Security appliance market grows 57% in Q2 2004

The total security server appliance market place grew 57% YTY in Q2 2004. Four of the top 5 vendors posted strong revenue growth rates year over year, although each lost market share. Smaller vendors gained market share and en masse contributed strongly to the growth of the overall market. The smaller vendors outside the top 5 grew from 27% of the market in Q2 2003 to become 41% of the market in Q2 2004. In the firewall/VPN segment of the market, Cisco remained the clear leader with 35.4% factory revenue market share. Juniper, which acquired NetScreen, took second with 19.4% market share, followed by Nokia with 10.5% share. The firewall/VPN market was down from 1Q04, at -3% growth, but up almost 25% compared with the year ago quarter.

In a closely contested and high growth segment, Unified Threat Management security appliances grew 60% compared with 1Q04. Fortinet took leadership of the UTM marketplace with 24.1% market share, edging out Symantec with 22.8% share. Secure Computing retained at 9.3% market share in the UTM space. The Intrusion Detection & Prevention (ID&P) security appliance market has Cisco as a strong number 1 in market share with 24.5%, followed by ISS at 14.6% and McAfee Security with 10.7% share. The ID&P market as a whole grew at an outstanding pace of 29% compared with Q1 2004 and 149% year over year.

Top 5 security appliance vendors in Q2 2004

Vendor     Q2 2004    Market    Q2 2003     Market  Revenue Growth
Revenue    Share     Revenue     Share      2004/2003
Cisco           $152.46    29.1%    $114.84     34.4%         32.8%
Juniper          $74.44    14.2%     $53.22     16.0%         39.9%
Nokia            $38.40     7.3%     $43.99     13.2%        -12.7%
SonicWALL        $26.71     5.1%     $17.96      5.4%         48.7%
WatchGuard       $16.53     3.2%     $12.70      3.8%         30.1%
Others          $214.85    41.1%     $90.72     27.2%        136.8%
All Vendors     $523.39     100%    $333.43      100%         57.0%