Security Appliance Revenue Jumps 6.8% in Fourth Quarter of 2013, According to IDC

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According to the International Data Corporation (IDC) Worldwide Quarterly Security Appliance Tracker, factory revenue and units rose in the fourth quarter of 2013 (4Q13) compared to the fourth quarter of 2012. Worldwide factory revenue was up 6.8% year over year to $2.4 billion, as shipments increased 0.6% to 546,384 units. For the full year 2013, revenue grew 5.4% year over year to $8.6 billion, while shipments decreased for the first time since 2009, falling -2.1% to 2 million units.

Geographically, Asia/Pacific (excluding Japan) saw the highest year-over-year factory revenue growth in the quarter (14.9%), followed by Canada which grew at 11.9%. Central and Eastern Europe posted the largest decline in 4Q13, with revenue falling -4.9% compared to the prior year. The United States finished the year with growth of 7.7% in the quarter.

"The fourth quarter was definitely a strong finish to the year, with revenue increasing 10% sequentially, and nearly 7% compared to last year's fourth quarter," said John Grady, Program Manager, Security Products at IDC. "With high profile security incidents, such as the Target breach, becoming more common, organizations are continuing to prioritize security spending."

Cisco continues to lead the overall security appliance market with an 18.1% share in factory revenue for the fourth quarter on year-over-year growth of 23.6%. This was due in large part to its Sourcefire acquisition, which closed in early October. Check Point held the number 2 spot with a 12.7% share for the quarter as revenue increased 5.6% compared to the fourth quarter of 2012. Fortinet remained the third largest security appliance vendor, with a 6.6% share in the quarter. Juniper continued to build sequential momentum, but declined 6.4% compared to the prior year. Palo Alto Networks again held the fifth spot among security appliance vendors with a share of 5.4% on 47.7% growth compared to the prior year.

Functional Market Results

At the functional market level, the Unified Threat Management (UTM) segment saw the largest year-over-year revenue increase at 25.7% and accounted for 41.2% of security appliance revenue in 4Q13. This marked the first time UTM accounted for more than 40% of the appliance market. Firewall revenue declined -7.1% year over year, as more gateway appliances gain additional functionality and are counted as UTM. Intrusion Detection and Prevention (IDP) again grew over the previous year, increasing 3.8% compared to 4Q12. Finally, the content security segment declined -2.9% year over year and accounted for 16.6% of the market.

"Providing a high degree of reliability and advanced security is key to identifying and minimizing cyber crime," said Ebenezer Obeng-Nyarkoh, Senior Research Analyst, Worldwide Trackers. "With the number of cyber threats increasing, business owners are looking for comprehensive solutions to protect their network."

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.

About IDC Trackers

IDC Tracker products provide accurate and timely market size, vendor share, and forecasts for hundreds of technology markets from more than 100 countries around the globe. Using proprietary tools and research processes, IDC's Trackers are updated on a semiannual, quarterly, and monthly basis. Tracker results are delivered to clients in user-friendly excel deliverables and on-line query tools. The IDC Tracker Charts app allows users to view data charts from the most recent IDC Tracker products on their iPhone and iPad.

Companies Covered:

Check Point Software Technologies Ltd., Sourcefire, Inc., Fortinet, Inc., Palo Alto Networks, Inc., Cisco Systems, Inc.

Regions Covered:

Asia Pacific, Central and Eastern Europe, United States

Topics Covered:

Firewall and VPN security appliance products, Unified threat management
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