Worldwide Security Appliance Market Continues Its Growth Trajectory in the First Half of 2015, According to IDC

FRAMINGHAM, Mass. — (BUSINESS WIRE) — September 14, 2015 — According to the International Data Corporation ( IDC) Worldwide Quarterly Security Appliance Tracker, both factory revenues and unit shipments continued to grow in the first half of 2015. Worldwide vendor revenues increased 9.6% year over year to $4.9 billion, and volume shipments expanded to 1.1 million and grew 8.8% year over year. For the second quarter of 2015 (2Q15), worldwide vendor revenues increased 12.2% year over year to $2.6 billion, marking the 23rd consecutive quarter of revenue growth. Shipments grew 10.6% year over year for the seventh consecutive quarter of volume growth ending 2Q15 at 567,388 units shipped.

Regional Highlights

Asia/Pacific (excluding Japan)(APeJ) continued to experience solid year-over-year growth in the second quarter of 2015 and accounted for 17.6% and 21.6% of unit shipments and vendor revenue, respectively. The regional market is primarily driven by China, which accounted for more than 50.0% of both unit shipments and vendor revenue and grew more than twice as fast as the regional market.

Western Europe saw slow revenue growth of 2.3% year over year and accounted for 20.3% of worldwide vendor revenue. Revenue growth was driven by strong results in the United Kingdom and Germany, representing 23.4% and 21.3% of the regional market, respectively. Shipments grew 5.9% year over year and accounted for 25.1% of the overall market.

For the second consecutive quarter, Central & Eastern Europe, the Middle East, and Africa (CEMA) continued to decline year over year but experienced modest sequential growth. Unit shipments were down -2.2% year over year to 41,274 units and revenue declined -6.7% to $150.07 million.

Latin America saw its revenues grow 7.2% year over year while unit shipments increased 7.6% compared to 2Q14. This enabled the region to capture 4.5% of worldwide revenues and 5.5% of shipments in the quarter. The regional market continued to be driven by Brazil and Mexico, which declined modestly year over year.

Canada and Japan together accounted for 5.6% of unit shipments and 6.4% of worldwide vendor revenue. Cumulatively, the two markets declined modestly at -0.9% shipment growth and -0.7% revenue growth.

Due in part to its higher threat profile, the United States market continued to be the largest market for security appliances, accounting for 41.4% of worldwide revenues in 2Q15 with 17.8% year-over-year growth.

"Cybercrime remains a growing global problem and attacks against mission-critical and sensitive services or systems that leads to massive data leaks continue to have far-reaching effects. Because there are so many ingenious ways into a network, having sophisticated cyber security measures is not the end game of a defensive prevention strategy," said Ebenezer Obeng-Nyarkoh, Senior Research Analyst, Worldwide Trackers Group. "The key is faster identification and prevention and this is why in the last seven consecutive quarters the deployment of intrusion detection and prevention solutions (IDP) have been gaining traction. Even though this category only represents 4.2% of volume shipments, we are seeing remarkable expansion with the second quarter showing 13.7% year-over-year growth."

Vendor Highlights

Cisco continued to lead the overall security appliance market with 17.1% share in vendor revenue and a net loss of 1.1 points of share year over year and 0.5 points sequentially. Overall revenue expanded 5.9% year over year and 8.5% sequentially.

Check Point remained the number 2 security appliance vendor with 11.9% year-over-year and 6.7% sequential revenue growth. Check Point ended the quarter with 12.8% worldwide revenue share.

Since entering the top 5 in the second half of 2013, Palo Alto Networks has consistently grown its revenues faster than the overall market. In 2Q15, Palo Alto Networks grew its revenue 51.5% year over year with a net gain of 2.4 share points when compared to the same quarter a year ago.

Fortinet was the number 4 vendor with worldwide market share of 8.3%, resulting in a net gain of 0.7 share points sequentially and 1.1 points year over year. Fortinet had double-digit revenue growth of 30.3% in 2Q15.

Blue Coat rounded out the top 5 vendor list with solid year-over-year revenue growth of 7.3% despite a net loss of -0.4 share points sequentially.

Top 5 Vendors, Worldwide Security Appliance Revenue, Second Quarter of 2015

(revenues in US$ millions)











Cisco   $438   17.1%   $414   18.2%   5.9%
Check Point   $328   12.8%   $293   12.9%   11.9%
Palo Alto Networks   $241   9.4%   $159   7.0%   51.5%
Fortinet   $213   8.3%   $164   7.2%   30.3%
Blue Coat   $111   4.3%   $104   4.5%   7.3%
Other   $1,226   47.9%   $1,146   50.3%   6.9%
Total   $2,558   100.0%   $2,280   100.0%   12.2%

Source: IDC Worldwide Quarterly Security Appliance Tracker, September 14, 2015


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