Security Appliance Market Continues on a Growth Trajectory in the Third Quarter, According to IDC
Geographically, all regions except Japan and Central & Eastern Europe have experienced strong revenue growth throughout the past year. Latin America has delivered impressive double-digit growth over the past three quarters, including 20.0% year-over-year growth in 3Q14, making it the fastest growing region with 4.9% of total revenue. Latin America's unit shipments grew 7.9% year over year and 5.2% sequentially, and accounted for 5.8% of total market volume. The aggregate market in Europe, Middle East & Africa (EMEA) produced 27.2% of total market revenue and ended the quarter with 1.8% year-over-year revenue growth, led by Western Europe's fifth consecutive quarter of growth. Asia/Pacific (including Japan) ended the quarter with 23.9% of total market revenues and year-over-year growth of 5.5%, making 3Q14 another strong quarter for the region. The North America region held 43.7% of total market revenue, fueled by year over year growth of 6.5% and 15.5% in Canada and the United States, respectively.
"As the number of mobile users, digital applications, and data networks increase, providing a comprehensive threat management solution for identifying and minimizing cyber crime poses a challenge to every sector and has become a critical piece of infrastructure," said Ebenezer Obeng-Nyarkoh, Senior Research Analyst, Worldwide Trackers Group. "Cyber breaches can be very detrimental to an organization and meeting an organization's security needs with a robust and comprehensive solution has become increasingly challenging."
Cisco continues to lead the overall security appliance market with an 18.7% share of total revenue and a remarkable gain of 2.8 points of share compared to the same quarter a year ago. Check Point remained the second largest security appliance vendor with year-over-year revenue growth of 12.2% and a slight share gain. Palo Alto Networks was the fastest growing vendor in this space with year-over-year revenue growth of 58.3%, making it the number 3 security appliance vendor with 7.6% revenue share and 17.6% share of UTM revenues. Fortinet held the number four position with year-over-year revenue growth of 25.1% and impressive shipment growth. Over the past seven quarters, Fortinet has sequentially increased its unit shipments and remains the largest security appliance vendor in terms of shipments with 20.0% share of shipment volume in 3Q14. For the second consecutive quarter, McAfee gained revenue share from Juniper to maintain its position among the top 5 vendors with 5.1% revenue share and 9.0% year-over-year revenue growth.
Functional Market Results
At the functional market level, Unified Threat Management (UTM) remained the largest market segment as multi-function appliances continue to hold significant share in both revenue and sales volume. The UTM segment ended 3Q14 with 19.8% year-over-year revenue growth, continuing a double-digit growth streak that started in the first quarter of 2010. The Intrusion Detection and Prevention (IDP) segment ended the quarter with 7.8% year-over-year revenue growth and 16.9% market share. The Virtual Private Network (VPN) segment continued to shrink and ended the quarter with a year-over-year decline of -6.9%. The Content Security and Firewall segments ended 3Q14 with combined revenue share of 35.9% and grew 4.0% and 2.1% year over year, respectively.
IDC's Worldwide Quarterly Security Appliance Tracker is a quantitative tool for analyzing the global security market on a quarterly basis. The Tracker includes quarterly shipments and revenues (both factory and customer), segmented by vendor, security function, product family, model, region, operating system, and price band.
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