The Total Economic Impact™ Of Palo Alto Networks Software Firewalls

Cost Savings And Business Benefits Enabled By Palo Alto Networks Software Firewalls

A Forrester Total Economic ImpactTM Study Commissioned By Palo Alto Networks, October 2023

It is paramount for organizations to maintain adequate security postures in cloud and virtualized environments and to do so without wasting time and effort on troubleshooting when they could be improving security. Right now, organizations struggle with both: They juggle legacy physical firewalls that require more time and effort for worse security visibility and overall posture. Moving to a centralized software platform with powerful capabilities and centralized management is one way to square the circle.

As the name suggests, Palo Alto Networks Software Firewalls are firewalls in software form rather than physical. These firewalls can be deployed for cloud platforms like AWS or Azure and virtual machines or containers, and they are governed by Panorama, Palo Alto Networks’ centralized firewall management platform that provides unified rulemaking and visibility.

Palo Alto Networks commissioned Forrester Consulting to conduct a Total Economic Impact™ (TEI) study and examine the potential return on investment (ROI) enterprises may realize by deploying Palo Alto Networks Software Firewalls. 1  The purpose of this study is to provide readers with a framework to evaluate the potential financial impact of Software Firewalls on their organizations.

To better understand the benefits, costs, and risks associated with this investment, Forrester interviewed six representatives of five organizations and surveyed 158 additional respondents with experience using Palo Alto Networks Software Firewalls. For the purposes of this study, Forrester aggregated the experiences of the interviewees and survey respondents and combined the results into a single composite organization.

The interviewees noted that prior to using Software Firewalls, their organizations had myriad physical firewalls deployed in their legacy environments for east-west security. In many instances, these firewalls were siloed, unreliable, and required excessive labor to manage and update. This left the organizations short on labor and still without adequate risk management.

After the investment in Software Firewalls, the organizations were able to replace their legacy firewalls quickly and spend less effort maintaining them. Improved, centralized governance and additional capabilities enabled them to reduce their reliance on other security tools while significantly improving reliability and security.

The financial analysis which is based on the interviews and survey found that a composite organization experiences benefits of $5.98 million over three years versus costs of $2.28 million, adding up to a net present value (NPV) of $3.70 million and an ROI of 163%. There is no initial investment, so there is no payback period calculated for this study.

Key Findings

Quantified benefits. Three-year, risk-adjusted present value (PV) quantified benefits for the composite organization include:

  • 25% savings in firewall deployment and 35% savings in time dedicated to firewall security and network management. The composite organization requires significantly less effort to deploy Software Firewalls than it did for its legacy firewalls, and Palo Alto Networks Software Firewalls also require less active effort to manage. With Software Firewalls, the composite organization saves more than 12,000 hours of effort per year on deployment and management, resulting in a three-year, risk-adjusted present value (PV) of $1.8 million.
  • 50% reduction in time required to attain security posture. In addition to having teams for basic deployment and maintenance, the composite organization requires security and network operations teams to adjust and fine-tune security devices to ensure they meet security standards. With Software Firewalls, the composite organization reduces the amount of time spent on these tasks by 50%, which contributes to three-year, risk-adjusted savings of more than $145,300.
  • Automatic filtration of security incidents and a 50% reduction in remediation labor. The centralized visibility and governance of Palo Alto Networks Software Firewalls enable the composite organization to completely avoid remediation effort for certain events via automatic filtration, and it reduces the remediation time for other incidents flagged by the firewalls by 50%. This leads to a three-year, risk-adjusted PV of nearly $238,800 for the composite organization.
  • 67% reduction in end-user downtime and a 50% reduction in overall downtime length. The virtual nature of Palo Alto Networks Software Firewalls and centralized governance of all types of firewalls via Panorama makes it significantly less likely that the composite will see outages for reasons like hardware failure or making updates. The firewalls also improve the composite’s visibility, which significantly reduces the time required for updating or bringing firewalls back online. This contributes to a risk-adjusted, three-year PV of nearly $682,900 for the composite organization.
  • More than $700,000 in avoided hardware spend per year. Palo Alto Networks Software Firewalls don't just replace the composite organization's existing physical firewalls, they also provide additional capabilities that allow it to replace devices. These include Domain Name System (DNS) security, advanced threat protection, and more. Paired with avoiding the overprovisioning of physical firewalls, the composite organization saves a risk-adjusted total of nearly $1.6 million over three years.
  • Reduced risk and impact of a security breach. The composite organization reduces the likelihood of a security breach by 15% with easier management and consistent rules, visibility, and governance provided by Palo Alto Networks Software Firewalls. This also reduces the amount of internal productivity impacted by each incident. With Software Firewalls, the composite organization saves a three-year, risk-adjusted total of $1.6 million.

