Cisco continues to lead the overall security appliance market with 15.5 percent share in factory revenue for the fourth quarter 2012, but this was down from 17.7 percent in the prior year period, according to research firm IDC’s latest Worldwide Quarterly Security Appliance Tracker.
Overall 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 percent year on year to $2.3 billion, as shipments increased 5.2 percent to 538,428 units. In the previous quarter, factory revenue growth was 6.3 percent and unit growth was 1.3 percent compared to Q3 2011, the report noted.
"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," John Grady, research manager for security products at IDC, said in a statement. "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."
Check Point held the No. 2 spot with a 12.7 percent share for the quarter as revenue increased 7.8 percent compared to the fourth quarter of 2011. Fortinet saw the largest revenue growth among the top five vendors at 27.2 percent. The combined shares of the top 5 global vendors represented 46.3 percent of the market in Q4 2012, losing 2.6 points compared to a year ago. The share of other vendors increased primarily due to strong quarters from Blue Coat, Palo Alto Networks, Barracuda, Sourcefire and Dell SonicWall.
Geographically, the United States recorded 4.1 percent revenue growth and a unit decrease of 1.1 percent compared to Q4 2011, indicating some softness in lower price bands and that revenue growth was driven by larger enterprises and service providers.
Asia/Pacific (excluding Japan), with a revenue share of 19.3 percent, continued to see the highest growth at 18 percent year over year. Western Europe growth picked up in the final quarter of 2012, with factory revenue rising 3.9 percent versus Q4 2011. Japan had the highest unit growth year over year at 25.1 percent, followed closely by the Asia/Pacific region at 17.4 percent.
The unified threat management (UTM) market segment saw the largest year-over-year revenue growth at 34.3 percent and accounted for more than one-third (35 percent) of security appliance revenue in 4Q12, as multi-function appliances continued to drive growth in the overall market.
"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," Ebenezer Obeng-Nyarkoh, senior research analyst with the Worldwide Trackers Group, said in a statement.
The firewall and virtual private network (VPN) market represented nearly a quarter (24 percent) of security appliance revenue despite a year-over-year decline of 2.8 percent after 10 consecutive quarters of steady growth. The intrusion prevention systems (IPS) segment declined by 3.6 percent compared to the prior year as these dedicated products continue to battle for share in the midmarket with UTM appliances.