Security Appliance Market Growth Slowed in Third Quarter of 2012, IDC Says

Both factory revenue and unit shipments grew in the third quarter of 2012 compared to the previous year, according to the International Data Corporation (IDC) Worldwide Quarterly Security Appliance Tracker. Worldwide factory revenue was up 5.7% year over year to just over $2.0 billion, as shipments increased 1.0% to 499,022 units. In the previous quarter, factory revenue growth was 6.6% and unit growth was 5.8% compared to the second quarter of 2011.

“Overall, macroeconomic conditions have been questionable at best. While the security market remains more resilient than others, there was a definite slow-down in growth rates in the third quarter,” said John Grady, research manager, Security Products at IDC. “That being said, the evolving threat landscape continues to drive spending on security products as organizations battle to keep their infrastructures secure and their data protected.”

Geographically, revenue grew fastest in Asia/Pacific (excluding Japan) with a 13.3% year-over-year increase. Western Europe continued to see sluggish growth, increasing just 0.5% year over year. Japan had the highest unit growth year over year of 8.3%, followed closely by combined Central and Eastern Europe and Middle East, and Africa at 7.9%.

The United States recorded 4.6% revenue growth on a unit decrease of 1.2% versus 3Q11, indicating some softness in lower price bands and that larger enterprises and service providers drove revenue growth.

At the functional market level, the Unified Threat Management (UTM) segment saw the largest year-over-year revenue growth at 24.3% and accounted for 33.3% of security appliance revenues in 3Q12, as multi-function appliances continue to drive growth in the overall market. The Firewall/VPN market represented 26.7% of security appliance revenues thanks to 7.3% year-over-year growth due primarily to Cisco and Juniper. The IPS and VPN segments were the only markets to show revenue declines compared to 3Q11.

“The shift in network security for continuous security processes in detecting threats that other solutions miss is leading the move for unified security management for protection against advanced threats, modern malware, and data theft,” said Ebenezer Obeng-Nyarkoh, senior research analyst, Worldwide Trackers Group.

(For more information contact: IDC, John Grady, jgrady@idc.com, 508-988-6743; Eb Obeng-Nyarkoh, eobeng-nyarkoh@idc.com; 508-935-4356.)

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