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Dell Oro Group: Check Point, Fortinet, Palo Alto making gains in security appliances

Dell Oro Group: Check Point, Fortinet, Palo Alto making gains in security appliances

Cisco still rules, Juniper is in a funk

There’s a continuing shift among the top security appliance vendors that has Cisco remaining at the top of the sales heap but with Check Point Software, Fortinet and Palo Alto Networks making gains and pressuring Juniper Networks, according to new research from Dell’Oro Group.

The research - which includes new data from the second quarter of this year as well as projections for next year and historical data going back to 2012 - has Cisco, with 24.9% of the network security appliance market as measured by manufacturer’s revenue, solidly in first place during the latest quarter. It is followed by Check Point (9.3%), Fortinet (8%), Palo Alto (5.2%) and Juniper (4.8%) to round out the top five.

That’s a dramatic shift from the way things stood for calendar year 2012 when the top-five rankings were Cisco (23.5%), Juniper (8.7%), Check Point (6.5%) and a tie between Dell and Intel (each with 3.2%). Fortinet finished at No. 6 (2.9%) and Palo Alto finished at No. 8 (2.6%). Blue Coat snuck in between them with 2.7%.

The shift reflects a shift in customers adopting defenses that are less perimeter-, port-focused and more tuned to security based on types of devices, their locations and the applications they are accessing, says Casey Quillin, a Dell’Oro analyst who did the work.

Cisco managed to hang onto its lead, aided by its purchase of Sourcefire in 2013, he says, while Juniper has added features to come more into line but with less success, says Quillin. “They’ve made changes but they haven’t borne fruit yet,” he says.

Meanwhile the market as a whole has grown between 2012 and now, so some of the shift can be attributed to some companies grabbing more of the new money than others as well as grabbing customers from Juniper and other competitors, he says.

The shifting numbers are consistent with the ease with which the vendors have been able to deliver next-generation products, he says. Check Point, for example, has a modular architecture in which customers can buy software “blades” to add features to the basic platform, an arrangement that allows them to pay just for what they need, he says. Palo Alto, with its pioneering of next-generation firewalls, has earned not only more sales but what Quillin calls “almost a cult following” among its customers who are willing to pay “luxury prices”. Fortinet, with its insistence on ASICs as the hardware behind its technology, delivers the best performance per dollar, he says.

Other new Dell’Oro research shows a continuing growth in use of virtualized network security appliances in data centers vs. those based on physical hardware. In 2012, physical devices accounted for 97.4% of the market by revenue while virtual devices represented 2.6%, the research says.

At the time that represented a year-over-year growth of just 4% for physical machines but 40% for virtual machines. The disparity in growth rate has continued since then, with physical growing 4% last year and virtual growing 73%.

Now, in the latest quarter, the market shares are 93.1% physical and 6.9% virtual.

These results represent the effects of increased use of virtualization of data centers in general, popularity of software security modules and the capabilities of virtualized machines in policing traffic among virtual machines, he says.

The trend will continue. Dell’Oro projections for the second quarter of next year put revenues from physical security appliances in data centers at 89% and from virtual appliances at 11%.

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