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Cooldown expected for firewall market

Firewalls were hot last year, but research shows the standalone market is cooling off as other types of network devices add more security features.

Last year was a big year for firewalls, thanks to more corporate deployments in both primary and branch offices, but a new report suggests the market for basic firewalls is about to cool off.

According to results of a study by In-Stat/MDR, firewall shipments grew by 27% in 2003 to a total of 684,000 units. However, the Scottsdale, Ariz.-based research firm said that as more businesses deploy multi-function security appliances, the market will slow.

Network security, a growing concern for businesses over the last two years, is changing, said Keith Nissen, a senior analyst with In-Stat/MDR and author of the report, "Firewall/VPN Security Market: Hot…Hot…Hot!" He said a business must not only secure its perimeter, but it should also prepare for infected devices connecting directly to the LAN.

In many cases, Nissen said mobile workers may pick up viruses outside of the company's network and then bring their infected PCs back into the office and connect to the LAN, infecting the network.

"Businesses need to protect themselves not only from threats from outside," Nissen said, "but also from threats on the inside."

Nissen projected that the firewall market will grow to 1.9 million units in 2008. But that figure is scaled back from previous projections, in part because vendors, such as Cisco Systems Inc., are folding security into other network devices like routers and switches.

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"Eventually, businesses will no longer buy all their firewalls as separate pieces of equipment," Nissen said. "It will be part of a router or a switch."

But the market for standalone firewalls will not disappear. Nissen said enterprises will always want a certain number of firewalls that they can mange independently of other devices.

In addition, firewall prices will continue to drop. As security features are rolled into more networking gear, it may be hard for businesses to know exactly how much they are spending on security.

"With Cisco today, whatever products you buy, whether it's a router or a LAN switch, you have the ability to add security as a software feature," Nissen said.

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