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European security appliance sales grow 13.5%

Shifting dynamics

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The Western European security appliance market grew by 13.5 per cent, with factory revenues reaching $86.1 million last quarter, far outperforming other regions globally.

That's according to a study by market watcher IDC which found that Western Europe now represent 25.8 per cent of worldwide security server appliance revenues. Unit growth is even stronger with 40,563 units shipped in Western Europe in 2Q 2003, up 19.7 per cent on Q2 2003. Western Europe now accounts for almost a quarter (24.6 per cent) of all appliance units shipped globally.

Looking at the market by product types reveals a more complex dynamic than the strong growth across the board IDC's headline figures might at first suggest.

In particular, the firewall/VPN market can be considered as having reached maturity, and since it constitutes 85.1 per cent of all security appliances shipped, as tracked by IDC, any decline seen here strongly influences the overall market.

Meanwhile, the Intrusion Detection Software (IDS) appliance market is still immature, but showing triple-digit growth. However, it must be remembered that while the growth is impressive, it starts from a much smaller base.

IDC notes a generally shift in the Western European market towards either high-end security appliances or commodity devices.

Vendors now have two areas of focus in the appliance market, according to IDC. These are:

  • The convergence of multiple security applications into a single high-end box and driving these appliances upstream into the enterprise data-centre.
  • Incorporating enterprise class functionality at a price point that can be digested by the smaller businesses and telcos at the low-end.

According to Carla Arend, research analyst for IDC's European Security Products and Strategies service, "The strong growth in Europe signals that there is still major potential, especially in the SMB market, which has traditionally under-invested in security and now embraces security appliances as an easy way to fulfil security requirements without adding large administrative overheads and complexity to their networks.

"However, the firewall/VPN appliance market is maturing and vendors are striving to integrate firewall functionality with other security functions, to sustain growth moving forward. IDS appliances take this complex technology, which was previously limited to large enterprises, to the mainstream market, resulting in healthy growth across Western Europe."

The Western European security server appliance market sees Cisco maintain its top-ranked position in terms of revenue, with 29.9 per cent of the market (largely attributable to sales of its PIX firewall appliance). Nokia, the second ranked vendor accounts for 18.4 per cent of the market, and after showing impressive growth for consecutive quarters, Netscreen follows in third with, 14.2 per cent of Western Europe revenues. ®

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