Net Security/Appliance Market Grew by 33% in 2004

Global yearly revenue for network security appliance and software was up nearly one third in 2004, and is projected to grow by another half by 2008.

Infonetics has released the results of its quarterly "Network Security Appliances and Software" report, and says that market brought in $3.7 billion in 2004, up 30 percent from 2003, and is projected to grow to $5.5 billion in 2008,

The firm said worldwide network security revenue was up 5 percent between 3Q04 and 4Q04, with growth in all categories except VPN/firewall software. The firm also said it expects revenue to grow 25% to $1.2 billion in 4Q05, as part of a longer term trend of single and double-digit quarterly growth it expectes will last for several more years.

Infonetics reported that VPN and firewall appliances and software made up the majority of revenue (78 percent in 4Q04), with IDS/IPS second at 15%, and gateway antivirus third at 7 percent.

"VPN and firewall appliances are the backbone of network security, and will continue to function as such for a long time," said Jeff Wilson, principal analyst at Infonetics Research. "New technologies will appear, and often start life as standalone products, but eventually their key features will be absorbed into the multi-function VPN/firewall appliances. IPS and gateway anti-virus technology are good examples of this."

As with recent studies on enterprise switch and router and wireless revenue studies, Cisco remains the revenue-leading vendor overall, with over 30 percent of the total network security appliances and software revenue in both 4Q04 and 2004. Check Point and Juniper maintained second- and third-place positions behind Cisco.

The firm also said North America accounts for 46 percent of network security appliances and software revenue in 4Q04, Europe/Middle East/Africa for 29 percent, Asia/Pacific for 21 percent, and Central and Latin America for 5 percent.