Security Appliance Market Exhibits Steady Growth In 2Q13

According to the International Data Corporation (IDC) Worldwide Quarterly Security Appliance Tracker, factory revenue rose in the second quarter of 2013 (2Q13) compared to the second quarter of 2012, while unit shipments declined over the same period. Worldwide factory revenue was up 6.1 percent year over year to $2.1 billion in the quarter, as shipments decreased -1.5 percent to 483,354 units. Multi-function appliances continue to be a major factor in slower unit growth.

Geographically, Canada again saw the highest year-over-year growth in the quarter (17.6 percent), followed by Asia/Pacific (excluding Japan), which grew at 9.9 percent. The United States was also strong with 8.7 percent year-over-year growth, accounting for nearly 41 percent of worldwide factory revenue. Western Europe slowed in the quarter and saw factory revenue rise only 0.6 percent when compared to 2Q12.

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“Overall, the results in the second quarter show that security spending continues to be a priority for organisations,” said John Grady, Research Manager, Security Products at IDC. “Despite the increasing prevalence of virtual and SaaS-based solutions, appliances remain the predominant delivery method for network security products. Even with performance and functional requirements rising dramatically for many organisations, appliance-based products have continued to meet market demands.”

Cisco continues to lead the overall security appliance market with a 16.2 percent share in factory revenue for the second quarter, but this was flat versus the prior year period. Check Point held the number two spot with a 12.5 percent share for the quarter as revenue increased 4.0 percent compared to the second quarter of 2012. Fortinet surpassed Juniper to become the third largest security appliance vendor, with a 6.2 percent share in the quarter. Similarly, Blue Coat overtook McAfee to round out the top five in 2Q12. The share of “Others” grew again as Palo Alto Networks, Barracuda, Sourcefire, and Sophos continue to see impressive growth each quarter.

Functional Market Results

At the functional market level, the Unified Threat Management (UTM) segment saw the largest year-over-year revenue increase at 32.8 percent and accounted for 38.2 percent of security appliance revenue in 2Q13. Multi-function appliances continue to drive growth in the overall market. The Firewall market declined 22.1 percent year over year, but still represented 20.3 percent of security appliance revenue in the quarter. Intrusion Detection and Prevention (IDP) bounced back in the quarter, with growth of 10.7 percent compared to the prior year period. The Content Security segment rose by 6.8 percent compared to 2Q12 and accounted for 19.6 percent of the market.

“With security treat evolving and cyber attacks escalating, organisations are looking for new approaches that allow them to leverage the potential of technology in a safe manner,” said Ebenezer Obeng-Nyarkoh, Senior Research Analyst, Worldwide Trackers Group. “Consequently, organisations are increasingly emphasising reliable solutions with the integration of intelligence that can quickly solve the problem caused by data breaches.”

IDC’s Worldwide Quarterly Security Appliance Tracker is a quantitative tool for analysing the global security market on a quarterly basis and is available on demand. The Tracker includes quarterly shipments and revenues (both customer and factory), segmented by vendor, family, model, region, operating system, price band, and security functions.