According to the International Data Corporation (IDC) Worldwide Quarterly Security Appliance Tracker, factory revenue rose in the first quarter of 2013 (1Q13) compared to Q1 2012, while unit shipments declined over the same period. Worldwide factory revenue was up 3.4% year over year to $2.0 billion, as shipments decreased -6.8% to 472,306 units. The shipment decline was due in large part to Cisco, which has transitioned to new appliances with a higher price point causing revenue to remain more consistent compared to declining units. The year-over-year growth rate for factory revenue was the lowest since Q1 2010.
Geographically, Canada saw the highest year-over-year growth in the quarter (16.4%), followed by Japan (8.6%). Asia/Pacific (excluding Japan) continued to see steady growth (7.1%) and accounted for more than 16% of worldwide factory revenue. Western Europe also built on a strong fourth quarter and saw factory revenue rise 3.9% versus 1Q12. Asia/Pacific (excluding Japan) was the only region to see a year-over-year increase in unit shipments in the quarter (2.8%). The United States recorded a -0.2% decline in factory revenue and a unit decrease of -10.2% compared to 1Q12.
"The government sector seemed to impact the results somewhat in the United States," said John Grady, Research Manager, Security Products at IDC "However, all organizations continue to prioritize security within their overall IT budget. With advanced, targeted threats a growing concern, IDC expects continued high single-digit growth in the overall security appliance segment over the course of 2013.”
Cisco continues to lead the overall security appliance market with a 16.6% share in factory revenue for the first quarter, but this was down from 17.8% in the prior year period. Check Point held the number 2 spot with a 12.5% share for the quarter as revenue increased 5.7% compared to the first quarter of 2012. Fortinet saw the largest revenue growth among the top five vendors at 16.6%. The combined shares of the top 5 global vendors represented 49% of the market in Q1 2013. Blue Coat, Palo Alto Networks, and Sophos were some of the vendors outside the top 5 seeing strong growth in the quarter.
Top 5 Vendors, Worldwide Security Appliance Revenue, First Quarter of 2013
(revenues in $ millions)
Source: IDC Worldwide Quarterly Security Appliance Tracker, June 20, 2013
At the functional market level, the Unified Threat Management (UTM) segment saw the largest year-over-year revenue growth at 36.4% and accounted for 37.1% of security appliance revenue in 1Q13, as multi-function appliances continued to drive growth in the overall market. The Firewall/VPN market declined 21.2% year over year, but still represented 20.9% of security appliance revenue in the quarter. The Content Security segment rose by 6.8% compared to the prior year and accounted for 20.3% of the market. IDP saw modest growth of 0.3% compared to the prior year period.
"While businesses continue to explore the opportunities for migrating to a private cloud network as a new technology paradigm, unified security prospects will continue to expand rapidly into other small and medium-size businesses where demand is greater than ever," said Ebenezer Obeng-Nyarkoh, Senior Research Analyst, Worldwide Trackers Group.
IDC's Worldwide Quarterly Security Appliance Tracker is a quantitative tool for analyzing the global security market on a quarterly basis and is available on demand. The Tracker includes quarterly shipments and revenues (both customer and factory), segmented by vendor, family, model, region, operating system, price band, and security functions.