Australian companies snapping up security appliances at twice the global rate

The market for cloud and managed security services may be hotting up, but Australian companies will continue investing in standalone security appliances at almost double the global average over the next five years, a new market assessment from market analyst IDC has forecasted.

Some $191 million worth of security appliances were sold to Australian customers in 2014, the firm found, with cumulative annual growth expected to average 15 percent per year to reach $390.5m by the end of 2019.

This was well ahead of global growth in the market, which IDC separately pegged at 8.3 percent for the whole of 2014. With 32.1 percent year-on-year growth, Asia-Pacific shipments overall surpassed even those within Australia.

This growth comes despite a slew of problems as one appliance after another has proved vulnerable to hackers. Researchers were warning years ago that users shouldn't assume that appliances are secure, with Barracuda Networks appliances found to contain backdoor accounts. More recently, Cisco released security patches for its Adaptive Security Appliance (ASA) firewall, which had been targeted by hackers.

Amazon has been working to build customer awareness of the value of implementing security appliances as standalone workloads on cloud-computing platforms, but the surging sales of standalone hardware suggest that any such adoption will not be at the expense of traditional hardware devices.

Cisco Systems was Australia's largest single supplier of security appliances, with $35m worth of sales, but that company recorded a 1 percent year-on-year dip in sales. Fifth-place Juniper Networks also saw sales decline, by 8 percent to $10m.

By contrast, second-place CheckPoint Software Technologies sold $22m worth of product last year in Australia – reflecting a 14 percent increase on 2013 figures.

Blue Coat was the third-largest appliance vendor ($19m), with 29 percent year-on-year growth, while Palo Alto Networks grew 37 percent over the previous year to sell $14 million worth of product in Australia last year.

Fortinet and Intel Security/McAfee, which both ranked in IDC's global top 5, did not make the Australian top 5. Blue Coat's security appliances, which accounted for just 4.3 percent of global appliance sales, were far more popular locally – accounting for 12 percent market share.

Other vendors accounted for $62m in sales, or 39 percent of the Australian market. However, their overall sales were down 3 percent from the previous year, suggesting that the market is consolidating around surging demand for products from Palo Alto Networks, Check Point and Blue Coat.

“Although most expect the security appliance market to shrink, Australia sees strong adoption,” software and security market analyst Lydie Virollet said in a statement. “Technology buyers are either complementing their existing installation, or purchasing a 'start off kit' to comply with legal security requirements.”

Virollet predicted the market would rapidly divide into two segments: vendors filling out their own security suites on the back of investments or in-house development, and those partnering to fill in gaps in their own security product matrix.

This article is brought to you by Enex TestLab, content directors for CSO Australia.

Copyright © 2015 IDG Communications, Inc.

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