Security server appliance sector is booming, says IDC

The adoption of firewalls and virtual private networks (VPNs) is fuelling rapid growth in the security server appliance market.

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By  Greg Wilson Published  April 14, 2003

The security server appliance market is booming. IDC estimates the industry sector generated factory revenues of US$355 million in the forth quarter of 2002 — a 15% sequential growth on the previous quarter.

Firewall and virtual private networks (VPNs) continue to fuel growth in the market, with 90% revenue share in Q4. However, the network intrusion detection ‘sub-market’ out paced overall market growth turning in 19% sequential growth.

“Enterprises increasingly see security appliances as the bedrock of their security posture. The firewall/VPN appliance market continues to grow despite these weak economic times and network intrusion detection appliances are increasing in popularity,” comments Charles Kolodgy, research director for IDC's security products service.

“Looking at the overall security appliance market by price band, much of the growth is occurring with products geared for small business, branch offices, and supporting large data centres. By having so many flavours of security appliances, companies can service many more segments of the market,” he adds.

Cisco managed to retain its leadership position in the total worldwide security server appliance market, taking a substantial 37% revenue share. However, Netscreen posted the strongest sequential growth among the top five vendors, achieving 32% growth from Q3.

“Market shares only tell a miniscule part of the story,” says Chris Christiansen, program vice president for IDC's security products service.

“Vendors are jockeying for key price bands with newly introduced products. Because customers vary radically by price band, success in one area has no bearing on another market. Increasingly, we believe that measuring price band performance is far more important than the overall success of one or another vendor,” he adds.

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