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

FRAMINGHAM, Mass.--(BUSINESS WIRE)--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.

“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”

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.

Top 5 Vendors, Worldwide Security Appliance Revenue, Second Quarter of 2012
(revenues in $ millions)
Vendor	2Q12 Revenue	2Q12 Share	2Q11 Revenue	2Q11 Share	2Q12/2Q11 Growth
1. Cisco	$345	17.6%	$349	18.9%	-1.1%
2. Check Point	$255	13.0%	$220	11.9%	15.8%
3. Juniper	$143	7.3%	$143	7.7%	-0.1%
4. Fortinet	$116	5.9%	$92	5.0%	26.9%
5. McAfee	$110	5.6%	$98	5.3%	12.2%
Others	$993	50.6%	$944	51.2%	5.2%
Total	$1,962	100%	$1,846	100%	6.3%
Source: IDC Worldwide Quarterly Security Appliance Tracker, September 28, 2012

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

International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. IDC helps IT professionals, business executives, and the investment community to make fact-based decisions on technology purchases and business strategy. More than 1,000 IDC analysts provide global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries. For more than 48 years, IDC has provided strategic insights to help our clients achieve their key business objectives. IDC is a subsidiary of IDG, the world's leading technology media, research, and events company. You can learn more about IDC by visiting www.idc.com.

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