Global enterprise security market growth slows

• Annual security market growth declined to 7.2% in 2006, from over 30% in 2004 and 20% in 2005
• Symantec and Trend Micro benefited from strong PC market growth
• Growth is predicted to return to double figures in 2007

Highlights from the Canalys Q4 2006 global enterprise security research

The latest global enterprise security research from Canalys shows that the market grew at a reduced rate of 7.2% for the whole of 2006. This is a far cry from the heady days of compliance investment in 2004 and 2005, where year-on-year growth rates in excess of 30% were common. Cisco maintained its leadership position, although Symantec closed in considerably through 2006. Other strong market performers included Trend Micro, Juniper Networks and Fortinet.

North America and EMEA remained the biggest regions in value terms, with the former accounting for almost 47% of the €7.1 billion global end-user spend on enterprise security hardware and software, according to Canalys estimates. The year closed with overall market growth slightly below expectations, but a strong rise in the PC, server and networking markets indicates that a return to low double-digit growth in 2007 is likely.

The enterprise security market is finely balanced between hardware (infrastructure security appliances) and software (client security software and infrastructure security software). It was the software segment that saw higher growth and volume in 2006, rising 8.5% year-on-year to reach €3.7 billion. Canalys expects that new technologies such as multi-core processors, virtualisation, I/O acceleration and co-processor integration will continue to provide a foundation for the software market to hold its own against dedicated infrastructure security appliances.

Symantec remains the largest vendor of enterprise security software, with full year end-user spend estimated at just over €1 billion. Client security software remains the largest segment, dominated by Symantec and McAfee, with Trend Micro and CA slotting in behind. The infrastructure security software segment remains diverse, with CA leading thanks largely to strong performance in the Identity and Access Management space.

Canalys predicts the software firewall market is set for resurgence. “Check Point has demonstrated a return to its roots in the software firewall market. New technologies, such as blade servers, change the economics and viability of security solutions in the datacentre,” commented senior analyst Andy Buss. “Multi-core processing, I/O acceleration and virtualisation will change the way security managers and vendors architect security solutions.”

In security hardware Cisco continued to dominate with a market share more than double that of its nearest competitor. The rapid adoption of advanced security technologies on the Adaptive Security Appliance range (ASA), such as SSL VPN, intrusion protection and advanced content control through the partnership with Trend Micro, have offset declines in the PIX market. Juniper Networks executed well in 2006 to take the overall number two position in security hardware, with leadership in SSL VPNs and high-end firewalls helping cement enterprise acceptance. “The alliance with Symantec for content security on Juniper Networks’ appliances should start to reap rewards through 2007, but it will require work to integrate the two companies’ go-to-market strategies,” Buss added.

Third-placed vendor Nokia had a tough year in the security hardware market. “Product supply issues and competition from Crossbeam Systems in the market for Check Point appliances have affected Nokia’s performance and it will need to regroup and refocus on the security market in 2007,” Buss said. “Meanwhile Fortinet has developed into a vendor of note with its approach of integrated security management across both network and content security, intensifying competition in the hardware firewall market and taking the fourth spot in overall security hardware value.”

About the Enterprise Security Analysis Worldwide service

The shipment estimates discussed in this release come from Enterprise Security Analysis Worldwide, the leading-edge continuous information service designed specifically for enterprise security vendors. Canalys provides a unique and comprehensive view of the market, with detailed segmentation by product type, functionality, routes to market and end-user type. In addition to quarterly market share estimates, clients receive forecasts, quarterly trends presentations and direct access to Canalys analysts by telephone, e-mail and face-to-face.

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About Canalys

Canalys specialises in delivering high quality market data, analysis and advice to the world’s leading technology vendors. It is recognised as a key provider of continuous advisory services and confidential custom projects for marketing managers and strategists within blue-chip IT, telecoms, navigation and consumer electronics companies. It has unrivalled expertise in European routes to market for all kinds of high technology products and services in the consumer, SMB and large enterprise segments, and provides worldwide market data and trends analysis.

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