Unquantified benefits. Benefits that provide value for the composite organization but are not quantified for this study include:

  • Faster, more secure migrations. Organizations can move faster and with more confidence during cloud and digital migrations because they know they have consistent security solutions.
  • Additional capabilities and compatibility with other Palo Alto Networks solutions. Organizations can expect to see additional capabilities and functionality from their Palo Alto Networks Software Firewalls, especially when working with other Palo Alto Networks solutions.

Costs. Three-year, risk-adjusted PV costs for the composite organization include:

  • Annual usage fees for Palo Alto Networks Software Firewalls. The composite organization pays an annual fee for each of its firewalls based on the type of firewall and usage that totals a three-year, risk-adjusted cost of $1.2 million.
  • $40,000 in total deployment costs. Each of the composite's Palo Alto Networks Software Firewall deployments takes an average of 3.75 hours. Over three years, this costs the composite a risk-adjusted total of $40,000.
  • $396,000 in annual ongoing management costs. The composite uses a team of 20 FTEs to manage its Software Firewalls, and the team spends 20% of its time on this task. This leads to a risk-adjusted total cost of $986,000 over three years.

Key Statistics

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    Return on investment (ROI):

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    Benefits PV:

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    Net present value (NPV):


Benefits (Three-Year)

Firewall deployment and maintenance savings Security-posture attainment savings Improved security and IT operations remediation efficiency Reduced end-user downtime due to improved reliability Security infrastructure cost reduction and avoidance Data breach reduction savings

TEI Framework And Methodology

From the information provided in the interviews and survey, Forrester constructed a Total Economic Impact™ framework for those organizations considering an investment in Palo Alto Network Software Firewalls.

The objective of the framework is to identify the cost, benefit, flexibility, and risk factors that affect the investment decision. Forrester took a multistep approach to evaluate the impact that Palo Alto Networks Software Firewalls can have on an organization.

Forrester Consulting conducted an online survey of 158 cybersecurity leaders at global enterprises in the US, the UK, Canada, Germany, and Australia. Survey participants included managers, directors, VPs, and C-level executives who are responsible for cybersecurity decision-making, operations, and reporting. Questions provided to the participants sought to evaluate leaders' cybersecurity strategies and any breaches that have occurred within their organizations. Respondents opted into the survey via a third-party research panel, which fielded the survey on behalf of Forrester in August 2023.

  1. Due Diligence

    Interviewed Palo Alto Networks stakeholders and Forrester analysts to gather data relative to Palo Alto Networks Software Firewalls.

  2. Interviews

    Interviewed six representatives of five organizations and surveyed 158 respondents at organizations using Palo Alto Networks Software Firewalls to obtain data with respect to costs, benefits, and risks.

  3. Composite Organization

    Designed a composite organization based on characteristics of the interviewees’ organizations.

  4. Financial Model Framework

    Constructed a financial model representative of the interviews using the TEI methodology and risk-adjusted the financial model based on issues and concerns of the interviewees.

  5. Case Study

    Employed four fundamental elements of TEI in modeling the investment impact: benefits, costs, flexibility, and risks. Given the increasing sophistication of ROI analyses related to IT investments, Forrester’s TEI methodology provides a complete picture of the total economic impact of purchase decisions. Please see Appendix A for additional information on the TEI methodology.


Readers should be aware of the following:

This study is commissioned by Palo Alto Networks and delivered by Forrester Consulting. It is not meant to be used as a competitive analysis.

Forrester makes no assumptions as to the potential ROI that other organizations will receive. Forrester strongly advises that readers use their own estimates within the framework provided in the study to determine the appropriateness of an investment in Software Firewalls.

Palo Alto Networks reviewed and provided feedback to Forrester, but Forrester maintains editorial control over the study and its findings and does not accept changes to the study that contradict Forrester’s findings or obscure the meaning of the study.

Palo Alto Networks provided the customer names for the interviews but did not participate in the interviews.

Forrester fielded the double-blind survey using a third-party survey partner.

Consulting Team:

Sam Sexton

Matt Dunham

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