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Ukraine crisis stifles EMEA security appliance market

IDC records year-on-year decline of 1.4% in first quarter of 2014

Ukraine crisis stifles EMEA security appliance market
IDC said that the decline was driven mainly by turbulence in Russia, triggered by the situation in Crimea and eastern Ukraine

The EMEA security appliance market suffered knock-on effects from the Russia-Ukraine crisis in Q1 2014, posting a 1.4% decline year over year, according to the latest insights from IDC.

Shipments fell by 2.3% year over year, with much of the cause being down to the worsening crisis in eastern Ukraine, which affects the wider region, IDC said. However the research house said it expects the EMEA security appliances market to grow by a compound annual growth rate (CAGR) of 6.3%  in the five years to 2018, reaching $4.4bn in value.

"The security appliance market in Europe, the Middle East, and Africa slowed down in 1Q14 despite a lively industrial production recovery both in western and eastern Europe," said Oleg Sidorkin, senior research analyst at IDC.

"We expect overall demand for security appliances to recover in the next quarters, though the political instability in Ukraine and the economic recession in Russia, one of the most dynamic markets in the past, will have an impact on market development."

In the CEMA (Central and Eastern Europe, Middle East and Africa) region, the security appliance market contracted 7.5% year over year, reaching $178.13m in value. IDC said that the decline was driven mainly by economic and political turbulence in Russia, triggered by the situation in Crimea and eastern Ukraine.

This led IDC to reduce its forecast for CEMA from 7.2% to 1.7% growth due to the worsening situation in Russia and Ukraine, which will have a negative impact on the rest of the market. However, IDC still forecast a CAGR of 7.9% by 2018 in CEMA.

"In Q1 2014, Poland, Hungary, and Turkey were among the fastest-growing countries in the region," said Sidorkin.

"As economic recovery in Europe is accelerating and demand in Russia and Ukraine has contracted, the developing countries in Central Europe will be among the key growth areas for security appliances in 2014."

Cisco was the top overall security appliance vendor in Q1 2014 with 19% market revenue share, IDC said. The vendor increased its lead over closest rival Check Point to 1.8 percentage points. And in terms of categories, unified threat management (UTM) was the only category to see growth in the quarter, IDC said. Appliances in this category grew 16.1% year over year, representing 48.7% of the total market value.

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