Bucking a trend, security appliance market grows

IDC data from Western Europe suggests that companies are prioritizing security during the recession

The security appliance market in Western Europe grew 14.4 percent in 2008 and is expected to continue to expend this year, albeit at a slower rate, according to the latest figures from analyst firm IDC.

Revenue for security appliances in 2008 was US$1.48 billion. That figure is projected to rise to $1.65 billion this year, resulting in about 9.4 percent growth, said Romain Fouchereau, an IDC research analyst.

Compared to other hardware markets such as servers, PCs or storage systems, security appliances was one of the only ones to record double-digit growth in 2008, Fouchereau said. That contrasts with overall IT spending, which is expected to decrease due to the global recession.

"Businesses can't afford not to protect their networks or protect their data particularly in moments where the economy is uncertain," Fouchereau said.

High-end appliances that have multiple security functions such as a firewall, intrusion protection and VPN capabilities are driving the market, particularly for enterprises with more than 10,000 employees, Fouchereau said.

Revenue for so-called Unified Threat Management (UTM) appliances totalled $130.27 million for the fourth quarter of 2008, 18.7 percent more than fourth quarter 2007, IDC said. Fortinet was the top vendor, followed by Cisco Systems and Check Point, IDC said.

High-end firewalls are selling better than lower-end ones, with many smaller customers opting for UTM appliances instead, IDC said.

In another area, Intrusion Detection System (IDS) appliances are ceding ground to Intrusion Protection System (IPS) devices.

IDS is an older technology that will monitor and report on network traffic but often does not intervene unlike IPS, which can be programmed to take action in certain attack scenarios, Fouchereau said.

IPS is more popular as companies strive to comply with security standards from the payment card industry dealing with the storage and transfer of sensitive financial data, Fouchereau said.

For the fourth quarter of 2008, IPS revenue grew to $87.49 million, 22.9 percent more than the same period a year before. Cisco leads in both IDS and IPS, followed by IBM and TippingPoint Technologies, IDC said.

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Jeremy Kirk

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