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Firms' security spending slows as economic gloom bites

02 Jan 2013
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Firms are reining back their spending on network security appliances as economic conditions force purse strings to tighten.

Research firm IDC said that its quarterly tracker report found that factory revenues were up 5.2 percent in the third quarter of 2012 with companies purchasing nearly 500,000 appliances and generating some $2.0bn in revenues.

While the market saw a year-on-year gains, the growth rate appears to be slowing. IDC noted that in the previous quarter, factory revenue had grown by 6.5 percent compared to the same period in 2011.

Cisco was named the top vendor on the quarter, with $326m in sales, accounting for 16.2 percent of the market. Both figures are down from the same period in 2011.

Check Point was second with a 12 percent cut of the market, followed by Juniper, which accrued 7.9 percent of sales.

The big mover on the list was Fortinet. It grew its revenues by 17.2 percent and claimed a 5.9 percent share of the market. McAfee rounded out the top five with a 5.7 percent piece of the market on $116m in revenues.

IDC noted that unified threat management (UTM) was a particularly attractive option to businesses looking to beef up security protections. The analyst house estimated that UTM devices accounted for roughly one third of all security appliance sales.

Though growth is slowing, analysts remain bullish on the long-term outlook for enterprise network security appliances.

"Overall, macroeconomic conditions have been questionable at best. While the security market remains more resilient than others, there was a definite slowdown in growth rates in the third quarter," said IDC security products research manager John Grady.

"That being said, the evolving threat landscape continues to drive spending on security products as organisations battle to keep their infrastructures secure and their data protected."

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Shaun Nichols

Shaun Nichols is the US correspondent for He has been with the company since 2006, originally joining as a news intern at the site's San Francisco offices.

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