Security Appliance Market Growth Slows Slightly in Second Quarter of 2012, According to IDC

FRAMINGHAM, Mass., October 1, 2012 – According to the International Data Corporation (IDC) Worldwide Quarterly Security Appliance Tracker, both factory revenue and unit shipments grew in the second quarter of 2012 (2Q12) marking the ninth consecutive quarter of year-over-year growth. Worldwide factory revenue was up 6.3% year over year to just under $2.0 billion, as shipments increased 6.5% to 496,697 units. In the first quarter, factory revenue growth was 9.7% and unit growth was 12.9% compared to Q1 2011.

Geographically, shipments grew fastest in Latin America with an 18.6% year-over-year increase, just ahead of Central & Eastern Europe at 18.5%. Asia/Pacific (excluding Japan) and Canada were the only regions with double-digit year-over-year growth in factory revenue. The United States saw 8.0% growth in revenue on 4.8% growth in units, due to strong results in the unified threat management (UTM) segment.

"Security professionals with the responsibility of providing applicable cyber intelligence and timely technical information for defending against emerging threats in rapidly growing emerging markets require multiple levels of security to protect everything from small- and medium-sized businesses to corporate data centers," said Ebenezer Obeng-Nyarkoh, senior research analyst, Worldwide Trackers Group.

The combined shares of the top 5 global vendors represented 49.4% of the market in 2Q12. Cisco continues to lead the overall security appliance market with 17.6% share in factory revenue for the second quarter, but this was down from 18.9% in the prior year period. Check Point held the number 2 spot with 13.0% share for the quarter as revenue increased 15.8% compared to the second quarter of 2011. Fortinet saw the largest growth among the top five vendors at 26.9%. McAfee also saw double-digit revenue growth and a modest share increase of 0.3 points.

Functional Market Results

At the functional market level, the Firewall/VPN segment again saw the largest year-over-year revenue growth at 21.2% and accounted for 28.3% of the overall security appliance market in 2Q12. However this is a bit misleading as the growth is entirely due to shifts in Cisco's revenue. The UTM market represented 27.8% of security appliance revenues thanks to 19.0% year-over-year growth. The IPS, Content Management, and VPN segments all saw revenue declines compared to 2Q11.

"While the macroeconomic environment remains somewhat uncertain, these latest tracker results show that companies continue to prioritize security and will spend the dollars necessary to secure their organizations' infrastructure," said John Grady, senior research analyst, Security Products at IDC.

IDC's Worldwide Quarterly Security Appliance Tracker is a quantitative tool for analyzing 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.

About IDC

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