Security vendors facing the big squeeze

Figures on the past quarter's enterprise security market show the extent to which security and networking are mixing, to the disadvantage of companies producing traditional standalone security devices.

Recent deals like the Symantec/Nortel co-operative agreement and 3Com's acquisition of TippingPoint have highlighted the increasing convergence of networking technologies and security, according to analyst firm Canalys.

"Companies like Nokia and WatchGuard that specialise in security are at risk of being relegated to niche roles if they do not address their absence in the network core," said Andy Buss, senior analyst at Canalys.

"There is more growth to come as small and medium businesses wake up to the need for compliance and personal responsibility under the EU Data Protection Directive. They must ensure that they do not become the subject of criminal proceedings."

The third quarter of 2004 saw strong growth in the enterprise security market as a whole, with sales rising 27 per cent on the year to £424m.

Cisco is still the market leader with a fifth of sales, but Symantec's and Nokia's sales are growing quickly.

Authentication technologies showed the most impressive growth, with 351 per cent over the quarter, while intrusion protection grew 74 per cent year-on-year.

Demand for firewalls and virtual private networks eased slightly as they became more widespread in the market.