Network security devices handle millions of packets per second. For enterprise data centers, throughput and low latency are critical, so these devices are equipped with specialized chips to handle the load, and the cost of a single device can be hundreds of thousands of dollars. All corporate traffic is consolidated from around the world and filtered through these devices.
When the Internet replaces the corporate network, the cloud is replacing the enterprise data center. To keep up with the pace of this new world, security vendors have given up on hardware accelerations that they have invested heavily, virtualizing their software to deploy on virtual machines in the cloud, which are single-tenant solutions. Each customer deploys their own copy of the application, but they still need to update each instance and maintain complex security policies based on the IP address.
The impact of moving to the cloud to the security equipment business is only the beginning, and the 25-year-old industry is entering a turbulent development phase.