The Worldwide Firewall/VPN Security Appliance Market Is Headed to $4 Billion by 2005, IDC Says

FRAMINGHAM, MA – JUNE 27, 2001 – Buoyed by triple-digit growth for the past two years, the worldwide firewall/virtual private network (VPN) security appliance market is poised to break past the $1 billion barrier this year. According to IDC, revenues increased 153% in 2000 to reach $943 million. By 2005, the market will generate $4 billion.


According to IDC, a firewall VPN security appliance is a combination of hardware, software, and networking technologies whose primary function is to act as a firewall. It comes equipped with VPN capabilities and is becoming an integral part of companies’ Internet security programs.

"Firewall VPN security appliances are catching on because they’re convenient. They provide an all-in-one approach that simplifies product selection, product integration, and ongoing support," said Charles Kolodgy, manager of IDC’s Internet Security research. "They appeal to end-user customers because they’re easy to install and configure, and service providers like them for the same reasons as well as because they can be centrally managed from a remote site."

According to IDC, the U.S. market represents the largest opportunity for firewall VPN security appliances. In 2000, it accounted for 54% of worldwide revenues. However, through 2005, the U.S. market will grow slower than any other region, and by 2005, its market share will have declined to 45%. Western Europe, meanwhile, will increase its share from 26% to 31% during the same time frame.

Firewall/VPN security appliances can be segmented into many different price bands, ranging from less than $300 to more than $50,000. Leaders of individual price bands include NetScreen, Cisco, WatchGuard, and SonicWALL. Because of the large diversity in price, the market’s revenue leader is different than the shipment leader. In terms of revenue, Cisco leads with 45% of 2000 market share. SonicWALL leads in shipment share with 24%.

"Competition within the market is very fierce," Kolodgy said. "Many vendors are gunning for the top spot, and several experienced extremely impressive growth rates in 2000." Nokia increased its revenues more than 430%. NetScreen also grew over 400%, and SonicWALL and WatchGuard both earned growth rates of approximately 200%.

IDC recently published Return of the Black Box: Firewall/VPN Security Appliances Unleashed (IDC #B24797). This bulletin forecasts revenues in the worldwide market by region through 2005 and discusses major trends driving growth. It compares 2000 revenues and shipments by vendor and price band. The bulletin also presents snapshots of the major vendors competing in this market.

To purchase this bulletin, contact Cheryl Toffel at 1-800-343-4952, extension 4389, or at

About IDC

IDC is the foremost global market intelligence and advisory firm helping clients gain insight into technology and ebusiness trends to develop sound business strategies. Using a combination of rigorous primary research, in-depth analysis, and client interaction, IDC forecasts worldwide markets and trends to deliver dependable service and client advice. More than 700 analysts in 43 countries provide global research with local content. IDC's customers comprise the world’s leading IT suppliers, IT organizations, ebusiness companies and the financial community. Additional information can be found at

IDC is a division of IDG, the world's leading IT media, research and exposition company.

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