VPN and Firewall Market Up in Q3

SAN JOSE, Calif. -- Worldwide VPN and firewall hardware and software revenue grew 9% to $780 million between 2Q03 and 3Q03, and will reach $955 million by 3Q04, according to Infonetics Research's quarterly worldwide market share and forecast service, VPN and Firewall Products. By 2006, annual revenue is projected to hit $4.5 billion, a CAGR of 17% since 2000.

"After a rough first and second quarter this year, pent-up enterprise demand fueled strong growth in the third quarter, which is typically down in this market," said Jeff Wilson, principal analyst at Infonetics Research. "Several vendors had strong quarters, but Cisco carried the market on its shoulders with a phenomenal third quarter. Cisco is looking to become a dominant force in network security."

One important trend impacting this market is a serious blurring of the distinction between IDS/IPS, application security, and firewalls. Ultimately, network intrusion prevention and application security appliances and VPN/firewall appliances will merge into a single device, and this feature consolidation will keep the appliance market growing through 2006.

3Q03 Market Highlights

The VPN and Firewall Products report tracks VPN and firewall appliances in six price-banded categories, hardware and software secure routers, application-layer VPN gateways, and VPN and firewall software (standalone and appliance). Forecasts are updated quarterly and cover all regions (worldwide, North America, EMEA, Asia Pacific, and CALA).

Infonetics Research Inc.