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Steady Growth in Security Appliance Market Continues: IDC

According to IDC, both factory revenue and unit shipment growth for security appliances rose in Q4 2012 compared to the previous quarter.

According to IDC, both factory revenue and unit shipment growth for security appliances rose in Q4 2012 compared to the previous quarter.

IDC’s Worldwide Quarterly Security Appliance Tracker showed that worldwide factory revenue was up 7.2% year on year to $2.3 billion, as unit shipments increased 5.2% to 538,428. In the previous quarter, factory revenue growth was 6.3% and unit growth was 1.3% compared to Q3 2011.

“Geographically, Asia/Pacific (excluding Japan)(APeJ) with a revenue share of 19.3% continued to see the highest growth at 18.0% year over year. Western Europe growth picked up in the final quarter of 2012, with factory revenue rising 3.9% versus Q4 2011,” IDC said.

Additionally, IDC found that Japan had the highest unit growth year over year at 25.1%, followed closely by APeJ at 17.4%.

Interestingly, the United States market experienced 4.1% revenue growth, but had a unit decrease of 1.1% compared to Q4 2011, something IDC says points to some softness in lower price bands and that revenue growth was driven by larger enterprises and service providers.

“Typical fourth quarter seasonality seemed to help the market a bit, with overall growth picking up thanks to end of year initiatives on the vendor side and budget flush on the buyer side,” said John Grady, research manager, Security Products at IDC. “Organizations continue to prioritize security within their overall IT budget. With advanced, targeted threats a growing concern, IDC expects continued high single-digit growth in the security appliance segment.”

Cisco, while it continues to lead the overall security appliance market, saw its market share fall from 17.7% in the prior year period to 15.5% share in factory revenue for the fourth quarter.

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Check Point held the number two spot with a 12.7% share for the quarter as revenue increased 7.8% compared to the fourth quarter of 2011.

Fortinet saw the largest revenue growth among the top five vendors at 27.2%, IDC Said.

Overall, the combined market share of the top 5 global vendors represented 46.3% of the market in Q4 2012 losing 2.6 points compared to a year ago. The share of other vendors increased mainly due to strong quarters from Blue Coat, Palo Alto Networks, Barracuda, Sourcefire, and Dell SonicWALL.

Top 5 Vendors, Worldwide Security Appliance Revenue, Q4 2012 (Revenues in $ Millions)

 Worldwide Security Appliance Revenue, Fourth Quarter of 201

The Unified Threat Management (UTM) segment saw the largest year-over-year revenue growth at 34.3% and accounted for 35.0% of security appliance revenue in Q4 2012, IDC said.

The Firewall/VPN market represented 24.0% of security appliance revenue despite a year-over-year decline of 2.8% after ten consecutive quarters of steady growth. The IPS segment declined by 3.6% compared to the prior year as these dedicated products continue to fight for share in the mid-market with UTM appliances.

“While businesses continue to explore the opportunities for migrating to a private cloud network as a new technology paradigm, unified security prospects will continue to expand rapidly into small and medium-size businesses where demand is greater than ever,” said Ebenezer Obeng-Nyarkoh, senior research analyst, Worldwide Trackers Group.

IDC’s Worldwide Quarterly Security Appliance Tracker analyzes the global security market on a quarterly basis and includes quarterly shipments and revenues, segmented by vendor, family, model, region, operating system, price band, and security functions.

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