Both factory revenue and unit shipment growth for security appliances rose in the fourth quarter of 2012 (4Q12) compared to the previous quarter.
According to the International Data Corporation (IDC) Worldwide Quarterly Security Appliance Tracker, worldwide factory revenue was up 7,2% year on year to $2,3-billion, as shipments increased 5,2% to 538 428 units. 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% year over year. Western Europe growth picked up in the final quarter of 2012, with factory revenue rising 3,9% versus Q4 2011.
Japan had the highest unit growth year over year at 25,1%, followed closely by APeJ at 17,4%. The US recorded 4,1% revenue growth and a unit decrease of 1,1% compared to Q4 2011, indicating 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,” says John Grady, research manager: security products at IDC.
“Organisations continue to prioritise 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 continues to lead the overall security appliance market with 15,5% share in factory revenue for the fourth quarter, but this was down from 17,7% in the prior year period. 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%. The combined shares of the top five global vendors represented 46,3% of the market in Q4 2012 losing 2,6 points compared to a year ago. The share of others increased primarily due to strong quarters from Blue Coat, Palo Alto Networks, Barracuda, Sourcefire and Dell SonicWall.
At the functional market level, the unified threat management (UTM) segment saw the largest year-over-year revenue growth at 34,3% and accounted for 35% of security appliance revenue in 4Q12, as multi-function appliances continue to drive growth in the overall market.
The Firewall/VPN market represented 24% of security appliance revenue despite a year-over-year decline of 2,8% after 10 consecutive quarters of steady growth. The IPS segment declined by 3,6% compared to the prior year as these dedicated products continue to battle 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,” says Ebenezer Obeng-Nyarkoh, senior research analyst: Worldwide Trackers Group at IDC.