Following is information and insight from IHS Markit about our Q3 2016 Network Security Appliances and Software Quarterly Market Tracker.
- Although there are many pressures on the network security market—both technology specific and macroeconomic—the fundamental demand for security solutions continues to accelerate
- IHS Markit forecasts the global network security appliance and software market to total $10.8 billion in 2020, driven by virtualization and cloud enablement
- Interest in sandboxing and advanced persistent threat (APT) protection is peaking, and the success of standalone and integrated solutions will continue to drive growth
The network security appliance and software market finished the first half of 2016 in a strong position, with worldwide revenue totaling $2.2 billion—up 6 percent both sequentially and year-over-year.
Fortinet and Palo Alto Networks continue to post solid year-over-year growth, and vendors are experiencing minimal impact from macroeconomic issues like Brexit. Vendors are reporting strength across their portfolios, as well and strong traction for integration of next-gen advanced threat protection (ATP) and virtualization/cloud applications.
Revenue for data center and carrier appliances—those $30,000 and up—and virtual security appliances was $2.4 billion in 2015, and by 2020 it is projected to increase 62 percent to $3.9 billion. Purpose-built virtual appliances will notch the highest growth between 2015 and 2020.
Faced with a rapidly changing threat landscape, security customers are still formulating long-term protection strategies, and the dizzying array of options is forcing them to rethink spending, evaluate new vendors and re-architect their protection infrastructures as they try to choose the right solutions. As well, the emergence of software-defined networking (SDN) and network functions virtualization (NFV) as dominant networking trends is pushing enterprise and service provider customers to look at virtual appliances and other software solutions that work in these environments.
Security software-as-a-service (SaaS) and hosted security services are outgrowing product markets, and the move to the cloud for IT infrastructure is raising questions about what security architectures will look like five years from now. A significant portion of future revenue growth will be driven by carrier rollouts of virtual customer premises equipment (vCPE) and the use of mainstream virtual integrated appliances in large data center and cloud environments.
Most network security vendors are acutely aware of the major shifts happening in this space, and although individual category growth may be affected by shifts in technology or deployment strategy, most vendors are hedging their bets, offering a bit of everything, from standalone appliances and software, to integrated products, virtualized offerings and even full cloud services.
While the long-term ripples of Brexit will play out for some time, IHS Markit believes that security revenue will be less impacted than other areas of IT and telecommunications.
Network Security Report Synopsis
The IHS Markit network security report provides worldwide and regional market size, vendor market share, forecasts through 2020, analysis and trends for integrated security appliances, secure routers, Secure Sockets Layer (SSL) virtual private network (VPN) gateways, VPN and firewall software, and intrusion detection and prevention systems (IDPS).
For information about purchasing this report, contact the sales department at IHS Markit in the Americas at (844) 301-7334 or AmericasLeads@ihsmarkit.com; in Europe, Middle East and Africa (EMEA) at +44 1344 328 300 or firstname.lastname@example.org; or Asia-Pacific (APAC) at +604 291 3600 or technology_APAC@ihsmarkit.com.