November 2013

There’s Big Money to be made in Network Security

There’s Big Money to be made in Network Security

By Jenn Cano

Have you ever been the victim of a network security breach?  Has your identity ever been stolen, or have hackers compromised your entity’s valuable data?  Just this week I got an email from Google telling me that someone tried to sign in to my daughter’s Gmail account.  Does this look familiar…

email

Nearly every day the news informs us of a new security breach that’s taken place.  Nothing is exempt; not credit cards, Facebook accounts, bank accounts, email accounts, phone records nor anything else that may store your electronic data.   The expansive knowledge of cyber thieves continues to expand finding ever-increasing ways to bore through even the most complex of firewalls and security systems.  Originally designed for government security, network security has become one of the leading business areas in the IT industry as a result of the constant threats that bombard the business world.

Business network security originated from well-meaning intentions designed to protect companies and their customers from security breaches.  The issue in today’s security environment is the bad guys are quite capable and fully willing to shift their strategies as often as they need to.  Literally, this is their full-time job, thus creating a thriving industry that doesn’t show any signs of slowing any time soon.

It was recently reported that the overall security appliance market grew to $2.13 billion in the second quarter this year, or 6.1% year-over-year growth.  By 2017, the market is expected to grow to $10.17 billion, or almost 500%!  There has been a recent increase in the prevalence of virtual and SaaS-based network security solutions, but despite the increase, appliances remain the dominant delivery method.  The question is which companies are going to capitalize on this every increasing industry?

Cisco, unsurprisingly, leads the network security appliance industry, much like most of the other portions of the IT network industry.  Cisco raked in 16.2% of the $2 billion generated for the second quarter this year, but that was down from 17.2% last year in the same quarter.  None the less, Cisco is intent on expanding its product offerings for continued growth.

Not too far off in the race for first is Check Point Software Technologies holding on to the number two spot. With a 12.5% share in the industry, and their revenue increasing 4% from a year ago they are giving Cisco a run for their money.  Check Point’s products include network security, Virtualization Security, Data Security, Data Security, Endpoint Security, Mobile Security, and Security Management.

Third place goes to Fortinet Inc who is a little ways off with a 6.2% share in the market.  But don’t let the gap in shares fool you, Frotinet is by far the fastest growing among the top five vendors, with a 17.2 percent revenue gain from Q3 2011.  Since 2010 Fortinet has been working close with NEC and is making huge strides in the cloud platform market.  Their FortiGate network security platform is the first third-party next-generation firewall to be certified by NEC to protect their cloud platform.  FortiGate was deployed as the security resource in NEC’s SDN environment making huge strides in the market.

Juniper Networks is also up and coming in the network security market.  They claimed fourth place with a 5.5% share of the market.    Juniper is rapidly switching a portion of their focus from networking to the security market and clearly the plan seems to be working for them.  Their latest acquisition to date is security specialist firm Mykonos Software, which was purchased in February 2012.

Palo Alto Networks and Hewlett-Packard round out the cream of the crop in network security coming in fifth and sixth respectively.  Palo Alto Networks had year-over-year revenue gains of 55% as in races for the top with a string of strong new product offerings.  HP, and oldie but goodie breaks its way in to the market with hopes of creating a new revenue avenue.

As the problem of network security continues to grow vendors will actively look for ways to climb to the top. In order to advance they will have to look for competitor mistakes, and take advantage of them.  For the underdogs, it will become necessary to exploit dis-satisfaction with the pricing, efficacy, performance, and feature breadth of the products from the top 3 vendors.  Taking advantage of these slip-ups will continue to make the fight for the top interesting for Cisco, Check Point, and Juniper in 2013.

 

Share