Security Appliance Market Continues to Grow Steadily in Fourth Quarter of 2012, According to IDC

FRAMINGHAM, Mass., March 25, 2013 – According to the International Data Corporation (IDC) Worldwide Quarterly Security Appliance Tracker, both factory revenue and unit shipment growth rose in the fourth quarter of 2012 (4Q12) compared to the previous quarter. 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 18.0% 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 United States 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," said John Grady, research manager, Security Products at IDC. "Organizations continue to prioritize 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 5 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.

Functional Market Results

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 35.0% of security appliance revenue in 4Q12, as multi-function appliances continue to drive growth in the overall market. The Firewall/VPN market represented 24.0% of security appliance revenue despite a year-over-year decline of 2.8% after ten 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," said Ebenezer Obeng-Nyarkoh, senior research analyst, Worldwide Trackers Group.

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 Trackers

IDC Tracker products provide accurate and timely market size, vendor share, and forecasts for hundreds of technology markets from more than 100 countries around the globe. Using proprietary tools and research processes, IDC's Trackers are updated on a semiannual, quarterly, and monthly basis. Tracker results are delivered to clients in user-friendly excel deliverables and on-line query tools. The IDC Tracker Charts app, available at iTunes, allows users to view data charts from the most recent IDC Tracker products on their iPhone and iPad.

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 49 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.