Q2 Security Appliance Market Share

The CyberSecurity CDNs are definitely in the right market, and must have their eyes fixated on the much bigger security pie, dominated by the likes of Cisco, Palo Alto, FireEye and Fortinet. In 2015, Gartner estimates the global cyber security market will be at least $80B. At the other end, the CDN sector is lucky to hit $5B to $7B. That means the security sector is ten fold larger than the CDN sector. Is the handwriting on the wall? Are we going to witness the collapse of the security sector that pits Akamai, EdgeCast, CloudFlare and Incapsula against FireEye, Palo Alto, Cisco, Check Point and Fortinet. It’s possible.

The one advantage the CyberSecurity CDNs have over premise base security vendors, the cloud. By their very nature, CDNs are global cloud infrastructure companies that scale on demand within minutes. They are not limited to a server or appliance. A few of us in the CDN industry are waiting for a brave soul, like CloudFlare or Akamai to make a move into the Advance Threat Protection play, where behavioral based algorithm that detects and mitigates breaches in real time, replaces or compliments the current cyber security offering. Here are a few facts on the security sector:

Palo Alto Earnings for 2014

• Annual revenue is $600M, up 50% from last year
• Palo Alto Market Cap is $7.6B
• Q4 revenue grew 59% year-over-year to $178M
• Two Core Segments: Products and Service Subscription
• Product revenue grew 52% year-over-year
• Subscription revenue grew 74% year-over-year
• Customer base exceeds 16,000
• Litigation against Fortinet and Juniper cost $160M

Q2 Security Appliance Market Share Recap

• Cisco extended its global market share lead from 16.5% in Q2 2013 to 18.4% in Q2 2014
• Cisco security appliance revenue rose 19.7% to $414M (IDC)
• Total security appliance sales worldwide rose 7.4% to $2.25B
• Top 5 vendors account for 51% of sales
• Unified Threat Management segment increased 21.5% year-over-year and accounted for 43.6% of security appliance revenue (IDC)
• Firewall segment was 19.2% of security appliance revenue
• IDS / IPS fell 1.2% to 16%
• 500,000+ units shipped in Q2

Top 5 Security Appliance Market Share Leaders in Q2