FRAMINGHAM, Mass.--(BUSINESS WIRE)--According to the International Data Corporation (IDC) Worldwide Quarterly Security Appliance Tracker, both factory revenue and unit shipments continued to grow in the third quarter of 2014 (3Q14). Worldwide vendor revenue grew 10.0% year over year to nearly $2.4 billion for the 20th consecutive quarter of positive growth. Shipments improved 7.3% year over year to 520,752 units, making this the fourth consecutive quarter of growth. The market is largely being driven by Unified Threat Management (UTM) solutions, a unified cyber security product with many features and capable of performing multiple security functions within a single appliance.
Geographically, all regions except Japan and Central & Eastern Europe have experienced strong revenue growth throughout the past year. Latin America has delivered impressive double-digit growth over the past three quarters, including 20.0% year-over-year growth in 3Q14, making it the fastest growing region with 4.9% of total revenue. Latin America's unit shipments grew 7.9% year over year and 5.2% sequentially, and accounted for 5.8% of total market volume. The aggregate market in Europe, Middle East & Africa (EMEA) produced 27.2% of total market revenue and ended the quarter with 1.8% year-over-year revenue growth, led by Western Europe's fifth consecutive quarter of growth. Asia/Pacific (including Japan) ended the quarter with 23.9% of total market revenues and year-over-year growth of 5.5%, making 3Q14 another strong quarter for the region. The North America region held 43.7% of total market revenue, fueled by year over year growth of 6.5% and 15.5% in Canada and the United States, respectively.
"As the number of mobile users, digital applications, and data networks increase, providing a comprehensive threat management solution for identifying and minimizing cyber crime poses a challenge to every sector and has become a critical piece of infrastructure," said Ebenezer Obeng-Nyarkoh, Senior Research Analyst, Worldwide Trackers Group. "Cyber breaches can be very detrimental to an organization and meeting an organization's security needs with a robust and comprehensive solution has become increasingly challenging."
Vendor Highlights
Cisco continues to lead the overall security appliance market with an 18.7% share of total revenue and a remarkable gain of 2.8 points of share compared to the same quarter a year ago. Check Point remained the second largest security appliance vendor with year-over-year revenue growth of 12.2% and a slight share gain. Palo Alto Networks was the fastest growing vendor in this space with year-over-year revenue growth of 58.3%, making it the number 3 security appliance vendor with 7.6% revenue share and 17.6% share of UTM revenues. Fortinet held the number four position with year-over-year revenue growth of 25.1% and impressive shipment growth. Over the past seven quarters, Fortinet has sequentially increased its unit shipments and remains the largest security appliance vendor in terms of shipments with 20.0% share of shipment volume in 3Q14. For the second consecutive quarter, McAfee gained revenue share from Juniper to maintain its position among the top 5 vendors with 5.1% revenue share and 9.0% year-over-year revenue growth.
Top 5 Vendors, Worldwide Security Appliance Revenue, Fourth Quarter
of 2013
(revenues in US$ millions)
| Vendor |
3Q13 |
3Q13 Share |
3Q14 |
3Q14 Share |
3Q14/3Q13 |
|||||||||||||||
| Cisco | $345.26 | 15.9% | $446.52 | 18.7% | 29.3% | |||||||||||||||
| Check Point | $269.83 | 12.4% | $302.68 | 12.7% | 12.2% | |||||||||||||||
| Palo Alto Networks | $114.72 | 5.3% | $181.60 | 7.6% | 58.3% | |||||||||||||||
| Fortinet | $138.88 | 6.4% | $173.78 | 7.3% | 25.1% | |||||||||||||||
| McAfee | $111.30 | 5.1% | $121.32 | 5.1% | 9.0% | |||||||||||||||
| Other | $1,187.91 | 54.8% | $1,158.74 | 48.6% | -2.5% | |||||||||||||||
| Total | $2,167.91 | 100.0% | $2,384.63 | 100.0% | 10.0% | |||||||||||||||
Source: IDC Worldwide Quarterly Security Appliance Tracker, December 15, 2014
In addition to the table above, an interactive graphic showing total worldwide security appliance revenue for 3Q13 and 3Q14 is available here. Instructions on how to embed this graphic into online news articles and social media can be found by viewing this press release on IDC.com.
Functional Market Results
At the functional market level, Unified Threat Management (UTM) remained the largest market segment as multi-function appliances continue to hold significant share in both revenue and sales volume. The UTM segment ended 3Q14 with 19.8% year-over-year revenue growth, continuing a double-digit growth streak that started in the first quarter of 2010. The Intrusion Detection and Prevention (IDP) segment ended the quarter with 7.8% year-over-year revenue growth and 16.9% market share. The Virtual Private Network (VPN) segment continued to shrink and ended the quarter with a year-over-year decline of -6.9%. The Content Security and Firewall segments ended 3Q14 with combined revenue share of 35.9% and grew 4.0% and 2.1% year over year, respectively.
IDC's Worldwide Quarterly Security Appliance Tracker is a quantitative tool for analyzing the global security market on a quarterly basis. The Tracker includes quarterly shipments and revenues (both factory and customer), segmented by vendor, security function, product family, model, region, operating system, and price band.
About IDC
International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. IDC helps IT professionals, business executives, and the investment community to make fact-based decisions on technology purchases and business strategy. More than 1,000 IDC analysts provide global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries. In 2014, IDC celebrates its 50th anniversary of providing strategic insights to help clients achieve their key business objectives. IDC is a subsidiary of IDG, the world's leading technology media, research, and events company. You can learn more about IDC by visiting www.idc.com. Follow IDC on Twitter at @IDC.
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