Market Consolidation Continues as Unified Solutions Prevail in the South African Security Appliances Market 

The South African security appliances market declined 10.3% in value year on year during Q4 2013 to total $12.25 million, according to the 'EMEA Quarterly Security Appliance Tracker' published recently by global market intelligence firm International Data Corporation (IDC). The Tracker further predicts that the market's value will increase at a five-year compound annual growth rate (CAGR) of 6.5% to total $66.85 million in 2018, up from $48.75 million in 2013.

The decline in the market's value was primarily caused by consumer budget constraints and the South African rand depreciating more than 18% against the U.S. dollar in 2013. Despite this, Fortinet, Juniper, Cisco, and CheckPoint all maintained their leading market positions, collectively representing about 61% of the market's value share in Q4 2013.

Together, firewalls and unified threat management (UTM) appliances increased their contribution to the security appliances market in Q4 2013, generating 15.0% and 59.6%, respectively, of the total market value. The corresponding value contributions of content management and intrusion detection and prevention (IDP) appliances amounted to 11.5% and 6.2%, respectively. Given the current cost-reduction and unification trends, demand for content management and IDP integrated into UTM and next-generation firewall appliances is set to increase. Meanwhile, market demand for standalone versions of VPN, IDP, and content management appliances is expected to concentrate on the medium to high-end range.

In Q4 2013, 2,934 units of security appliances were shipped to South Africa. Total annual shipments are expected to increase from 10,847 units in 2013 to 16,667 units in 2018, representing a five-year CAGR of 9.0%.

"The trend toward market consolidation continues, with UTM vendor Sophos acquiring close competitor Cyberoam in February 2014," says Jiaqi Sun, a research analyst at IDC South Africa. "This acquisition will further strengthen Sophos’s capability to offer a comprehensive range of security solutions and expand its customer base in emerging markets, including South Africa."

"Cost-effective UTM appliances will continue to gain traction in the largely untapped small and medium-sized business segment, where most customers still rely on traditional firewalls embedded in their network routers," continues Sun. "The fight against modern threats to service availability, such as distributed denial of services, will require specialized security solutions to complement the firewall/UTM tier following a systematic approach for protecting Internet, datacenter, and end-user networks."

"Moreover, the uptake of virtualized security solutions is increasing; these solutions form part of the server infrastructure on premise and/or hosted remotely by datacenter service providers. With the current slow-growing economic environment, virtualized security solutions could maximize the capacity utilization of security appliances and enhance overall security system performance for end users in the medium term," concludes Sun.

About the Research

IDC's EMEA Quarterly Security Appliance Tracker provides total market size and vendor shares for security appliance technologies in an easy-to-use pivot table format. The tracker covers 42 countries across Western Europe, Central and Eastern Europe, and the Middle East and Africa. The security appliance market is further segmented by product category, product, price band, product brand, model name, server class, and operating system. For more information about IDC's EMEA Quarterly Security Appliance Tracker, please contact Andries Lombaard at alombaard@idc.com, Oleg Sidorkin at osidorkin@idc.com, or Jiaqi Sun atjsun@idc.com.