. This rivalry may limit the adoption of traditional application gateways, hence reducing market growth.

Category-Wise Acumens

Will the Increasing Flexibility and Scalability Propel the Software Segment for the Application Gateway Market?

The software segment continues to dominate the application gateway market. The software segment of the application gateway market will grow due to increased flexibility and scalability. As businesses look for solutions that can easily adapt to changing demands and interact seamlessly with cloud environments, software-based application gateways provide essential agility and scalability. This enables enterprises to efficiently manage and secure traffic across different and developing networks, making software solutions more appealing and driving growth in this market.

Reduced upfront costs and more agility will drive the software component of the application gateway market. Software-based application gateways often have fewer initial costs than hardware alternatives, making them more accessible to companies. Furthermore, their ability to provide greater agility-by swiftly reacting to changing network demands and effectively growing to meet business needs-makes them an appealing alternative, fueling growth in this market.

Will the High-Value Transactions Boost the BFSI Segment for the Application Gateway Market?

The banking and financial services sector is experiencing the fastest growth in the application gateway market. High-value transactions will power the BFSI portion of the application gateway industry. Security is critical in the Banking, Financial Services, and Insurance (BFSI) industry. Application gateways protect high-value transactions from cyber threats by implementing important security mechanisms such as encryption, authentication, and threat detection. The need for solid security solutions in managing substantial financial activities makes application gateways increasingly important, boosting growth in the BFSI segment.

The growing popularity of digital banking and online services will propel the BFSI segment of the application gateway market. As financial institutions increase their digital products and online services, the requirement for secure and dependable application gateways grows in order to safeguard sensitive financial data and transactions. These gateways assist in maintaining robust security measures, managing large traffic volumes, and providing flawless user experiences, resulting in increased demand for application gateways in the BFSI sector.

Country/Region-wise Acumens

Will the IT Infrastructure in the North American Region Expand for the Application Gateway Market?

North America region dominates the application gateway market for numerous years. The IT infrastructure in North America will have a substantial impact on the application gateway market. The International Telecommunication Union's survey shows that 93% of people in North America utilize the internet, the highest rate in the world, highlighting the region's advanced connection. The projected 15% increase in computer and information technology occupations by 2031, resulting in approximately 682,800 new positions, will enhance IT infrastructure. This growth reflects the growing demand for application gateways to regulate and secure the digital ecosystem. North America's strong IT infrastructure and early technology adoption are significant drivers of industry growth.

The cybersecurity focus in North America will have a substantial impact on the application gateway market. The region's increasing frequency and sophistication of cyber threats, as emphasized by the FBI's Internet Crime Complaint Center (IC3) 2023 report, which shows a record USD 10.3 Billion in cybercrime costs-a 49% increase over the previous year-demonstrates the critical need for complex cybersecurity solutions. Cybersecurity Ventures predicts a 15% yearly increase in global cybercrime expenditures, which are estimated to reach USD 10.5 Trillion by 2025, and CISA reports a 62% increase in ransomware outbreaks targeting critical infrastructure, emphasizing the need for robust application gateways. These changes are causing enterprises in North America to invest in comprehensive security measures, resulting in significant growth in the application gateway market.

Will the Rapid Economic Development in the Asian Pacific Region Accelerate the Application Gateway Market?

The Asia-Pacific region is likely to exhibit rapid expansion in the application gateway market. The rapid economic expansion in Asia-Pacific will have a substantial impact on the application gateway market. The Asian Development Bank projects that the region's economies will grow by 4.8% in 2024 and 4.9% in 2025, resulting in increased IT spending and infrastructure investments. The International Data Corporation (IDC) predicts that IT spending will total $1.1 trillion by 2025. Furthermore, the Asia-Pacific Network Information Centre (APNIC) reports that internet penetration will increase from 48.4% in 2019 to 64.1% in 2023, expanding the digital landscape and increasing the demand for effective security solutions such as application gateways. Economic and digital growth drives both present demand and future expansion of the market.

Cybersecurity concerns in Asia-Pacific will drive significant growth in the application gateway market. The increase in cyber risks has compelled enterprises to invest considerably in modern security solutions. According to the Cisco 2023 Asia Pacific Security Capabilities Benchmark Study, 69% of firms in the region experienced cybersecurity events that disrupted operations, highlighting the critical need for increased protection. The Asia Pacific Computer Emergency Response Team (APCERT) estimated a 47% increase in cyber events between 2022 and 2023, which is driving the deployment of advanced solutions such as application gateways. According to a PwC poll from 2023, 63% of regional corporate executives intend to enhance cybersecurity investments, notably in advanced threat detection technologies, which will drive further expansion in the application gateway market.

Competitive Landscape

The application gateway market is a dynamic and competitive space, characterized by a diverse range of players vying for market share. These players are on the run for solidifying their presence through the adoption of strategic plans such as collaborations, mergers, acquisitions, and political support.

The organizations are focusing on innovating their product line to serve the vast population in diverse regions. Some of the prominent players operating in the application gateway market include:

• F5 Networks
• Citrix Systems
• Akamai Technologies
• Nginx, Inc.
• Microsoft Corporation
• Cloudflare, Inc.
• Imperva, Inc.
• Radware Ltd.
• Barracuda Networks, Inc.
• Fortinet, Inc.

Latest Developments

• In July 2024, Microsoft announced the release of Azure Application Gateway for Containers, a new SKU in the application gateway portfolio. This solution combines Application Gateway with the Application Gateway Ingress Controller (AGIC) to provide layer seven load balancing and traffic management for workloads in Kubernetes clusters. It also adds Gateway API support for a more expressive and role-based approach to Kubernetes service networking, as well as the ability to distribute weighted and split traffic for blue-green deployments and multiple routing schemes.
• In December 2023, IBM acquired StreamSets and webMethods from Software AG. StreamSets' data intake capabilities will complement IBM's Watsonx platform, while webMethods will offer enhanced integration and API management features. WebMethods provides B2B integration, automated file transfer, and a modern API gateway for hybrid multi-cloud settings.
• In January 2020, Orange Business Services announced the completion of its acquisition of SecureLink, a European cybersecurity firm. With this acquisition, the corporation intends to broaden its international reach as well as its cybersecurity skills.

Application Gateway Market, By Category

• Component:
• Hardware
• Software
• Services
• Organization Size:
• Large Enterprises
• Small and Medium-sized Enterprises (SMEs)
• Industry Verticals:
• BFSI
• IT & Telecom
• Manufacturing
• Government and public sector
• Retail & E-Commerce
• Healthcare
• Region:
• North America
• Europe
• Asia-Pacific
• South America
• Middle East & Africa