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Network security, content security markets to grow in 2007

Kate Dostart, Associate Editor

Network security is still a major issue for most enterprises and network administrators, according to the results of Infonetics Research's most recent report, "Network Security Appliances and Software."

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Infonetics Research's results indicate that network security appliance and software sales between 2005 and 2006 increased by 15% to $4.5 billion. The first report of 2007 is expected to show growth surpassing the $5 billion mark. A similar study in 2005 had forecast that network security appliance and software revenue would reach $4.4 billion in 2006.

Jeff Wilson, principal analyst at Infonetics Research, said that secure routers will continue to dominate worldwide sales, following their 25% increase from 2005 to 2006, with sales surpassing $1 billion this year. Contributing to such stellar sales, secure routers accounted for 29% of the total integrated security appliance market in 2006. They are expected to increase their share of the market at least through 2010.

"Expect the shift to continue, moving from the price-branded segments of the market to the secure routers as they continue to gain acceptance from users," Wilson said. Other network security appliances and software also showed strong growth, with SSL VPN gateway worldwide revenue turning in a 40% increase in 2006. Intrusion detection systems (IDSs) and intrusion prevention systems (IPSs) also pulled in good numbers in 2006, showing a 19% revenue increase.

Market leaders continue to hold steady. Cisco leads the overall network security market, with Juniper and Check Point tied for second -- both finished 2006 with 9% of worldwide revenue.

The network security appliance and software markets are expected to slow in 2007, showing only single-digit percentages. The slowdown results from content security gateways and network access control (NAC) products requiring a larger share of many enterprises' network security budgets. The content security gateway market grew by 33% in 2006, according to another Infonetics Research study, "Content Security Appliances and Software," with appliance sales reaching 70% during the same period.

"Content-related attacks tend to be productivity crippling, directly affecting end users," Wilson said. "In the past, when most companies worried primarily about data theft, most users were unaware of the threats passing across the network, but now users are inundated with malware that interrupts their ability to work. The productivity-loss aspect of content security threats induces many companies to invest in content security solutions."

Infonetics Research's report found that worldwide revenue for content security appliances from 2006 to 2010 is expected to grow by 168%, reaching $2.3 billion in 2010. Software revenue for content security is also expected to show moderate and steady growth, with the lower numbers resulting from the software's lack of appeal among midsized and small businesses.

Sales for these products during 2006 were dominated by the North American market, which accounted for 52% of revenue. The larger, better-established vendors, including Symantec, McAfee and Trend Micro, continued to lead the sales market. Though the average revenue per unit for new content security products is expected to decline significantly, a number of new products are expected to be released during the next year, at a wide range of price points.


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