Network security revenue up 2% in 1Q06

Market Wire, June, 2006

Worldwide network security appliance and software revenue climbed 2% to $1.2 billion between 4Q05 and 1Q06, and is forecast to reach $6 billion in 2009, according to Infonetics Research's Network Security Appliances and Software report.

Many customers, while still investing in firewalls, VPNs, IDS/IPS, and gateway AV, are also looking deeper into NAC and content security solutions, which is delaying some core network security purchasing until later in 2006.

"VPN/firewall functionality -- the core of most integrated security appliance products -- is truly reaching the commodity stage," said Jeff Wilson, principal analyst at Infonetics Research. "New silicon vendors are making it possible for manufacturers to build and sell multi-gigabit VPN/firewall appliances for under $5,000, with that number declining rapidly over the next year. In addition, new security vendors are building Ethernet switches that offer full security on every single port at very affordable prices, driving prices down and making competition fiercer for all integrated security products."

1Q06 Highlights

--  Integrated security appliances and software make up 76% of worldwide
    network security appliances and software revenue, IDS/IPS 14%, gateway anti-
    virus 10%; by 2009, gateway anti-virus grows to 14% of the total
--  Cisco remains the revenue leader overall, with 35% of total network
    security appliances and software; strong router sales helped Cisco increase
    share this quarter
--  Check Point and Juniper are tied for second at 9%
--  ISS, McAfee, Nokia, Nortel, SonicWALL, and Symantec are strong second-
    tier players, each with between 1% and 7% of the market
--  Infonetics' 1Q06 revenue forecast, made in 4Q05, was within 1% of
    actual revenue
    

The report tracks integrated security appliances in six price categories, hardware secure routers, SSL VPN gateways, VPN/firewall software, host- and network-based IDS/IPS products, and gateway anti-virus products.

Companies tracked: AEP, Array, Avaya, Aventail, Check Point, CipherOptics, Cisco, Citrix, CA, CyberGuard, D-Link, Enterasys, F5, Fortinet, Intel, Juniper, Lucent, McAfee, NETASQ, Netilla, Nokia, Nortel, Secure Computing, SonicWALL, Symantec, TippingPoint, WatchGuard, Whale, ZyXEL, and others.

Download sample data at www.info.infonetics.com . For sales, contact Larry Howard, vice president, at larry@infonetics.com , (408) 583-3335.

Infonetics Research ( www.infonetics.com ) is the premier international market research and consulting firm specializing in data networking and telecom. Services include quarterly market share and forecasting, end-user survey research, service provider survey research, and service provider capex analysis.

Press Contact: Jeff Wilson Principal Analyst Infonetics Research (408) 583-3337 Email Contact