Firewall and virtual private network appliances were slower growing but continued to be the leading segment of the market in Q4, with 90 percent revenue share. The network intrusion detection submarket shows signs of momentum also, with 19 percent growth in Q4.
Charles Kolodgy, IDC's research director for security products, said growth is occurring in products aimed at small business, branch offices and supporting large data centers. The many flavors of security appliances available service many segments of the market.
The market leader overall was Cisco, grabbing 37 percent of revenue share. Netscreen posted the strongest growth among the top five suppliers, achieving 32 percent revenue growth from the third quarter. Others in the top five were Nokia (2), Sonicwall (4) and Watchguard (5).
"Customers to not have to select or pay for the hardware or the operating system separately, and they do not have to install, configure and test the application. There is a turnkey aspect to appliance that customers and suppliers find attractive," said Chris Christiansen, vice president for IDC's security products service.
From the supplier's standpoint, the appliance form factor greatly simplifies support because variability in the environment is eliminated, Christiansen said by the software and hardware delivered in the box, he suggests. Plus, the sell cycle is shorter, and base-level configuration is simplified, lowering costs.
Also, "It is a shift of responsibility onto the vendor. In these times, that is not a bad thing," Christiansen said.
He does not see the growth in appliances as a threat to software companies. Most of them will make deals with appliance suppliers to put their software on their platforms, or offer their own. IDC is predicting that by 2007, 80 percent of the security market products will be delivered in appliance form.
"We have been tracking appliances in security software for five years and the trend is apparent," Christiansen said.
Adapted from eSecurity Planet.