The South African security appliances market declined 10.3% in value during the fourth quarter last year, totalling $12.25 million (R129 million). However, the market is set for steady growth at a five-year compound annual growth rate of 6.5%, to reach $66.85 million (R704 million) by 2018.
This is according to the IDC's Europe Middle East and Africa Quarterly Security Appliance Tracker, which notes $48.75 million (R514 million) was generated throughout the whole of 2013.
Consumer budget constraints and the depreciating rand are key factors in last year's fourth quarter decline, according to the IDC. However, Fortinet, Juniper, Cisco and CheckPoint maintained their leading market positions to represent 61% of the market's value share in the same quarter.
The research firm highlighted the following key findings throughout the quarter:
* Firewalls and unified threat management (UTM) appliances increased their contribution to the security appliances market in the fourth quarter, generating 15% and 59.6% of the total market value, respectively.
* Content management and intrusion detection and prevention (IDP) appliances amounted to 11.5% and 6.2%, respectively.
* A total 2 934 units of security appliances were shipped to SA during the fourth quarter last year. Annual shipments are expected to increase from 10 847 units in 2013 to 16 667 units in 2018 - representing a five-year compound annual growth rate of 9%.
* Demand for content management and IDP integrated into UTM and next-generation firewall appliances is set to increase due to what the IDC notes as current cost-reduction and unification trends.
* Demand for standalone versions of virtual private networks, IDP and content management is expected to concentrate on the medium to high-end range.
Market consolidation
Jiaqi Sun, research analyst at IDC, says: "The trend toward market consolidation continues, with UTM vendor Sophos acquiring close competitor Cyberoam in February 2014."
Sun says the acquisition will strengthen Sophos' capability to offer security solutions and expand its customer base in emerging markets, including SA.
"Cost-effective UTM appliances will continue to gain traction in the largely untapped small and medium-sized business segment, where most customers still rely on traditional firewalls embedded in their network routers."
Sun says threats to service availability, including distributed denial of services, will require specialised security solutions to complement firewalls and UTM appliances as organisations aim to protect Internet, data centre and end-user networks.
"The uptake of virtualised security solutions is increasing and these solutions form part of the server infrastructure or hosted remotely by data centre service providers.
"With the current slow-growing economic environment, virtualised security solutions could maximise the capacity utilisation of security appliances and enhance overall security system performance for end-users in the medium-term," he says.
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