Western European Security Appliance Market Stabilized in 4Q09 and set for Bounce Back in the Coming Quarters

LONDON, UK. – March 26, 2010 – According to IDC's Western European Quarterly Security Appliance Tracker, 4Q09 revenues for the Western European security appliance market reached $449.5 million in factory revenue, a 0.1% decrease over the same quarter a year ago. Shipments decreased 1.4% over last year's fourth quarter, with 140,401 units shipped. For full 2009, security appliance market revenue totaled $1.61 billion, representing a 3.0% decrease over 2008.

"After a challenging start to the year, the Western European security appliance market turned around in 4Q09 to reach the same results as in the final quarter of the previous year," said Romain Fouchereau, research analyst at IDC. "On the back of those better than expected results in 4Q09, IDC anticipates the security appliance market to fully rebound over the coming quarters."

The firewall/VPN market represented $90.7million in 4Q09, a 33.2% increase over last year's fourth quarter. The firewall/VPN market is becoming more mature in Western Europe and has seen slow growth in recent quarters. However, 4Q09 saw very strong growth for the higher-end firewalls (51% growth in the $100K+ price band). Lower-end firewall appliances didn't perform as well, as end-customers prefer to deploy UTM appliances rather than dedicated FW/VPN. Cisco remained the number 1 vendor in the segment, followed by Juniper Networks and Nokia.

UTM was the largest market of the tracked security appliances, with total revenue of $137 million in the last quarter, corresponding to 5.2% growth over 4Q08. During this time of economic uncertainty, UTM vendors should do relatively well due to the integrated solutions offered by UTM appliances, customers will want more for less from the vendors. Fortinet was the market leader, followed by Juniper and McAfee (Secure Computing).

IPS solutions decreased by 14.5% over the previous year's fourth quarter, representing a $74.2 million market. IPS was the security appliance segment most affected by the recession, partly because of the postponement of security investments in 2009. Cisco was market leader, followed by McAfee and IBM ISS.

Content management appliance revenue showed the strongest growth this quarter at 32.2% year on year, reaching $90.7 million in 4Q09. Content management has seen the strongest growth this quarter, and its revenue is higher than that of firewall. In 4Q09 it became the second largest segment behind UTM. Cisco remained the number 1 vendor in the content management appliance segment and the messaging security subcategory. McAfee led the Web security and Web and messaging (WAM) subcategories.

The VPN appliance market reached $52.3 million in 4Q09, a 17.5% decrease over 4Q08. IDC believes that with the increasing number of remote workers, heightened threats, and also pandemic fear, the VPN market has strong potential for growth in the years to come. Juniper was market leader, followed by Cisco and Check Point.

Top 5 Vendors, Western European Security Appliance Market Factory Revenue ($M), 4Q09

Vendor 4Q08 Revenue 4Q08 Market Share 4Q09 Revenue 4Q09 Market Share Growth 4Q09/4Q08

Cisco $119.99 26.7% $107.34 23.9% -10.5%

McAfee $9.89 2.2% $51.20 11.4% 417.9%

Juniper $31.74 7.1% $34.87 7.8% 9.9%

Check Point $13.98 3.1% $23.05 5.1% 64.8%

Fortinet $23.16 5.1% $20.85 4.6% -10.0%

Others $251.21 55.8% $212.20 47.2% -15.5%

Total market $449.97 100% $449.51 100% -0.1%

Source: IDC, 2010

Top 5 Vendors, Western European Security Appliance Market Factory Revenue ($M), 2009

Vendor 2008 Revenue 2008 Market Share 2009 Revenue 2009 Market Share Growth 2009/ 2008

Cisco $493.01 29.7% $358.69 22.3% -27.2%

McAfee $38.81 2.3% $132.07 8.2% 240.3%

Check Point $47.70 2.9% $122.95 7.6% 157.8%

Juniper $131.51 7.9% $117.75 7.3% -10.5%

Fortinet $69.91 4.2% $72.79 4.5% 4.1%

Other $881.33 53.0% $807.60 50.1% -8.4%

Total market $1,662.27 100% $1,611.84 100% -3.0%

Source: IDC, 2010

* Note that McAfee data did not include Secure Computing's results in 2008.

IDC's Quarterly Security Appliance Tracker offers the ability to quickly and effectively respond to today's dynamic security server appliance market by keeping pace with evolving functionality and the rapid deployment of new models competing in the marketplace. The product provides insight into customer trends by delivering geography-specific product line and vendor market share information in an easy-to-use product interface, enabling quick table customization for business planning activities.

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